The effects of plunging global commodity prices will be high
on the agenda of New Zealand's annual mining conference this
week, with hundreds of New Zealand jobs shed during the past
year and all companies under operational reviews.
For the faint-hearted on the sidelines, some will be
questioning whether New Zealand's resource sector is not in
However, as with other primary industries, such as forestry,
lamb and beef and dairying, the respective sectors
consolidate in the tough times and ride out their cyclical
troughs, albeit at the expense of regional jobs, exploration
or research and development.
In total, hundreds of millions of dollars in resource-sector
spending has been stripped from New Zealand's economy, or
deferred, during the past 18 months.
The 37th conference of the New Zealand branch of the
Australian Institute of Mining and Metallurgy has already
attracted more than 300 delegates, including from Australia,
Canada and the United States, for the three-day event
beginning in Nelson today.
Since its election, the Government has held up the resource
sector as a cornerstone of economic resurgence, but that
claim now appears hollow, given the separate oil and gas
sector has gained major concessions compared to the resource
The Government may now have to underpin Solid Energy's future
with a $100 million loan, but it has rejected suggestions of
a separate $30 million cash injection to keep one of its West
Coast mines operational.
Then, to keep Rio Tinto in New Zealand, the Government
shelled out $30 million and concessions to keep the Tiwai
Point aluminium smelter open, arguably linked more to the
pending Meridian Energy float than to the loss of 3000 direct
and indirect Southland jobs.
With the sector under siege on several fronts, there are
heightened expectations that Energy and Resources Minister
Simon Bridges should front up tomorrow, as scheduled, with
some positive, tangible support for the mining community.
Previous ill-timed Government announcements on mining around
conservation areas and a hurried watering down of proposed
tax increases last year have left industry players perplexed
over the National-led Government's ability to deliver actual
benefits for its ''cornerstone'' economic sector.
Neither the junior minerals explorers nor the country's
largest gold and coal producers have been immune to commodity
volatility, with gold trading 25% down from last September's
high and specialist coking coal down 60% on two years ago.
Global thermal coal prices are so depressed the state-owned
Huntly power station is importing Indonesian coal, while
neighbouring supplier and state-owned enterprise Solid Energy
has slashed its Huntly workforce more than 60% during the
past year - about 150 jobs. About 700 jobs at indebted Solid
Energy are gone across the country.
Oceana Gold's entire operations remain under review, with
mine mothballing and 260 West Coast jobs jeopardised, while
Bathurst Resources is still extricating itself from legal
wrangles delaying its start-up by almost two years.
The North Island's Newmont Waihi Gold has let go contractors
as work is completed but has so far managed to retain
staffing levels, with two new underground mines, Trios and
Correnso, in the pipeline after the closure of their
While the China boom created insatiable demand for iron ore,
gold and coking coal, those record commodity prices hid
escalating production costs that have been laid bare only now
that prices have plunged.
During the conference, operational and technical updates are
scheduled from companies including Oceana Gold, L&M
Group, Bathurst Resources, Glass Earth Gold, MOD Resources,
Chatham Rock Phosphate and lobby group Straterra.
There will be presentations from numerous government agencies
and the universities of Otago, Auckland, Waikato and