The Minerals Industry is proud to present to you its National Strategy and its Foresight Strategy covering Government Investment and Research and Development.

This strategy has the potential to generate another $1 billion in the national economy and double the current 12,000 jobs in the industry without accessing the Department of Conservation land categories closed to mining by the Crown Minerals Act Amendment No2 1997

The full texts are available below.

Shorter versions can be accessed by clicking one of the following:

Increasing New Zealand's Mineral Production

Minerals Industry Data Sheet

New Zealand Minerals Industry 2010:
A Strategy to Help Rehabilitate the New Zealand Economy, Gordon, Barker, & Christie.
A paper presented to the Australasian Institute of Metallurgy & Mining Annual Conference, November 1998.

FORESIGHT PROJECT……

MINERALS AND MINING SECTOR STRATEGY VISION for 2010

The minerals industry is recognised as the foundation of New Zealand's economic and social development

Te Papa (Museum of NZ) Wellington

The museum building contains;

• 80,000 cubic metres of concrete made from local aggregate supplies
• 2,000 kilometres of reinforcing steel
• 14,500 stone panels, mainly of South Island dolomite, which clad much of its exterior.

 

Minerals are necessary for providing almost everything we take for granted in our daily lives including food, shelter, and supplies of energy and water. Minerals are therefore essential for the maintenance and improvement of the standard of living of all New Zealanders.

The minerals industry of New Zealand is diverse and complex. It consists of the explorers and producers of 5 main categories of minerals:

 

• aggregates - essential for road and highway construction, concrete for structures such as bridges, and for making building products such as pipes and masonry
• metals - gold and silver for export, ironsand for steel making in New Zealand and for export
• non-metals - industrial minerals used by virtually all other industry sectors, particularly agriculture (eg lime and fertilisers) and building (eg limestone for making cement)
• coal - a critical energy source for export and domestic industries, for steel and cement making in New Zealand, and for export
• water - groundwater which provides 40% of New Zealand's water supplies.

The value of New Zealand's mineral and coal production (excluding petroleum and water) is more than $1 billion per year. In addition, the export of mineral technology developed in New Zealand has a value of more than $20 million per year.

 

This research and development strategy has been produced by a team consisting of representatives of these sectors of the minerals industry, following an initial strategy setting workshop with wider industry participation. The strategy team followed the Foresight "sector strategy template". This maps a four stage process of strategic thinking which describes:

1. The significance of the sector in 2010

2. The outcomes that contributed to achieving this

3. The competencies that were required to realise the outcomes

4. The investment needed to achieve the outcomes

This strategy document is formatted in four sections to follow the template. The appendix lists the members of the strategy team.

 

If there were no minerals men would pass a horrible and wretched existence. They would dig caves in which to lie down at night.. Is anyone so foolish as not to allow that metals are necessary for food and clothing and that they tend to preserve life?

Agricola "De Re Metallica" 1556.

PART ONE - THE MINERALS INDUSTRY: 2010……

1.1 Significance

 In 2010 the minerals industry is producing minerals with a value of $2 billion annually and its contribution to Gross Domestic Product has doubled over the previous 10 years. The numbers employed by the industry directly and through economic flow-on effects total more than 25,000. This increase has resulted from growth in all sectors of the industry:

 Aggregates ( for the infrastructure to serve the expanding population and industrial development;

 Metals ( from the discovery of new deposits as New Zealand's mineral potential is realised. Following successful research, titanium and vanadium are being produced from known ironsand resources;

 Non-metals ( with increasing demand from an expanding population and growth in manufacturing. Growth in exports of specialised industrial minerals has followed successful processing and market research;

 Coal ( to meet increasing energy demand, with increasing exports of coal and high value carbon based products developed from research on New Zealand coal;

 Water ( with increased domestic and industrial use of groundwater and the development of a major water export industry supplying the Middle East and Asia.

Maintaining the living standards of each New Zealander will continue to require at least 6 tonnes of aggregate and 2 tonnes of other minerals to be produced in New Zealand every year.

For example, each kilometre of six lane motorway requires at least 25,000 tonnes of aggregates.

