The New Zealand Government has recently released its Minerals Strategy and Critical Minerals List, signalling a renewed commitment to expanding the mining sector. As the global metals and mining sector navigates increasingly geopolitical turbulence, Australia’s neighbours 'across the ditch' may present an intriguing opportunity for companies with international aspirations.
The inclusion of gold and metallurgical coal on the Critical Minerals List, alongside other key resources, highlights a significant shift in the country’s resource policy. This move reflects a broader global trend towards securing domestic supply chains for minerals vital to economic development and the energy transition. For Australian miners, accustomed to navigating complex regulatory environments, this announcement warrants close attention.
Strategic intent and growth objectives
The cornerstone of the New Zealand Government’s strategy centres on driving economic growth through the expansion of mining activities. Representing a departure from previous policies that often prioritised other considerations over resource extraction and the economic opportunities that flow from mining projects. The New Zealand Minister of Resources’ public messaging underscores this commitment, indicating a willingness to streamline regulatory processes and attract investment.
For Australian companies, this strategic intent, together with a range of regulatory changes, signals a potential easing of the barriers that have hindered significant mining investment in New Zealand. The prospect of a more streamlined approvals process and a government actively promoting mineral development is undoubtedly attractive. However, it is essential to approach this with a nuanced understanding of New Zealand’s unique context.
Critical minerals and diversification
The Critical Minerals List itself is a strategic document, outlining the government’s priorities for resource development. The inclusion of gold and metallurgical coal, while potentially controversial in some quarters, underscores the government’s pragmatic approach to leveraging its natural resources to drive growth in New Zealand’s export revenues. Beyond these, the list includes 35 other critical minerals, like rare earth elements and tungsten, which are vital for advanced technologies and renewable energy.
This diversification presents opportunities for Australian companies with expertise across various commodities. As the global demand for critical minerals continues to rise, New Zealand’s strategic focus aligns with broader market trends. Australian miners with experience in developing and extracting these resources are well-positioned to capitalise on these opportunities.
Navigating regulatory and environmental considerations
The government has developed a new fast-track consenting system for environmental and planning approvals. This means the timeframes to obtain consents are far shorter than standard consenting processes. Several New Zealand mining projects have secured use of this consenting pathway.
While the government’s messaging indicates a willingness to streamline regulatory processes for mining investments and development, it is important to recognise that New Zealand maintains high environmental standards and associated processes. The country’s reputation for pristine landscapes and its commitment to sustainability mean that any mining development must adhere to stringent environmental regulations.
Australian companies must be prepared to demonstrate a robust commitment to environmental responsibility and sustainable practices. This includes implementing best-practice environmental management systems, engaging proactively with local communities and other stakeholders and minimising the environmental footprint of their operations. Furthermore, engaging with Māori iwi is crucial. Local iwi in the vicinity of a mining development are key stakeholders and play a critical role in environmental consenting processes required before commercial operations begin.
New Zealand’s overseas investment controls, particularly as they relate to acquiring interests in land, have traditionally been regarded as onerous. However, recent government initiatives signal a much less restrictive approach to overseas investment. A Ministerial Directive to the Overseas Investment Office in June last year has reduced consenting timeframes and streamlined the process. This regime should no longer be regarded as a major barrier to mining investments.
Investment opportunities and market dynamics
The New Zealand Government’s Minerals Strategy and associated regulatory changes intended to streamline the overseas investment process open up potential investment opportunities for Australian mining companies. The prospect of a more favourable regulatory environment, coupled with the growing demand for critical minerals globally, create an attractive market for exploration and development.
However, Australian companies must conduct thorough due diligence and understand the specific market dynamics in New Zealand. This includes assessing the availability of infrastructure, the cost of labour and the potential for community opposition.
Strategic considerations for Australian miners
For Australian mining companies with international ambitions, New Zealand's Minerals Strategy and recent regulatory reforms offer a real opportunity. But success will require a strategic and nuanced approach. Key considerations include:
Regulatory compliance: understanding and adhering to New Zealand’s environmental and regulatory framework.
Community engagement: building strong relationships with local communities, particularly Māori iwi.
Environmental stewardship: demonstrating a commitment to sustainable mining practices.
Market analysis: conducting thorough due diligence and understanding the specific market dynamics.
Strategic partnerships: exploring potential partnerships with local companies and stakeholders.
Conclusion: a new chapter for New Zealand mining
The New Zealand Government’s Minerals Strategy marks a significant turning point for the country’s mining sector. While challenges remain, the government’s commitment to driving growth and attracting investment creates exciting opportunities for Australian mining companies.
As our industry navigates a complex global landscape, the ability to adapt and capitalise on emerging opportunities is paramount. By approaching the New Zealand market with a strategic and responsible mindset, Australian miners can play a crucial role in shaping the future of New Zealand’s mineral sector.
This article has been prepared with the assistance of David Coull of Bell Gully - david.coull@bellgully.com.