Indmin | 12 November 2015
New Zealand minerals sector could benefit from planned EU trade deal
by Keith Nuthall and Wendy Mill
The free trade agreement currently in discussion could benefit a number of mineral producers in New Zealand including Imerys Ceramics’ New Zealand division and Dominion Salt, for which Europe has never been a natural market owing to the high percentage of export costs accounted for by freight.
New Zealand’s industrial minerals sector could benefit from a new planned trade agreement with the European Union (EU) with preparatory talks for the deal now under way.
EU Trade Commissioner, Cecilia Malmstrom, and New Zealand’s Trade Minister, Tim Groser, met in Brussels last week to explore a future bilateral free trade agreement.
A deal is expected to go beyond the classic tariff reduction agreement and also address regulatory harmonisation and trade facilitation issues. Given the potential clash between EU and New Zealand agricultural interests, talks could be protracted.
Both sides said they wanted to make progress however: "New Zealand is a close partner of Europe that shares our values and views. I am committed to strengthening this partnership by working towards an ambitious trade agreement," said Malmstrom.
A trade deal could boost the New Zealand industrial minerals sector, the development of which "is constrained by the population’s concerns about the environmental issues related to mining, the ecological sensitivity of the country, and New Zealand’s location far from major industrial markets", according to a US Geological Survey (USGS) report.
According to the UGSG, New Zealand has reserves of antimony, bauxite, bentonite, beryllium, clay, diatomite, dolomite, perlite, phosphate rock, pumice, rare earths, salt, silica, sulphur, and zeolites.
In terms of production in 2013, the latest USGS figures, New Zealand produced 762 tonnes bentonite (2,263 tonnes in 2012); 62,288 tonnes clay for bricks and tiles; 13,066 tonnes kaolin; 4 tonnes diatomaceous earth; 5,542 tonnes dolomite; 3,598 tonnes perlite (in 2012); 93,865 tonnes pumice; 100,000 tonnes salt; 101,702 tonnes silica and glass sand; and 155 tonnes zeolites.
New Zealand exported $6.5m worth of kaolin in 2014 and $5.7m worth in 2013, according to international trade data. It sold overseas $11.5m worth of salt in 2014 and $10.3m in 2013. The country also exported $375,907 worth of perlite in 2014. As for pumice, New Zealand exported $88,419 worth in 2014. $79,491 worth of silica sand in was meanwhile sold in 2014, and $104,060 worth sold in 2013.
Bernie Napp, policy manager for Straterra, the collective voice for the New Zealand minerals and mining sector, stressed that New Zealand is currently "more of a niche exporter of these goods". While current duties for New Zealand mineral exports were low, he said an agreement could have a positive impact on investment guarantees.
Salt exports are one niche where an EU trade deal could help. Dominion Salt Ltd, based near Blenheim, South Island, exports gourmet food salts to Europe, but not the 50,000 tonnes of pharmaceutical and high grade food manufacturing salts that it currently sells overseas.
"Given that freight makes up 50% of our export costs, Europe has never been a natural home for our products. We are focused on regions south of the equator such as South-East Asia, South America and the developing world," said Shane Dufaur, Dominion Salt’s CEO.
Imerys Tableware New Zealand Ltd, based northwest of Whangarei, quarries and processes halloysite. Part of the Paris-based Imerys group, a world leader in mineral-based specialities for industry, the company could also benefit. Its products are exported globally for ceramics applications and New Zealand is the only location where Imerys works this mineral. Currently, the EU represents only a small percentage of sales for Imerys Ceramics’ New Zealand division.
The Crown Minerals Group, under New Zealand’s ministry of economic development, is responsible for managing all state-owned minerals in the country, which includes all minerals on or under crown-owned land.