New Zealand s place in the mining world

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Myles Elvin Chambers
8 years ago
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1 New Zealand s place in the mining world Background to the Schedule 4 debate Dave Craw Geology Department University of Otago

2 Sources of mined commodities Our society is totally dependent on mining for everyday functioning NZ imports very large amounts of mined commodities from around the world (= high metal miles ) NZ mines coal, gold, iron ore: geologically favourable for these commodities New mines in next years will be for these commodities

3 Coal Main resource: high quality steel-making coal = 80% of production NZ exports enough coal to make steel for 400,000 Toyotas/year coal ship, Lyttelton for Asia Stockton coal mine, Westport Imported Toyota Much on/near DoC land (Westland); some on Schedule 4 land,

4 GOLD Main growth in demand is for electronics (computers, cellphones) NZ produces enough gold for 100 million computers/year

5 Reefton DoC land Historic deforestation during gold mining and logging >50 year old forest New gold mine (2007) Slope rehabilitation

6 Coromandel Important historic gold production Similar mining and forest regeneration history to Reefton Schedule 4 but not National Park Golden Cross mine: re-mined in 1990s Part open-cut, underground Rehabilitated to pasture (rapid) but could have been forest (takes 50 years)

7 TIME Mining is a long-term industry, not a quick fix for immediate economic problems Getting a mine started can take 10 years Mining operation is variably ugly for years (but actually cleaner than dairy farming) Mining is largely invisible on the 50 year time scale Economic benefits persist for >100 years

8 The gold that built Dunedin & University of Otago Otago alluvial gold Gabriels Gully Macraes mine current turnover: $0.4 to $0.5 billion/year

9 MONEY Mining is not very profitable compared to (say) some service industries: high risk, large up-front investment,<10% return on investment Royalties are a small part of benefit to country Main economic benefit is to local economy: wages, services, infrastructure Tax on wages, services, is main advantage to national economy

10 Future resource supply in NZ ( years?) Commodity prices will keep going up in the long term Other countries will eventually resist sending their scarce resources to NZ at affordable prices Self-sufficiency will become more important than it is now

11 Example: steel is a mainstay of our society. We have known and potential iron ore resources and excellent coal deposits for smelting, but: numerous peripheral commodities are required Stainless steel (10% nickel, 15% chromium) copper

12 Red Hills, Mt Aspiring National Park: Schedule 4 land Hints of chromium, nickel, and copper deposits on Schedule 4 land Economic potential is currently being exaggerated in media Mining unlikely for >50 years Chromite deposit

13 Geological conclusions on the Schedule 4 debate Coromandel gold will be the main focus of Schedule 4 debate over next 10 years or more (every time the gold price rises) Our grandchildren and their descendants (not us) will make decisions on most mining of Schedule 4 land (i.e., present debate is largely irrelevant) Current media hype about the value of commodities on Schedule 4 land is premature and highly speculative Schedule 4 listing means that further knowledge will be obtained at taxpayers expense only; private sector will need right to mine before they invest

14 Mining methods: Small volumes of rock Large volumes of rock Underground mine ( keyhole surgery ) Extract some of richest ore, abandon depleted ore body Open cut mine Extract most of ore body Underground mining results in less efficient use of resource Less mess for local community to tolerate Less desirable (=irresponsible?) for NZ, grandchildren, and planet

15 The million dollar questions JORC Code Is it there? Present knowledge Mine decision Can it be mined profitably?

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