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Northland's billion dollar mining sector untapped - 31/05/2007

Northland has a billion dollar mineral potential that could significantly boost employment and regional prosperity in the region, according to a new study.The study, conducted by GNS Science and the NZ Institute of Economic Research, has revealed that $28 billion of non-metallic and $5.2 billion of metallic mineral deposits are potentially present in the region. It is the first study of its type in New Zealand.

Northland mining people

The Foundation of Research Science and Technology funded the assessment of Northland’s mineral resources, while the study of the economic effects was supported by the Crown Minerals Group of the Ministry of Economic Development and the Far North and Whangarei District Councils, with Enterprise Northland facilitating the process.

The Far North District Council, which contributed to initiating the studies through their Local Economic Development Strategy, says they highlight the untapped potential of the Northland mining industry. “We are astounded at the results of this survey which provide a compelling indication of the economic potential of this largely ignored sector”, Cr Ian Bamber, chair of the Far North District Development Sub-Committee says.

Cr Bamber says the study is an excellent example of what can be achieved when groups of stakeholders collaborate and work together on a project such as this. “The reports have the potential to be a very powerful economic development tool, in part because we now have robust and quality data on the potential that minerals provide in the North. We now look forward to continuing to work with our partners in this area to maximize the value that the reports deliver”.

Enterprise Northland has also positively received the report: “We are looking at the potential for more than 2,700 extra full-time job positions being created and billions of dollars of revenue being pumped into the economy over the next 20 – 30 years. This provides a very strong argument to explore these opportunities further,” John Halse of Enterprise Northland says.

The study is a conservative estimate of resources in Northland based on a comparison with other parts of the world with similar geology.

Mining already makes a significant contribution to Northland of at least $100 million each year, and is essential for maintaining infrastructure such as roads. Revenue from cement, building materials (aggregates), limestone and china clay has Northland ranked fifth out of fifteen regions in New Zealand.

The new study has revealed that mining revenue could increase from more than $100 million a year to $354 million a year, under a scenario for realising Northland’s mineral potential. This would inject more than $683 million into the economy each year, when taking into consideration the indirect benefit to local business.

Economy – wide effects, (mining sector + other sectors)

  Far North District Whangarei District Kaipara District Northland Region
Increase in production
($million)
372 24 236 683
Increase in GDP
($million)
151 10 98 279
Increase in employment 1,566 95 891 2,720

(Northland region totals differ slightly from the sum of the district totals)

GNS Science and NZIER identified the potential for Northland’s mineral revenue to increase to $354 million by:

  • increasing the production of aggregate and limestone;
  • establishing a gold-silver mine
  • introducing a second mine to source aluminum, copper or gold-silver;
  • boosting silica sand mining; and
  • adding a small mining operation in one or more commodities such as bentonite, coal, feldspar, kaolinite, kauri gum, peat and zeolite.

New Zealand Institute of Economic Research (NZIER) senior economist Patrick Nolan says the benefit from increased mining activity is not limited to those that directly benefit. “As well as the direct benefit to the owners of the mines and the people they employ, benefits are spread throughout the regional economy including local businesses.”

GNS Science senior minerals geologist Tony Christie says: “Northland is sitting on billions of dollars worth of minerals that have the potential to give a significant boost to employment and regional prosperity.”

“Many people are surprised to hear that Northland has a significant minerals industry today,” he said. Northland currently produces superior china clay, has the largest cement plant in the country and provides limestone for fertiliser and aggregate for roads and concrete. Today, there are more than 50 quarries producing aggregate in Northland and 20 quarries producing limestone.

However, by world standards, Northland is under explored when the wide range of minerals available is taken into consideration.

In addition to the minerals already extracted in Northland there is potential for aluminium, coal, copper, gold, lead, mercury, nickel, peat, phosphate and zinc, Dr Christie says.

Initially, geophysical studies including ground and air surveys would need to be undertaken to understand the region’s existing deposits. “The improved knowledge from surveys will make it easier to demonstrate to exploration companies that Northland is an attractive place to explore. Exploration companies need to be convinced that Northland is more attractive than other places they might be focusing on,” he said.

The minerals industry sector group that collectively coordinated the research project will now turn its attention to ensuring that the value of the reports to investment and other planning decisions is realised.