New Zealand’s mining industry says it is battling for its continued existence as Parliament considers a new piece of legislation which would change the way mining is regulated.
The change has been made as a response to climate change.
But it will impact many minerals which have no effect on the climate.
Industry representatives told a Select Committee on Friday that it was an ideological move which had the effect of putting the industry under attack.
Even the Regulatory Impact Statement from the Ministry of Business, Innovation and Employment conceded that the change led to fewer opportunities to explore, prospect and mine for Crown-owned minerals and potential lost revenue to the Crown in the form of fees and royalties that came from such activities.
The complaints are over wording in the Crown Mineral Act which would change the Government’s role from promoting mining to managing it.
The Government is proposing changes to modernise the Crown Minerals Act 1991 (CMA) to support more environmentally conscious management of resources, said Energy and Resource Minister Dr Megan Woods when the Bill was introduced last November.
“Requirements in the CMA for the Government to actively promote fossil fuel exploration are out of date. It’s time we changed our laws so that they are consistent with our climate change commitments to phase out polluting fossil fuels and transition to net zero by 2050,” Megan Woods said.
“The National Government added the legislative requirement to promote mining activities in 2013, but this is now out of step with the direction the world is going.
“The CMA sets out how the Government allocates rights to mine Crown-owned minerals for New Zealand’s economic benefit.
“While this role won’t change, these amendments will bring the Act up to date, allow us to respond to the evolving needs of Aotearoa, and give the sector greater certainty about the future of minerals decision-making.
“Fossil fuels will be phased out in a way that ensures energy remains secure, reliable, accessible, and affordable for all New Zealanders.”
But the Bill covers a great deal more than fossil fuels.
The mining industry lobby group, Straterra, in its submission on the Bill said there was an implication that all Crown minerals were fossil fuels when they were not.
The Aggregate and Quarry Association’s submission said aggregate was critical to building the economy. It formed the foundation of buildings and made up 75–90% of the material in roads and infrastructure.
The concern about the change in wording was outlined in a commentary by the law firm, Dentons.
“The Government is considering a radical shift in the way Crown minerals are managed in New Zealand, leading to a mixed reception in climate change circles and industry groups,” it said.
The Bill proposes to alter the standing purpose of the Act from the promotion of exploration and development of Crown minerals to the broader management of such activities. The functions of the Minister will change from attracting permit applications to a more discretionary position where permit applications will be offered to prospectors according to this discretion. Minerals programmes which are administered by the Act would subsequently be amended to reflect the change in purpose and scope of the Minister’s powers.
Dentons said the Bill might not look like an entire overhaul of the (Crown Minerals) Act, “however, the potential consequences of this Bill are significant. “
The law firm said the proposed amendment to the Act’s purpose meant the discretion available to the Minister to consider applications has widened.
In a way, the Bill is a product of the decision by Woods in April 2018 to grant no more offshore exploration or mining permits.
Obviously, if decisions like that were made under an Act which required the Minister to promote an activity which she intended to ban, there would be scope for legal action.
The Ministry of Business, Innovation Employment, in their Regulatory Impact Statement on the Bill, more or less conceded that the contradiction was the problem, albeit that they expressed their view in class Wellington bureaucratise.
“This promotional intent is inflexible and unable to accommodate evolving policy objectives as to whether and when rights to Crown-owned minerals are allocated,” the statement said.
And it is the spillover effects of this into other sections of the mining industry which were the subject of a number of submissions to the Economic Development, Science and Innovation Select Committee on Friday.
The CEO of the mining industry lobby group, Straterra, Josie Vidal, said the change in wording sent a message to investors that New Zealand didn’t want to mine its resources.
“The proposed changes will translate directly to reduced investment not just to the target of the changes, fossil fuels, but to all minerals; the ones that make modern living possible and the ones that will protect, build and sustain a low emissions future,” she said.
“It would be concerning if ideology isolated New Zealand from the rest of the world in the quest to resource a better future with sustainably sourced minerals, responsibly mined and in an employment environment that values health and safety, working conditions and pay.
“The ideological stance encourages the view among sections of the public that mining should not be supported and perpetuates the myth and falsehood that modern mining in New Zealand is not or cannot be responsible environmentally responsible.
“As owner of the Crown Minerals, we believe the Government has a responsibility to ensure those minerals develop for the benefit of New Zealand. “
Minerals West Coast manager, Patrick Phelps, said the mining sector on the West Coast in 2021 accounted for 8.4% of GDP and directly employed about 600 people, or 3.5% of the total West Coast population.
“But what I see in this legislation is, in my view, a perverse intention for the Crown as the custodian of those minerals on behalf of the people to effectively sterilise those resources,” he said.
The Bill will be reviewed by the Select Committee, which could adopt a proposal from another submitter, Greymouth Petroleum, who suggested the wording be changed to define the purpose of the Bill as not only to promote mining but also to manage it as the Minister has proposed.