New Zealand wants the global investment community to know it is open for business, Minister for Resources Shane Jones said at the Prospectors & Developers Association of Canada (PDAC) convention.
Speaking to the Investing News Network (INN), Jones outlined the work the country is doing to reinvigorate its mining sector, highlighting the recently passed Fast-track Approvals Act 2024.
Signed into law before Christmas of last year, the fast-track approvals system is a streamlined process for New Zealand project applications that have the potential to assist in economic growth.
"The new Act helps cut through the thicket of red and green tape and the jumble of approvals processes that has, until now, held New Zealand back from much-needed economic growth," said RMA Reform Minister Chris Bishop on February 7, the day the fast-track program officially opened for applications.
"What we've done is clearly and unambiguously identified that the purpose of the fast-track legislation is economic development," Jones said, adding that it also gives consideration to Indigenous people and local communities.
"But the overarching purpose ... is economic development, because we want to take our country into a new epoch of wealth and prosperity, and we are no longer going to enable these trickle-riddled processes to hold projects ransom."
New Zealand's mining history
Speaking about the history of mining in New Zealand, Jones said miners were originally attracted to gold.
As New Zealand Petroleum & Minerals explains, European settlers began arriving in New Zealand in large numbers after 1840, and they honed their efforts on gold, as well as coal, leading to gold rushes in the 1860s.
“By 1870 an impressive selection of metal ores had been discovered in New Zealand, but only three metals were successfully mined in 2005 — gold, silver and iron," the organisation states.
Today, gold and coal collectively account for about 80 percent of New Zealand's mineral exports, producing export revenues of about 1.2 billion New Zealand dollars in the year to June 2023.
Jones also mentioned New Zealand's iron sands industry, calling it "Sahara in size."
“Nowadays, we are putting a great accent on security, economic resilience, and we're attracting and changing the law to make it a lot more feasible to extract and develop greater resilience through using our own resources and, quite frankly, our own natural endowment,” Jones further told INN.
Today, key players in New Zealand's mining industry include OceanaGold (TSX:OGC,OTCQX:OCANF), whose Macraes operation is said to be the country's largest operating gold mine with over three decades of continuous output.
New Zealand's new critical minerals list
Jones also discussed New Zealand's new minerals strategy and critical minerals list, announced on January 31.
He highlighted the addition of gold and coal as critical minerals, noting that coal is a key export for New Zealand.
“(Coal) represents important regional development and regional jobs. It genuinely is highly sought after as a key feature of the steelmaking process, which, after all, lies at the heart of a lot of global industrial processing,” he said.
When it comes to gold, Jones pointed out that it's often found in conjunction with antimony.
“Gold is often the location where you find antinomy, and we have substantial potential for antimony," he said.
“Simply put, New Zealand wouldn’t have the skills, machinery, resources, and capability to support a modern and responsible mining sector without (gold and coal),” Jones also noted.
Following the addition of gold and coal, New Zealand now has a total of 37 critical minerals on record.
Banking issues, supply chain security
Economic progress will always be linked to financial institutions such as banks, and Jones believes New Zealand’s banking situation may be hindering the country's progress. He spoke to INN about the issue of banks refusing to provide services to businesses that don't align with their climate change commitments.
On February 10, New Zealand First introduced a member’s bill to counter the banks’ actions, saying that no New Zealand business should be denied banking services unless the decision is grounded in law.
“I do think the banks need to be called out,” Jones said. “It is not their job to be the moral arbiters of how businesses or investors in New Zealand survive or die; their job is to work within the context of what can make money.”
Speaking about supply chain security, Jones said there is a need for New Zealand to ensure that the country's resources can be used as much as possible within guardrails, and that includes fossil fuels like coal.
“No one bought into the structural adjustment championed by the economists of the 1980s, including Milton Friedman, more than New Zealand, but now we’re learning that what worked then needs to be recalibrated," he said.
“My message to every other modern economy in the OECD is this: Unless you’re blessed with endless amounts of nuclear, there will be times that you must rely on fossil fuel," he said.
New Zealand mining open for business
New Zealand currently holds a GDP of about US$260 billion, and in 2023, mining was recorded as the country’s most productive industry in terms of GDP per filled job, showcasing its importance in the country.
Jones emphasised his focus on conveying the New Zealand opportunity to the business community.
“It's really important that the various firms that operate out of New Zealand — selling services, engaging with the investment community — that I stand in solidarity with them," he said when asked about his trip to PDAC.
"But also to convey to the broader investment community and potential mining firms that although we're a dairy nation and we're the land of the hobbits, we are also very keen to reinvigorate and grow our mining sector. You can conceive of the New Zealand economy as being akin to a quiver of arrows, and each arrow has to strike a target.”
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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