Source: Institute of Geological and Nuclear Sciences

1.1.1 Growth and development

An efficient and productive minerals industry is necessary for economic growth and development with rising living standards for New Zealanders. Population growth, internal migration and industrial development require new infrastructure which increases the demand for mined and quarried products.

The importance of minerals is underlined by their consumption being used as a key indicator of economic growth. For example, Statistics New Zealand uses concrete production for this purpose and concrete is composed entirely of minerals from this sector. With continued urbanisation and associated development in New Zealand, the needs of the domestic market will have increased.

1.1.2 The nature of minerals

New Zealand hosts more than 600 known mineral deposits of 25 different types within an area of 270,000 km2. Known coal resources exceed 8,000 million tonnes.

Mineral exploration and development differs from other land uses because mineral deposits -

• are hidden and many are difficult to find
• are not evenly distributed and must be worked where they occur
• are both Crown and privately owned

The production of minerals directly affects a very small area (less than 0.01% of the land area of New Zealand).

1.1.3 Land utilisation

Land utilisation by the minerals industry continues to be extremely productive, the proportion of New Zealand's land area being worked having increased only slightly from the 0.01% of 1988. Minerals development is providing the highest economic return for both local and national economies, and the greatest human benefit per unit of land disturbed compared with other land uses. Mineral production is a short term land use and it continues to be standard practice for land to be progressively rehabilitated, allowing its ongoing use for other purposes.

1.1.4 Exports

Minerals and coal exports have increased from $400 million in 1997 to more than $1,000 million annually and are contributing to many other export industries. Technology export, which has major growth potential, is adding at least $20 million more. Groundwater supplies underpin agriculture, horticulture and food processing industries while becoming a major export earner.

New Zealand produces unique low ash, low sulphur coal which has the potential to be used for the production of high value, high technology carbon-based materials for consumers and industry.

1.2. Industry position

The unique and competitive position of the NZ minerals industry is due to the following characteristics:

 

• New Zealand's unique geological history - for example young volcanic and geothermal activity has produced a range of mineral deposits, and has led to the development of expertise and technology that is being exported, particularly to Asia and the Pacific
• State of the art production processes that are environmentally benign by international standards
• Accessibility and infrastructure - the country is highly accessible by international standards, with good transport systems and location to existing community infrastructures, including a skilled workforce
• The New Zealand minerals industry provides leadership in environmental performance and site rehabilitation.

 

New Zealand has a unique opportunity to increase the area over which it has sovereignty through a claim under the UN Convention on the Law of the Sea (UNCLOS) to extend our exclusive economic zone. Present day volcanic activity is depositing copper, lead, zinc and gold on the sea bed in comparatively shallow water.

Offshore metallic mineral deposits discovered by Australian Government funded sea-floor research off the coast of Papua New Guinea are now attracting private sector exploration investment for the first time. An Australian company has been granted a prospecting licence to investigate their potential for commercial mineral production.

The investigation of these resources by the minerals sector, in co-operation with other sectors, is essential if New Zealand is to sustain a successful claim. At present little is known of New Zealand's offshore mineral resources. Our claim under UNCLOS must be finalised by 2006.

1.3. Key stakeholders

Stakeholders in the minerals industry include the companies that explore for and produce minerals and their employees and suppliers; central, regional and local government agencies, private landowners, Maori, research and educational organisations and the industry's customers who include the population of New Zealand.

Key stakeholders of the minerals industry are :

1.3.1 Consumers - every New Zealander and the industry's offshore customers.

1998 Focus

• Consistent quality
• Reliable supply at an affordable price
• Care for the environment

2010 Additional Focus

New Zealand has internationally recognised potential for hosting platinum group metal deposits. These metals are a vital component of the catalytic converters used to control vehicle exhaust emissions.

• Responsiveness to demand for new minerals and changing uses
• Discovery of new mineral deposits and the development of new products for global markets
• More efficient exploration and development processes
• Precise and deliberate environmental management
• Targetted communications.

1.3.2 The NZ Government - through the Ministry of Commerce, Crown Minerals Division. Most minerals are the common property of all New Zealanders and their ownership is currently vested with the Crown.

