Past and Future Trends for Gold in New Zealand

As in other countries, gold mining inNew Zealand has been cyclic in character. Looking at these cycles may provide insights as to what may occur in the future and that is the basis for this study.   New Zealand has experienced four gold mining cycles. The first began in 1857, peaked in 1866 and terminated in 1890. This cycle was characterised by alluvial gold mining by individuals and small groups. This is referred to as the Labour Led cycle. The second cycle began in 1890 and reached its peak in 1906 and terminated in 1929. This cycle was characterised by the use of dredges in alluvial gold mining and was also the peak of hard rock mining. This cycle is referred to as the Technology Led Cycle. The third cycle peaked in 1940. This cycle was far less significant than the previous cycles, arising out of the depression when the unemployed embarked on small scale alluvial mining. This overprinted the continuing decline that occurred after 1906. This cycle is here referred to as the Depression Overprint Cycle.   The fourth cycle began in 1984 when production began to climb rapidly from a very low base. The growth in production was spurred by rising gold prices in the early 1980s resulting in relatively low grade gold-bearing alluvial ground becoming economic. But in the 1990s, production from the new hardrock mines in Coromandel and Otago has overshadowed alluvial production. This cycle is here referred to as the Price Led cycle.   What are the future prospects for gold in New Zealand? Although there are many factors involved, this will be largely determined by two factors; firstly, continued access to prospective gold-bearing properties, and secondly, the price of gold. Based on these factors, three future industry scenarios have been developed. The first of these is industry collapse, in which access to prospective property is constrained and prices mayor may not weaken. The second is industry consolidation, in which the available ground is accumulated by a small number of large companies who can use economies of scale to weather price fluctuations. The third scenario is industry growth, in which access to prospective ground is constrained in environmentally sensitive areas but is otherwise relatively unconstrained. Efficient companies are allowed to work in a policy and economic framework that allows them to make a major contribution to the economy.   While the industry cannot control these critical factors, a good knowledge of the positive role gold mining could play in the future economy may provide a framework by which the access issue, in particular, may be addressed from a balanced perspective.