The resources sector of New Zealand is one of the nation’s oldest industries and the country has notable natural resource endowments
A geographically isolated country, New Zealand sits in the southwestern Pacific Ocean and includes two main islands – the North Island, which is divided by mountain ranges surrounding an active volcanic and thermal centre; and the South Island, which contains mountains, fjords and the towering Southern Alps. Around three-quarters of New Zealand’s 4.8 million people live on the North Island, many of them in Auckland, the largest city.
New Zealand is committed to economic freedom and is open to global trade. It has a regulated financial system and according to the 2017 Index of Economic Freedom, the country’s economy has been steadily expanding since 2010.
New Zealand’s main global trade partners include Australia, China, the European Union, the United States and Japan. Its diverse market economy has a sizeable service sector, accounting for more than half of all GDP, complemented by productive agricultural and resources sectors. More than three decades ago New Zealand removed all farm subsidies, spurring the development of a vibrant and diversified agriculture sector with the lowest subsidies among OECD countries. It is also home to a sizeable tourism industry and is an emerging popular exporter of quality wines.
Resource exploration bolstering the New Zealand economy
New Zealand’s geology has created a prospective environment with opportunities for explorers. There has been an increase in offshore exploration and developments in oil and gas. A snapshot of New Zealand’s prospects shows epithermal gold mineralisation in the North Island and orogenic gold mineralisation in the South Island.
Gold production in 2016 was about 300 000 oz, mainly from the Macraes Mine in Otago (149 000 oz) and the Waihi Mine in the North Island (116 000 oz). The remainder was alluvial gold production mainly from the West Coast region of the South Island. Coalfields with high-grade coking coal deposits are located in the West Coast region and coalfields with high quality thermal coal on the North Island. A wide range of metallic minerals have been located in both islands. New Zealand’s western coastline offers 800 km of large scale iron and metallic mineral sand deposits, both onshore and offshore.
The minerals sector of New Zealand is one of the longest living industries in the country. It has a number of economically bolstering characteristics including:
- highly skilled and well-paid jobs
- an increasing focus on innovation and technology
- an ability to diversify domestic regional economies – especially areas that rely heavily on agriculture, dairy, forestry or fishing.
A unique and unconventional opportunity
All of New Zealand’s producing oil and gas fields are in the Taranaki region, which remains a focus for exploration; there are also seventeen other basins (mainly offshore) in the country.
To explore for and develop petroleum and mineral resources can take many years and there is significant opportunity for growth; however, investment comes with commercial risk and long development cycles. Investment in exploration in New Zealand has been significant in recent years. There are currently about 940 mineral exploration and mining permits both onshore and offshore.
The government has set out a clear business agenda for the resources sector, which includes the introduction of a competitive new system for granting permits for oil and gas exploration. However, this must be understood within the context of an ongoing debate in New Zealand society about the balance between the development of petroleum and minerals resources and, for example, the preservation of domestic and global environmental values.
Health and safety in mining
Since coal mining began in New Zealand, there have been 211 recorded deaths from nine separate explosions, the most recent at the Pike River mine in 2010, which ranks as New Zealand’s worst mining disaster since 1914 and resulted in the loss of 29 lives. The Royal Commission on the Pike River Coal Mine Tragedy made 16 primary recommendations directed at significantly improving health and safety in New Zealand generally, and more specifically in the mining and quarrying industries. Both government and industry are committed to implementing all 16 recommendations, including an effective regulatory framework for underground coal mining, an increased number of front-line health and safety inspectors, further development of the High Hazards Unit to improve workplace safety in mining and petroleum, and the introduction of a safety star rating system for employers to acknowledge and showcase best practice in workplace injury prevention.
Information in this snapshot came from the following sources:
100% Pure New Zealand. South Island [online]. Available from: www.newzealand.com/au/South-Island/.
2017 Index of Economic Freedom. New Zealand [online]. Available from: www.heritage.org/index/country/newzealand.
BBC, 2017. New Zealand Country profile [online]. Available from: www.bbc.com/news/world-asia-pacific-15357770.
New Zealand History, 2017. Pike River mine disaster [online]. Available from: www.nzhistory.govt.nz/culture/pike-river-mine-disaster.
New Zealand Ministry of Business, Innovation and Employment, 2013. The New Zealand Sectors Report 2013: Petroleum and Minerals [online]. Available from: www.mbie.govt.nz/info-services/business/business-growth-agenda/sectors-reports-series/pdf-image-library/petroleum-and-minerals-report/Petroleum%20and%20Minerals%20Report%202013.pdf.
New Zealand Ministry of Business, Innovation and Employment, 2016. Petroleum and Minerals Report [online]. Available from: www.mbie.govt.nz/info-services/business/business-growth-agenda/sectors-reports-series/petroleum-and-minerals-report.
New Zealand Petroleum and Minerals, 2017. Value and benefits to New Zealand [online]. Available from: www.nzpam.govt.nz/our-industry/value-benefits/.
Stats New Zealand. New Zealand in Profile: 2015 [online]. Available from: http://m.stats.govt.nz/browse_for_stats/snapshots-of-nz/nz-in-profile-2015.aspx.
New Zealand Petroleum and Minerals, 2015. New Zealand Mineral Resources [online]. Available from: www.nzpam.govt.nz/assets/Uploads/doing-business/mineral-potential/nz-minerals-resources.pdf.
OECD Publishing, 2017. OECD Economic Surveys: New Zealand [online]. Available from: www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-surveys-new-zealand-2017_eco_surveys-nzl-2017-en#.Wb9timcUl9B.
Feature image: Stockton open cast coal mine near Westport, New Zealand. Lakeview Images/Shutterstock.com.