1998 Focus

• Granting minerals permits for prospecting, exploration and mining of Crown owned minerals and monitoring these activities
• Formulating minerals regulations
• Collecting royalties
• Maintaining permit and information databases

2010 Additional Focus

• Consulting and advocating for minerals development on issues of strategic importance
• Promoting investment in NZ minerals
• Research & development investment
• Advising Ministers of Government (with industry representatives)
• Maintaining a fair and efficient regime for access to minerals.

1.3.3 Private mineral owners

 Privately owned aggregate and industrial mineral deposits contribute about half of New Zealand's minerals presently in use.

1998 Focus

• Reacting to changing social and political climate
• Environmental compliance
• Defending existence

2010 Focus

• Leading environmental policy formulation and implementation
• Recognised as a core contributor to community wellbeing
• Process efficiency, recycling, product development and import substitution
• Innovation and creativity.

PART TWO - ACHIEVEMENT OF THE VISION……

Outcomes

"New Zealand has the most environmentally responsible mining industry in the world".

David Bellamy, 1991.

Two major outcomes enabled the achievement of the industry vision by 2010.

 

2.1 The minerals industry gained the support and recognition of key stakeholders and the wider community:

 Consumers (both domestic and offshore markets) choose NZ minerals products for the consistent quality of brand and the industry's commercial and environmental performance;

New Zealanders have an increased awareness, through interactive educational programmes and effective communications, of the place of minerals in their lives and how minerals sustain and improve living standards;

Regulators formulate and administer consistent policies and regulations that reflect an informed view of the industry, and recognise that minerals development and environmental protection do co-exist successfully;

Investors are carrying out effective and efficient exploration based on certainty of access and secure mineral property rights, supported by an up to date minerals inventory and ongoing research;

Mineral owners (including the Crown) understand the value and potential of their resources and facilitate access and extraction.

 In 1997 more than 80% of mining employment was created outside the main centres of Auckland, Wellington and Christchurch. For manufacturing the equivalent figure was 40%.

2.2 The minerals industry maximised its contribution to the sustainable development of the nation through a sustained focus on improving:

 Economic Environment - the contribution being made by minerals (both for domestic use and export) increased from $1 billion in 1998 to $2 billion in 2010;

Social Values - an increase in regional employment through minerals development with the industry meeting community expectations of environmental care and corporate social responsibility;

Consumer Recognition - greater awareness of consumer requirements based on comprehensive and deliberate consumer identification;

Environmental Performance - the industry continues to lead the world in responsible environmental performance during exploration, site planning, production and restoration of sites to achieve sustainable end use options;

Resource Definition - access to up to date information about the nature, volume and location of New Zealand's mineral resources;

After fine processing, limestone and marble are used in the manufacture of paper where they contribute to colour and printability. Gloss paper can contain up to 40% of these minerals.

Resource Availability - an established framework for access to minerals that compares favourably with regimes internationally, and public land management decisions based on a rational assessment of the relative significance of surface and sub-surface values;

Resource Development - coherent and consistent operational policies for the development of mineral resources, and continued improvements in environmentally benign resource development techniques;

Product Refinement - identification and achievement of value addition processes for mineral products to meet consumer requirements;

Product Definition - the value added captured within NZ through branding, appellation and consumer service.;

Industry Effort - development of industry knowledge, skills and technology while attracting human and financial capital.

PART THREE - THE COMPETENCIES REQUIRED……

"Many persons hold the opinion that the metal industries are fortuitous and that the occupation is one of sordid toil requiring not so much skill, as labour. But as for myself, when I reflect carefully on its special points one by one, it appears to be far otherwise" Agricola, 1556.

Desired outcomes are realised by 2010 through the acquisition of new competencies by operators within the industry, by research and educational institutions and by governing agencies.

3.1 Additional competencies

3.1.1 Additional competencies required (to achieve support and recognition of the need and benefit of New Zealand's mineral resources) include:

•  The skills, knowledge and technology to translate technical information into language that has value and meaning to the public, and delivers this to them
• Networking and communications skills to build effective relationships with stakeholders and gain their support for access by the sector to New Zealand's mineral resources
• The capabilities to provide for end user needs through consumer and market research
• Knowledge of the value chain for each product.

