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A dramatic increase in New Zealand mineral exploration spending was the highlight of a mining year to March 2008 that otherwise “crabbed sideways”. According to the annual overview presented to the New Zealand branch of the Australasian Institute of Minerals and Metallurgy (Aus-IMM) conference by Campbell MacPherson consultant Tony Haworth and consulting geologist Richard Barker, mining has been in limbo, although exploration spedning is up. Inclusive of consenting and associated costs, the exploration spend leapt to $33 million after slumping to $18 million in 2007, barely above the 2005 level. In 2006 the spend was about $28 million. “The Waikato region has accounted for more than half of all exploration expenditure since 2000,” Haworth and Barker reported. Somewhat surprisingly it was dominated by coal exploration in the Waikato field, backed up by gold exploration, especially by global giant Newmont, in the Hauraki fields. New Zealand reflected the global situation which saw US$10.5 billion ($15.5b) spent on exploration in 2007, and mergers and acquisitions top US$200 billion ($298b) in the face of high demand for commodities from India and China that continued despite the credit meltdown in the United States. By contrast, mineral production in New Zealand last year was in line with 2006 at about $1.5 billion, and this seems to signal an end to the growth surge that began in 2002. Gold output remained virtually unchanged at 335,000 ounces though rising prices pushed its value to $320 million. Problems at Solid Energy’s Stockton mine contributed to a reduction in hard coking coal exports to just over $2 billion, while imports slumped 40 percent to 730,000 tonne because of lower usage at Genesis Energy’s giant Huntly power station. Coal did not share the jump in exploration expenditure, declining to just $5 million in 2007-08 compared to $11 million the previous year. Haworth and Barker estimate the total export value of coal, gold, ironsand and industrial minerals at $750 million for 2006-07, and noted that this exceeded receipts for the booming wine industry. “Projected increases in the volume and value of export coal, together with gold price increases, could see the annual value of New Zealand’s coal and minerals exports reach $1 billion for the first time in 2008 or 2009,” they say. OceanaGold reported total production of 183,000 ounces – 116,000 ounces of it from the Macraes opencast mine, 29,000 ounces from the Frasers underground mine and 39,000 ounces from the Reefton opencast. Newmont reported 93,000 ounces sold from its Martha Pit and Favona underground mines but the company also accounted for a third of the country’s mineral exploration expenditure at $10 million. With less than five years of reserves left at those mines, Newmont is becoming increasingly active in exploring round Waihi. Coal exports will be boosted in the current year, eventually by a million tonnes a year, as the listed company Pike River Coal finally comes into production about now after repeated delays caused by the tortuous West Coast geology. Among other minerals, New Zealand’s on-shore and off-shore ironsands deposits are attracting international attention, with major players Rio Tinto, Sinosteel Australia, Trans-Tasman Resources, Sericho developments and FMG Pacific all either exploring or seeking permits here. There is presently only one ironsands producer, Bluescope NZ Steel, which extracts about two million tonnes a year from Waikato North Head for NZ Steel’s plant nearby, and from its Taharoa mine for export. Apart from Pike River Coal, which was the market’s standout performer this year, “The stock market performance of New Zealand mining companies has been disappointing,” Haworth and Barker reported. However, capital raising for mining activities jumped over 50 percent in 2007 to $530 million. “Against the background of a buoyant global mining industry, record international exploration spending and out-performance of global mining socks versus other shares, the New Zealand mining sector appears to have crabbed sideways in 2007-08. “It is pleasing to note the significant rebound in combined prospecting and exploration spending, which is now running at more than 10 times 2001 levels. However the drop-off in coal exploration is a surprise, as this should be accelerating given the rapid rise in thermal and coking coal prices,” Haworth and Barker says. All articles on this website are copyright to Contrafed Publishing Co. Ltd. |