Douglas B. Gordon, New Zealand Minerals Industry Association nzmia@xtra.co.nz

Richard G. Barker, Consulting Geologist
rbarker@ihug.co.nz

Anthony B. Christie, Institute of Geological & Nuclear Sciences t.christie@gns.cri.nz

Abstract

The New Zealand Minerals Industry Association is co-ordinating the production of a Minerals Industry National Strategy which aims to increase the economic contribution of the minerals industry from $1 billion at present to $2 billion by 2010.

The Association has also led a group that has prepared a research and development strategy that seeks to increase the level of funding for minerals and mining related research and development from less than $3 million per year to more than $20 million per year.

Introduction

New Zealand's growth and wealth have stagnated relative to those of its international peers. In a special report the Paris based Organisation for Economic Co-operation and Development (OECD) said 'New Zealand's economy has lacked solid growth in recent years and ought to focus on getting the best possible fundamentals in place to improve its prospects ...' The OECD suggested policies to further enhance competition, fresh attempts to cut the cost of business regulation and advised the Government to resist restrictions on foreign investment.

Mining has made a major contribution to the economic health of New Zealand since the discovery of gold and coal in the mid 19th century. By 1863 gold accounted for more than 70% of the value of New Zealand's exports and it continued to exceed 10% until well into the 20th century. The surge in exploration investment during the 1980s has led to an increase in the value of mineral output from about $500 million in 1986 to about $1 billion today. Gold and coal now together account for nearly 2% of total export values, and each represents about a quarter of the value of total mine output. Its contribution to GDP is nearly 4% larger than that of the fishing industry, but it has the potential to make a much greater contribution.

However, lack of public appreciation of the essential contribution minerals make to the economy, and its anachronistic perception of miners as environmental rapists and pillagers, has led to Government policy severely curtailing access to mineral bearing lands. International investment in prospecting and exploration has consequently dried up leaving potentials unrealised and an industry facing decline.

Between 1992 and 1997 investment in minerals exploration worldwide increased strongly, but the level of activity in New Zealand declined over the last three years. The investment environment in New Zealand is no longer competitive. While the value of mine output has grown strongly over the last five years, it is expected to decline unless investment by the private sector returns to levels of the 1980s, resulting in new discoveries and new developments.

The industry is unified in a strategy to address the critical issues it faces, and to enable New Zealand to realise the benefits from its mineral potential in jobs, revenue, exports, import substitution, and new and continued production and development, whilst minimising effects on the environment.

To promote this the New Zealand Minerals Industry Association is involved in two initiatives:

• Developing a National Minerals Industry Strategy to make more effective use of our mineral resources.
• Co-ordinating the industry's contribution to the Foresight Project of the Ministry of Research, Science and Technology which will determine the priorities for the Government's research and development investment.

NZMIA Minerals Strategy……

The minerals strategy has the goal of doubling the economic contribution being made by the mineral industry by 2010. To determine whether this target is realistic the NZMIA requested the Institute of Geological & Nuclear Sciences to provide information on New Zealand's known and potential resources. The result is a preliminary assessment of New Zealand's mineral potential (Christie and Brathwaite, 1998) which is an inventory of New Zealand's mineral resources compiled by assembling existing information on individual mineral resources and by making estimates of undiscovered mineral resources. A unit regional value comparison of New Zealand's mineral production with several other countries and states indicates that New Zealand has considerable undeveloped mineral potential, with total past production lagging behind other areas, particularly in metals and non-metals apart from limestone.

New Zealand has large resources, although not well quantified, of most non-metallic minerals and rocks, adequate for production for domestic markets in the foreseeable future. Large resources of coal, ironsand and ilmenite coastal sands have been determined previously by extensive exploration programmes and could support increased and new production for export. Resources of metallic minerals have been classified according to international mineral deposit models and these indicate that New Zealand contains a wide variety of mineral deposit types and metals. Undiscovered resources were estimated by a counting method of mineral resource assessment and by use of mineral deposit models to quantify the resources. In addition to current production of gold, silver, iron, and vanadium, there is immediate potential for production of titanium/titania.