 

3.1.2 Additional competencies required (enabling maximisation of the industry's contribution to the sustainable development of the nation) include:

•  The skills, knowledge and technology to recognise New Zealand's mineral potential (including groundwater) and to locate and delineate New Zealand's mineral resources
• State-of-the-art technology in mineral exploration, mining, mineral processing and environmental management, relevant to New Zealand's unique mineral resources

In 1998 the mining sector in New Zealand pays the highest average minimum weekly wage rate ($520) of the 17 sectors monitored by the Dept of Labour. The communications services sector is paying the lowest average rate ($333).

• A mechanism to assess and compare the surface and sub-surface values of land
• An organisational arrangement to gather, interpret and transfer technical knowledge and an assessment of value into regulatory policy development.
• Market analysis and knowledge of consumer trends and community expectations
• Branding and appellation skills at all levels within the industry
• Innovation skills to allow alternative uses of minerals to be defined and the required technology to be developed
• The export of skills and technology.

3.2 How competencies are acquired

New knowledge and technologies are acquired through the following processes:

 As an example, in 1889 New Zealand was the first country in the world to use a newly developed chemical gold-silver extraction process commercially. To facilitate innovation, the NZ Government bought the patent rights for the process at a cost of £10,000 and by 1905 had recouped the cost through royalties paid by users of the process in New Zealand.

• Increasing the knowledge of New Zealand's onshore and offshore mineral resources through expanded exploration and research programmes
• Maintaining a database of up to date information on location of mineral and groundwater resources and production statistics
• The sector enhancing its ability to interpret and respond to changing workforce needs
• The retention of qualified people in New Zealand through expanded opportunities for career advancement
• Committed industry and government support of tertiary education, student research and scholarships
• Developing baseline mineral technology and engineering capabilities in New Zealand universities
• Recruitment overseas, particularly of skilled expatriate New Zealanders.

PART FOUR - THE RESEARCH AND DEVELOPMENT INVESTMENT CONTRIBUTION……

To achieve the vision, a very substantial increase in investment will be required by both the industry and the Government.

The contribution of mining (excluding petroleum) to New Zealand's Gross Domestic Product is 25% larger than that of the fishing industry. This contribution is planned to double by 2010.

4.1 Industry Investment

By 2010 industry investment in research and development (including exploration) will have increased from an estimated $15 million in 1997 to $60 million annually.

 The industry will have been producing high quality data on its exploration activities, adding value to an accessible central database on New Zealand's mineral resources, and communicating effectively with its stakeholders.

 Investment in training by the industry will be ensuring the availability of skilled staff, while investment in environmental research and rehabilitation will ensure New Zealand maintains its position as a world leader in this field.

 Continuing investment in processing and extraction technology will be necessary to achieve anticipated growth in output.

4.2 Government Investment

The "Ministry of Mineral Resources" (established by 2001) will be required to produce detailed, accurate information on exploration investment, exploration activity, mineral production and updated summaries of data. This information will be available to industry operators and potential investors.

 Research and development investment converted the clay deposits of Matauri Bay in Northland from mere curiosities into productive resources that have contributed at least $200 million to New Zealand's exports since the mid 1970s.

Workable policies for land access and environmental management will be consistent throughout New Zealand and have the support of local communities.

Central government funded research and development will be needed to support the New Zealand minerals industry's renewed impetus by:

 

• conducting research, with the advantage of modern knowledge and technology, into New Zealand's geology, geomorphology, hydrogeology and mineral deposits, both onshore and offshore
• developing and maintaining a database of New Zealand's mineral resources and potential deposits, providing a rational basis for public policy and decision making
• funding education and student research.

By 2010, government investment will need to have increased 10-fold - from less that $3 million per year in 1998 to up to $26 million per year, allowing continuation of current projects and funding of new initiatives as follows:

4.3 Continuation of current projects

• Geological mapping to complete a digital geological database of New Zealand
• Geological and geophysical surveys
• Hydrogeological mapping and surveys of groundwater resources

New Zealand has achieved world leadership in minerals research including the understanding of active geothermal systems and the nature and origin of epithermal gold-silver-basemetal ore deposits.

• Studies of the genesis and characteristics of individual mineral deposits
• Studies of offshore geology and mineral deposits
• Environmental studies, including the management of water and soil quality and tailings retention.

