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Hopes are riding high in the mining industry in the wake of the government's signal that it will consider looking at new mining on conservation land.
At the end of last month, Energy Minister Gerry Brownlee announced the government would investigate tapping into New Zealand's mineral estate on protected conservation land, estimated to be worth $140 billion.
New Zealand's mineral resources include coal, gold, rock phosphate, oil and gas and gas hydrates, and iron sand, and the New Zealand Minerals Industry Association estimates that 70% of minerals lie under Crown land.
After nine years of a Labour government, the sector now feels it has a more receptive ear at the Beehive, with McDouall Stuart Securities spokesperson John Kidd saying the change of government has seen the sector viewed in a different light.
'What we're seeing in the last year or so is a pick up in political sentiment towards the sector. The importance of that sentiment can't be underestimated. Mining, as we all know, a very political game and that certainly flows through to investment as well," he says.
However, he remains cautious on whether this apparent change of view will prompt increased flow of investment in the mining industry.
"I think it's important to put all this in context. Mining is a very long term game generally. While we're all hopeful increased activity may flow from this, it's a very complex game," he says.
The public, in general, are weary of increased mining. However, Kidd says the balancing of environmental and commercial concerns is integral to the business of mining, with miners having adjusted their mindsets and business models over the years to now set a high standard in terms of best practice.
And, he believes New Zealand can undertake more mining without negatively impacting the environment and New Zealand's clean, green reputation that draws tourists.
"I think it's worth pointing at that Pike River's mine (near Greymouth) is already partly on national park and has received all sorts of accolades for its environmental awareness and the way it manages its environmental footprint."
Kidd also says there is a misconception that profits made from mining in New Zealand go straight offshore
"What is often overlooked is that the Crown Minerals Act actually gives title to all oil and gas and gold in New Zealand to the Crown, so it's really the Crown's asset to manage
He says rent paid is also paid to the Crown by miners for accessing mineral resources. McDouall Stuart's model suggests that Tui and Kupe gas fields will each yield $1 billion for the Crown in royalties and tax payments.
Meanwhile, he says the government's proposed changes to the emissions trading scheme (ETS) announced on Monday will help create a more predictable business environment for the mining industry.
"Mining can be quite an intensive exercise, both in terms of
capital and labour, and often in terms of emissions as well, and
what it (the proposal) does do is afford greater certainty to the
industry about what its costs curve looks like over what is
commonly many decades of mining."
