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Despite being ranked the worst country in the world at encouraging mining, the value of mineral production topped $2 billion for the first time last year. The 2008-09 Fraser Institute Annual Survey of Mining Companies found the country overall the least attractive development prospect of 71 countries and states surveyed, Campbell MacPherson analyst Tony Haworth and consulting geologist Richard Barker told the conference in their annual overview of the industry. The Fraser survey covers two key indices. The first of these, the policy potential index, is a composite measure of the effects of government policies, ranging from regulatory duplication and inconsistency to information databases, from the point of view of a minerals exploration manager. New Zealand ranks 45th in the index in which all seven of the Canadian states are among the top 10, while South Australia is the best of the Australian states in 16th place. The second key index is the “current mineral potential”, which ranks jurisdictions on how encouraging or otherwise they are to exploration. Here New Zealand ranked 62nd, but was rated bottom of the heap for proactively encouraging investment. Not that the survey was all bad news. It ranked highly for such criteria as political stability, security, labour relations and labour skills, and – a tribute to the work of Crown Minerals and state-owned research institute GNS Science – was also above average for its geological database. Despite the chilly atmosphere its exudes to global explorers, our ex-mine mineral production has jumped sharply in value over the past half-decade, from just over $1 billion in 2003 to $2 billion last year, Haworth and Barker reported. The rise largely reflected recent high commodity prices, and the authors noted that current and proposed new developments “are confined to the traditional coal and gold sectors, and are based almost entirely on resources that were discovered and defined more than 20 years ago”. Gold production last year, at 523,000 ounces, was the highest since the 19th Century and, at $626 million, was almost double the 2007 value. The gold price had continued to climb throughout 2008 on the back of concerns about global markets and the weakness of the United States dollar, peaking at $US1000/oz in March this year. In New Zealand dollar terms, gold peaked in February at $1800/oz, but the recovering Kiwi has been the main factor in it slipping back to $1500/oz – “still very attractive to New Zealand gold producers” – by last month. While gold firmed more or less steadily, our other main mineral export of high-grade coking coal went on a roller-coaster ride, soaring to $380/tonne ($US300/t) in July last year before plunging to $226/t ($US129/t) this year. Overall coal production was steady at 4.9 million tonnes, with a decline in the output of sub-bituminous coal for domestic consumption offset by an increase in West Coast bituminous coal for export.
Q&M Vol.6 No.5 October-November 2009 All articles on this website are copyright to Contrafed Publishing Co. Ltd. |