Our Mineral Future : A Political Perspective

Good morning ladies and gentlemen, and may I extend a particularly warm welcome to our shores to those of you who have travelled from overseas to attend this conference. I trust that you will find your visit to New Zealand both rewarding and enjoyable.   This is now my fourth appearance at a New Zealand minerals conference, the second of which has been jointly co-hosted by AusIMM and Crown Minerals. Since taking on the role of Associate Minister of Energy, I have had the opportunity to meet most of the industry players, and to visit a good number of the major mining operations. Through all of this I have become increasingly aware of not only how dynamic the minerals and coal industry is but also the array of factors that affect investment decisions in this business. Many of these factors, such as commodity prices and availability of investment funds, are determined primarily on the international stage. Others however, such as the allocation, regulatory and the fiscal regimes for minerals, are closer to home and are directly influenced by government policy decisions. I will talk more on what the government proposes in this area shortly.   But first, I would like to commend you all on your industryÆs continuing contribution to New Zealand Æs economy. 2004 has seen New Zealand Æs mineral and coal output top $1 billion for the second consecutive year. To put this achievement in perspective, it represents a staggering 47 per cent increase over the national output value recorded just five years ago. Notable contributions over the year came from gold which increased production to 10.2 tonnes (up nine per cent), ironsand production at 2.3 Mt (a 20 per cent increase), and industrial rocks and building stones (up six per cent) with rock for building, cement and roading showing significant rises on the back of strong regional growth and infrastructure development. Many regions, in particular Auckland, Bay of Plenty, Wellington and Southland, recorded significant increased regional activity with supply often struggling to meet demand. By contrast the coal sector had a relatively steady year with production remaining stable at just over five million tonnes for the second year running. Coal exports however are now consistently exceeding two million tonnes annually, generating export earnings of over $200 million, and could well be higher with rail capacity improvements. Many countries throughout the world are now importing our high quality bituminous coal for steel manufacturing and other industrial uses.