4.4 New Initiatives

• Establishing a national research programme to analyse social attitudes and investigate barriers to resource development; develop interactive communication programmes and research their effectiveness.
• Aeromagnetic, radiometric and gravity surveys of the whole of New Zealand will be completed by 2006 and a national geochemical survey will be completed by 2010 forming the basis of renewed investment in exploration by the private sector.
• By 2003 a nationally significant resource database will be established and freely accessible.
• By 2005 regional resource modelling and assessments of economic potential of known prospective regions will be completed, including an evaluation of surface and subsurface resources.

Since 1994 the State Government in Victoria, Australia has spent $18.5 million on geophysical investigations and database development for minerals and petroleum. This has led to more than $100 million in new private sector investment in minerals since 1994, with significant new mineral discoveries being made.

• Offshore, inshore and coastal resources will be investigated in detail between 1999 and 2005, followed by a successful UNCLOS claim in 2006. New Zealand's expanded Exclusive Economic Zone gives it one of the largest offshore territories in the world.
• Investigations into mineral extraction, processing and rehabilitation technology will be expanded.
• Increased university research relevant to the minerals industry - funding will be increased and scholarships established which provide dollar-for-dollar student support, matched by an industry sponsor.
• Technology transfer will be an important component of all research programmes to maximise the take-up of results and ensure the benefit and value of the research is understood by all stakeholders including the public.

Note: 20 full time scientists would need to be employed in New Zealand research institutions devoted to research into New Zealand's mineral resources.

4.5 Roles of investors

The roles of the respective investors are summarised as follows:

In 1997/98 the Government invested less than $3 million in mining and minerals research and development, while the private sector invested more than 5 times as much in exploration, mineral processing and environ-mental research in New Zealand.

4.5.1 Companies

• Developing community partnerships
• Statutory compliance
• Exploration and information reporting
• Safety and environmental management systems
• Promoting company-good research and development
• Site-specific environmental research and rehabilitation
• Staff training and recruitment

4.5.2 Industry Associations

• Community leadership and co-operation with stakeholders within sector
• Co-ordination of industry communications programme
• Promoting investment and international best practice
• Promoting industry-good research and development
• Developing and implementing codes of practice in co-operation with other stakeholders
• Developing and implementing codes of social responsibility

4.5.3 Regional and Local Government

• Providing consistent regional and local policies and plans
• Making rational land use and groundwater allocation decisions
• Acknowledging the value of mineral resources to regional and local economies
• Consulting with industry.

The research and development tax concession in Australia allows companies to deduct up to 125% of their R & D expenditure from their taxable income. The objective of the concession is to encourage innovation and increase the international competitiveness of Australian industry.

4.5.4 Central Government

• Internationally competitive regime for private sector investment in minerals
• Coherent national policies
• Advocacy and consultation with industry
• Accurate up-to-date exploration investment and production information
• Maintaining and promoting the public database on Crown owned minerals
• Establishing and maintaining a secure mineral property rights regime
• Developing and maintaining guidelines for all categories of environmental effect
• Investing in research and development that is essential for achieving the vision:

The minerals industry is recognised as the foundation of New Zealand's economic and social development.

APPENDIX: STRATEGY TEAM……

Chairman
Douglas Gordon
NZ Minerals Industry Association

Coal
Reuben Mills
Solid Energy NZ Ltd

Trevor Matheson
CRL

Mike Pohio
Glencoal Energy Ltd

Industrial Minerals
Dave Martin
Omya New Zealand Ltd

Jim Vellenoweth
McDonald's Lime Ltd

Aggregates
George Cunningham
Portchester Agencies

Richard Compton
Winstone Aggregates Ltd

Metallic Minerals
Peter Atkinson
Heritage Gold NZ Ltd

Tony Christie, Cornel de Ronde, Andrew West
Institute of Geological & Nuclear Sciences

Groundwater
Len Brown
Institute of Geological & Nuclear Sciences

Ian Jenkins
Woodward-Clyde (NZ) Ltd

Technology Export
Jim Lawless, Phil White
Kingston Morrison

Education
Jeff Mauk
Dept of Geology, University of Auckland

Consultant
Richard Barker
Consulting Geologist

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