The Government wants to remove the requirement to actively promote the search for fossil fuels, after a High Court decision ruled that climate change could not be considered when issuing minerals permits. It will also provide for new engagement with iwi.
The changes were being introduced to Parliament today under urgency provisions.
This could shift the focus of the legislation from economic to environmental.
Under the proposed changes, the Act will no longer actively 'promote' prospecting, exploration and mining of Crown-owned minerals.
Energy and Resource Minister Megan Woods said those requirements were "out of date".
"It's time we changed our laws so that they are consistent with our climate change commitments to phase out polluting fossil fuels and transition to net zero by 2050," she said.
The previous National government added the legislative requirement to promote mining activities in 2013.
But Ms Woods said it was out of step with the direction the world was going.
"The (Act) sets out how the Government allocates rights to mine Crown-owned minerals for New Zealand's economic benefit.
"While this role won't change, these amendments will bring the Act up to date, allow us to respond to the evolving needs of Aotearoa, and give the sector greater certainty about the future of minerals decision making.
"Fossil fuels will be phased out in a way that ensures energy remains secure, reliable, accessible and affordable for all New Zealanders."
But mining advocate Straterra chief executive Josie Vidal said removing the Government's obligation to promote prospecting, exploration and mining was at odds with what was happening globally.
"The world needs more mining to meet climate change goals, so the hunt is on for the mineral supply to meet demand. More than $4 trillion worth of investment is going to be needed over the next 30 years in mining and minerals processing," Ms Vidal said.
"An electric vehicle uses six times the minerals of a conventional car, and an onshore wind plant uses nine times more minerals than a gas fired plant. More than 220 tonnes of coal are required to build a wind turbine."
While most countries were gearing up to create supply for batteries, New Zealand was going in the opposite direction.
The Government was conflating mining and emissions, when not all Crown minerals were fossil fuels, she said.
It sent a negative message to the investors needed for mining.
"Trade partners ask me what support the Government gives mining. Those are awkward conversations. And I'm a big champion of brand New Zealand."
Green Party spokeswoman for energy and resources Julie Anne Genter said the Government needed to go further to end the "nonsensical search for fossil fuels".
"Keep fossil fuels in the ground. That is the simple message the science has made patently clear - and that elected leaders the world over need to act on. Now is the time to take a leadership role and give proper weight to climate change in crown minerals decisions."
The Crown Minerals Act had never given sufficient weight to climate change, even before National's amendments, she said.
The Government says the changes will also create more certainty around engagement between industry, iwi and hapu.
The Act would be amended to explicitly provide hapū and iwi opportunities to review and discuss annual iwi engagement reports.
