Min­ing per­mit fees rise slammed

Otago Daily Times - - Business & Money - SI­MON HART­LEY si­mon.hart­ley@odt.co.nz

A 70% RISE in the cost of per­mit fees is be­ing de­fended by Gov­ern­ment per­mit­ting agency New Zealand Petroleum & Min­er­als, which says ju­nior min­ing com­pa­nies should ‘‘raise suf­fi­cient cap­i­tal’’ to meet the new charges.

One Otago per­mit holder had its per­mit fees rocket 18­fold, from $3000 to more than $50,000, while an­other had to pro­duce a mine plan re­port, cost­ing more than $50,000, for the one­off doc­u­ment which added no value to its op­er­a­tion.

Many of the 220 del­e­gates at the New Zealand branch of the Aus­tralian In­sti­tute of Min­ing and Me­tal­lurgy an­nual con­fer­ence in Christchurch were scathing of the price in­creases, which hit ‘‘ju­nior’’ ex­plor­ers es­pe­cially hard.

‘‘Where are the ju­niors? They can’t af­ford to hold any ground,’’ was the gen­eral re­frain.

New Zealand Petroleum & Min­er­als (NZPM) act­ing na­tional man­ager for min­er­als Jackie Adams was con­tacted about the is­sue and said the per­mit fee costs were re­cov­ered from the in­dus­try and the fee struc­ture had not been re­viewed since 2006.

‘‘The fees weren’t cov­er­ing the ac­tual cost of ad­min­is­ter­ing per­mits and the changes last year are de­signed to bet­ter re­flect the ac­tual amount of work re­quired for each per­mit type,’’ Ms Adams said.

In most cases, the ap­pli­ca­tion and an­nual fees charged by NZPM made up only a very low per­cent­age of the to­tal prospect­ing, ex­plo­ration or min­ing ex­pen­di­ture over the to­tal life­span of a project, she said.

‘‘We do not con­sider the ac­tual dol­lar in­crease in fees to be pro­hib­i­tive.’’

She was asked to out­line the per­cent­age in­creases of each per­mit type, rang­ing from prospect­ing, ex­plo­ration and min­ing per­mits.

‘‘The weighted av­er­age fore­cast in­crease for all min­er­als per­mits was 71%, which was re­quired to en­sure a break­even cost re­cov­ery,’’ Ms Adams said.

Ex­plo­ration by ju­nior com­pa­nies around New Zealand is at an all­time low and although ex­plo­ration spend­ing is up, much of last year’s $44 mil­lion spend was in ex­ist­ing, brown­field, mines.

Ms Adams was asked if the fee rise was a dis­in­cen­tive to the ju­niors, mean­ing new ar­eas would not sub­se­quently be ex­plored.

‘‘Re­gard­ing new mar­ket en­trants, ju­niors, we ap­pre­ci­ate that the cap­i­tal mar­ket for rais­ing funds in the min­er­als in­dus­try can be chal­leng­ing when com­mod­ity prices drop sig­nif­i­cantly or are highly volatile.

‘‘But if new mar­ket en­trants raise suf­fi­cient cap­i­tal and ap­ply for an ap­pro­pri­ately sized per­mit, the fees are not pro­hib­i­tive,’’ she said.

Pre­vi­ously, the fees for min­er­als prospect­ing per­mits, in par­tic­u­lar, were far be­low the cost of ad­min­is­ter­ing them and be­cause the fees had been ‘‘very low’’, that en­cour­aged ap­pli­cants to take out larger per­mits than nec­es­sary, Ms Adams said.

New Age Ex­plo­ration made two par­tial sur­ren­ders of ap­pli­ca­tions in July, both of which were min­er­als prospect­ing per­mits, she said.

New Age was un­der­tak­ing a low im­pact $150,000 ground study near Lawrence and Roxburgh to see if a schist belt that ex­tended south 60km from Oceana Gold’s suc­cess­ful Macraes mine also hosted gold.

It was un­der­stood, but not con­firmed, that in the face of fee rises New Age re­lin­quished about 75% of its land mass to off­set costs.

Ms Adams said prospect­ing per­mits such as New Age’s, were de­signed to iden­tify ex­plo­ration tar­gets, so were not long­term per­mits and were or­di­nar­ily only granted for two years.

Gov­ern­ment’s aero­mag­netic sur­veys were help­ing un­der­stand min­eral po­ten­tial in the lower and up­per South Is­land, in­clud­ing Otago, and that data was be­ing made avail­able to min­er­als com­pa­nies, Ms Adams said.

From 2019, the per­mit fees would be re­viewed ev­ery three years.

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