Plea for councils to help mining projects

The industry body says up to 40 per cent of spending on new prospecting and exploration goes on consenting and other administrative costs. Photo / Steven McNicholl

A minerals group says Government interest in speeding up big mining projects is a move in the right direction but smaller operators face continued long, expensive delays.

The Minerals Industry Association says up to 40 per cent of spending on new prospecting and exploration was going on consenting and other administrative costs with dozens of local authorities throughout the country.

This hit small companies especially hard. Association chief executive Doug Gordon said analysis of Ministry of Economic Development figures was shocking.

"A permit from an agency is not worth anything because then you have to negotiate access and consents," Gordon said. "When you go to these councils, depending on who's sitting on them and what their views are, you've got to pay through the nose either with time or money."

The Ministry for the Environment is investigating new laws which would allow granting of resource consents for "regionally significant" projects to be accelerated.

Gordon said this was encouraging but required new thinking among local authorities.

"It's one thing for the government to have that intent but it's another thing to change the culture in all these regional and district councils and agencies to get them to do it," he said.

Rule changes for big projects could work against smaller operators who were seen as competition by big companies.

"That's a possibility. When you think about minerals [explorers] they're small with relatively small amounts of money rather than a Bathurst or a Newmont ... They can keep on chugging along."

Association research has found the mineral sector could easily double its current $1.5 billion contribution to gross domestic product if investment in the exploration sector was increased. Gordon said to do this a trebling of exploration investment was needed.

"That means attracting to New Zealand high-risk foreign direct investment in exploration. It's not necessarily about numbers of permits, it's about how much money is put into drilling holes to find and prove the existence of commercial mineral deposits."

On average, one in 1000 drill sites became commercially viable mines.

According to the analysis of the MED figures, spending on prospecting and exploration fell from $38.5 million in 2005 to $27.4 million in 2010 although bounced back up to $36.7 million last year.