The head of New Zealand’s mining lobby Straterra, Chris Baker, said that the industry may now be the elephant in the room for the regional development of New Zealand.
In a comment piece in the Dominion Post Baker said the minerals sector recognises the subject inspires powerful feelings. Not just those opposed to current or future projects, but also in the many NZ communities where mining provides employment and economic benefit.
Straterra is commissioning further independent research into the current and potential future regional economic value of mining.
He said most recent figures indicate it supports 8,000 jobs nationwide. And 40% of the West Coast regional GDP was earned directly and indirectly from mining.
The average income from mining in New Zealand is $102,100 a year – more than twice the national average.
“Contrary to popular belief, most revenue from mining in New Zealand doesn't go to the overseas investors who fund exploration and infrastructure. For example, a report for OceanaGold found, in 2016, that 88% of OGC's expenditure on its domestic operations reached people and businesses in NZ through wages and procurement,” Baker said.
“So, when discussing the Government's commitment to regional development, we do need to talk about minerals – because they put a lot of money into local economies, including the West Coast, Otago, Waihi, Waikato and Southland.”
They generate vital export revenue directly from gold, coking coal and indirectly (heat and mineral input for steel, dairy, infrastructure).
He said the minerals sector wants to work with Government to support regional growth. Realistic pragmatism will drive that growth.
Baker said Conservation Minister Eugenie Sage's announcement that no new mining would be allowed on conservation land did come as a surprise because there are already stringent measures in place through the Resource Management Act and the Environment Court.
He said the actual footprint of mining was small. The largest gold mine, Macraes in Otago, has a footprint of around 1,400 hectares. There are larger farms than that. It has been estimated it would take 767 years of dairy production to match the revenue Macraes earned in its first two decades of operation.
“Ultimately, much of the land is rehabilitated, so the final footprint is even smaller.”
On coal, he said NZ uses the coal mined. Coal, with gas, plays an important role in providing energy security in New Zealand – as a back-up to renewable sources.
During last week's storm, lightning strikes halted gas processing and gale-force winds reduced wind farm output meaning coal fired generation had to come into play.
It also plays an important role in producing heat for industrial processes, including the dairy sector. Using other forms of heat would be more expensive, driving up production costs and making NZ less competitive.
“Until an economically viable alternative is found, coal remains an essential component for production processes for these regionally important employers and exporters.”
New Zealand exports coking coal – essential for steel production. While steel industries are developing ways to reduce emissions and more steel was being recycled, there was no plan available globally to make steel, at scale, without coking coal.
NZ coking coal has certain special qualities and is in high demand internationally. If we don't mine it, international customers will go elsewhere, and coking coal will still be burned.