Government scouts for foreign investors in minerals sector


Resources Minister Shane Jones stresses the link between minerals and clean energy (INL Photo by Narendra Bedekar)

Venu Menon
Wellington, July 8,2024

Resources Minister Shane Jones’ ongoing visit to Australia is part of the coalition government’s push to promote the mining and minerals sector towards achieving its regional development goals.

The trip follows the government’s move to extend the ban on mining activity in  the Kermadec Arc, a mineral-rich volcanic region stretching between the North Island of New Zealand and Tonga.

The grounds for continuing with the ban, introduced by the Labour government in 2018, are apparently logistical, involving stocktaking and drawing up a critical minerals list.

The Australia visit is aimed at building international investor confidence.

At the core of the coalition government’s bid to unlock natural resource opportunities is the draft Minerals Strategy for New Zealand and a forthcoming Amendment Bill to the Crown Minerals Act 1991.

The thrust of the strategy is to make New Zealanders cognisant of the minerals they rely on in their everyday lives, such as “aggregate to construct our roads, phosphate to support the growth of our crops or iron-sand to make steel for our buildings.”

Without these, the economy would grind to a halt, Minister Jones warns.

But he is careful to make the connection with clean energy.

“Minerals are also essential inputs for the technology we need for the transition to clean energy. There are no wind turbines without rare earth elements or electric vehicles without lithium for batteries.”

The ban on minerals prospecting, exploration and mining in the Kermadec Arc, which was due to expire on 4 July 2024, has been extended by 18 months until 4 January 2026, when the Minister of Resources can make a statutory decision under the Crown Minerals Act 1991 to either “re-establish the reservation [over the Kermadec Arc] or allow it to lapse,” as per a statement released last week.

Work is underway to complete a “critical minerals list” to identify minerals within the Kermadec Arc and in New Zealand’s territorial waters and Exclusive Economic Zone.

Mining minerals in the Kermadec Arc aligns with the goals contained in the government’s draft Minerals Strategy for New Zealand to 2040, a policy document launched by Jones in May.

The Kermadec Arc (Photo -NOAA)

Minerals exports are tipped to reach $2 billion by 2035, “bringing additional jobs, wealth, and other benefits to New Zealand and to regional communities.”

The government claims “domestic production supports New Zealand’s decarbonisation targets.”

The strategy notes “around half of mining activity involves production of Crown-owned minerals where royalties are generated.”

The revenue contributes to “funding our roads, healthcare, and education.”

The strategy makes a strong pitch for scaling up minerals exports and “realising new mineral opportunities.”

“Our existing exports are mainly gold and coal for steelmaking. These will remain relevant and the backbone of our sector, but we also have the opportunity to unlock potential from our wide and varied mineral endowment.”

The strategy intends to double the value of New Zealand’s mineral exports over the next decade, a goal which aligns with the government’s broader target to double the value of exports in ten years.

But there are barriers within the regulatory system, according to Jones. Mining projects take too long to deliver. While conservation lands need to be protected, the mining potential of some conservation areas need to be tapped. Attracting and retaining international investment in the mineral sector is vital.

Production needs to be scaled up for existing minerals with export value, such as gold and coal, the strategy lays out.

The Ministry of Business, Innovation and Employment will work in tandem with the Ministry for the Environment, the Department for Conservation, WorkSafe, New Zealand Trade and Enterprise and the   Ministry of Foreign Affairs and Trade to implement the strategy.

Iwi and hapu are acknowledged as key stakeholders in natural resource management, “given the long-standing cultural, historical, spiritual, and traditional association to specific minerals.”

The Deed of Treaty Settlements ensures iwi and hapu rights are protected, including the right to be consulted with on the issuing of mining permits and the management of minerals.

But the effects of mining on local and regional communities is a fraught issue, with protesters and opposition parties already up in arms against the government over its resource management policy.

Venu Menon is an Indian Newslink reporter based in Wellington

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