In the longer term, there is potential for exploration and the discovery of deposits for most metals, although the best potential in the next few years is for gold, silver and platinum group metals, and to a lesser extent copper, zinc and lead. Antimony and tungsten could be produced as by-products from gold mining. The value of known and estimated resources of metals total more than $57 billion.

The study suggest a scenario whereby New Zealand's value of mineral production could increase from the current NZ$1 billion to more than NZ$2 billion annually in 2010 by:

1. an increase in production of most non-metallic minerals, aggregate and titomagnetite ironsands to past maximum annual levels
2. development of new high value products and markets for bentonite (specialty markets), perlite (filtration), processed silica (pozzolan and ferrosilicon), sulphur (fertiliser), and zeolite (catalyst, ion exchanger, waste adsorption, stock feed etc)
3. the development of proposed ilmenite mining projects on the West Coast and the separation of a titanium mineral concentrate from titomagnetite ironsands at the currently operating mines in the North Island
4. an increase in total coal exports with new developments on the West Coast (e.g. Mt Davy and Pike River)
5. exports of groundwater for overseas bottled water and mineral water markets
6. expansion of gold and silver production and the discovery and development of two new deposits and development of known resources in Reefton
7. the discovery and development of a platinum deposit.

The industry strategy is being prepared by analysing the reasons for New Zealand's mineral potential not being realised. These include a lack of industry co-ordination, negative public perceptions, central Government indifference to the industry, and the preservationist public land management policies.

The realisation of our mineral potential will require changes in public perceptions, Government policies and administration, and the industry itself.

The Foresight Project……

The Government funds research, science and technology through the Public Good Science Fund which this year will total about $290 million. At present funding is categorised along industry sector lines (e.g. dairy, tourism, energy etc) and over the last four years more than $65 million has been spent on 'earth resources and processes' which includes geology, palaeontology, physical hazards and resources. Most of the funds under this category have been directed to the Institute of Geological & Nuclear Sciences. At present less than $3 million per year is directed towards mineral deposit research.

This system of funding is to change, and continued financial support of geological research related to resources should not be taken for granted. The Government intends to change its focus from funding research to investing in the future of the country. Future investment will be based on 'Foresight Strategies' that have been filed with the Ministry and include a case for public investment in research. Details of the project and summaries of the strategies are available on the Ministry's site www.morst.govt.nz/foresight. The minerals industry strategy is on this site. About 50 groups have prepared strategies.

A strategy for minerals and mining has been prepared by a group with representatives from across the mining spectrum including aggregates, coal, industrial minerals, metallic minerals, groundwater, education and technology, and export. Doug Gordon is the chairman of this group and Richard Barker has co-ordinated the production of the strategy for minerals and mining under a contract with the Ministry of Research, Science and Technology. The Institute of Geological & Nuclear Sciences is strongly supporting the project along with the NZMIA and a number of companies.

Since 40 industry members came together in the first workshop in May 1998 this continues to be a united industry-wide effort in which members of all sectors, regardless of their affiliations, have given tirelessly of their time because they believe that New Zealand has a national interest in its minerals. Each group has different strategic imperatives, but together can provide the foundation of New Zealand's economic and social development.

With a sea change in public perception and appreciation of the industry's contribution to the economy, reflected in new policies and political leadership, New Zealand's mineral potential may be unlocked - with acceptable environmental effect - to benefit all New Zealanders.

The potential benefits of this include:

• An increase in GDP equivalent to more than the entire New Zealand fishing industry.
  
• An increase of at least 12,000 people employed in New Zealand.
  
• Strategic advantages including reduced dependence on imports and benefits for other productive sectors.
  
• Benefits in research, education, the export of technology, and further long-term expansion of New Zealand's economic mineral resources.

References
Evening Post: OECD Advises New Zealand to Focus on Fundamentals, April 24 1998, p12.
Christie, A.B., Brathwaite, R.L., Institute of Geological & Nuclear Sciences, The Mineral Potential of New Zealand Science Report (in press)

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