8 Nov 2011

Mining industry to expand as prices for its products rise

11:38 am on 8 November 2011

The mining industry is poised for further expansion as a result of high prices for its products.

Oceana Gold has won permission to extend its gold mine at Macraes Flat, 80 kilometres north of Dunedin.

The company, which employs 550 people at Macraes Flat, faced the expiry of some resource consents next year but has now won approval to keep going until 2020.

The extension follows a rise in the price of gold by 180% in five years.

Oceana Gold chief operating officer Mark Cadzow says rising gold prices have been helpful.

Mr Cadzow says the mining industry has pushed forward over the last ten to 15 years.

"It's a good business to be in at the moment. It's certainly utilising the natural wealth of New Zealand for all New Zealanders," he says.

Similar incentives drove Newmont Gold to announce extensions to its mines at Waihi two months ago.

New Zealand produces about 13 tonnes of gold each year, the highest production level since 1915.

The industry is worth more than $660 million dollars.

The push in the gold industry is matched in coal, with state miner Solid Energy seeking to develop an area 20 kilometres northeast of Greymouth which was mined for 70 years but shut down 25 years ago.

Value to economy

Pro-mining lobby group Straterra says the industry could triple or quadruple the contribution it makes to the economy.

It says its last study, commissioned three years ago, showed mining contributes $2.15 billion to GDP.

A spokesperson Bernie Napp says that could be much more if potential new lignite, iron sand and gold mines get the go ahead.

But he says the mines would have to prove they were workable, environmental effects would have to be managed and overseas markets developed before that happened.