West Coast New Zealand

Mining on the West Coast consists mostly of coal and gold production.  Both gold and coal mining have benefited from higher international commodity prices in recent years.

Coal production

The West Coast produced 52 percent of New Zealand’s coal in 2006, a small increase from 2005.  Figure 4.5 shows the West Coast’s total coal production between 1998 and 2006 and its share of the New Zealand total.

Figure 4.5 West Coast coal production

The total coal production from the West Coast in 2006 was 3 million tonnes, a 13 percent increase on the previous year.  Coal production has steadily increased from 1.44 million tonnes in 1998.

Coal production on the West Coast is expected to grow even more as the Pike River Coal construction project nears completion.  The mine is expected to produce nearly 18 million tonnes of low ash coking coal once production begins in July 2008.  Production is projected to increase rapidly in the first quarter of 2009, once construction is completed.  Production is forecast to reach 200,000 tonnes in the June 2009 year (adding an extra 6.0 percent to current West Coast production), and one million tonnes in the June 2010 year (adding one-third to current production).

Pike River Coal Limited has signed an 18-year agreement with Solid Energy to transport up to 1.3 million tonnes of product a year to Lyttleton for export on the Midland rail line.  This is likely to have a big impact on rail infrastructure on the West Coast and in Canterbury, as Solid Energy upgrades the line and its rolling stock, builds an additional coal load out facility on the West Coast, and increases capacity at Lyttleton.

This improvement in the Midland line and increased capacity at Lyttleton may provide further opportunities for rail use by other industries such as dairy or logging.

Gold production

Statistics from Crown Minerals suggest that the West Coast’s role in New Zealand’s gold production rose substantially in 2006, as Figure 4.6 points out.

Figure 4.6 West Coast gold production

Production appears to have bottomed out in 2005, with a surge in production in 2006. As of 2006, the West Coast accounted for around 4.3 percent of all New Zealand gold production.  In 2006, around 454 kilograms of gold were produced in the region.

Oceana Gold began production at a new open-pit mine at Reefton in mid-2007.  The result will be an increase in the region’s share of total New Zealand gold production from 2007 onwards, with an even more impressive surge in 2008, the first full year of production.

Source: BERL 2007