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Mining and underground resources

by  Simon Nathan

Mining underground resources is a feature of modern society. Although gold is the most glamorous commodity, in New Zealand the annual production of aggregate and coal is more valuable.

The mining industry

Contribution of mining to the economy

All modern communities use mineral resources extracted from beneath the ground – New Zealand examples include:

  • clay for crockery, bricks and tiles
  • ironsands for the manufacture of steel
  • oil, gas and coal to provide heat and energy sources for electricity generation
  • limestone for agricultural fertiliser.

New Zealand is self-sufficient in many mineral resources, and exports substantial amounts of gold, silver, ironsands and high-grade coal. The mining industry contributes to several major sectors of the economy, including agriculture, energy, construction, transport and manufacturing.

In 2004 the value of production from mining underground resources (excluding oil and gas) was $1.142 billion, just under 1% of gross domestic product. This had grown over 45% since 1999, buoyed by strong economic conditions and growth in mineral exports.

What is a mineral?

The meaning of the term ‘mineral’ varies according to the context. When applied to mining, it is used for natural substances that are extracted from the earth. This includes material as varied as oil, coal, aggregate, limestone and iron sand.

Imported minerals

Pastoral agriculture is dependent on the availability of superphosphate. Only limited amounts of phosphate and sulphur are available in New Zealand, so these must be imported and processed to make superphosphate. The other main mineral imports are copper, zinc, gypsum, lead, magnesium, manganese, nickel and titanium oxide.

Although some light oil is produced in Taranaki, mainly from the Kāpuni and Māui gas fields, this is not sufficient for national energy needs, especially for transport fuel. Until 2022, imported oil was processed at the Marsden Point refinery (in Northland) to produce petroleum and a range of other oil products.

Underground to opencast

The mention of mining conjures up visions of dark underground mines, but the nature of mining has changed dramatically since the mid-20th century. There is now little underground mining in New Zealand, and most mines are opencast pits that are excavated with explosives and earth-moving machinery. In practical terms, there is no distinction between a quarry and an opencast mine. The labour-intensive aspects of mining have largely disappeared. The workforce is smaller, and there are few unskilled jobs.

Mining traditionally had a bad reputation because of the high accident rate. Safety standards are dramatically higher than in the past, and the number of deaths and accidents has fallen to low levels. There is no longer public tolerance of the high level of accidents traditionally associated with mining and quarrying.

A clean pair of pyjamas

It was a tradition in coalmining settlements that a miner’s wife kept aside a clean pair of pyjamas that could be used to lay out her husband or sons if they were killed in the mine. Accidents were accepted as part of the natural order for those who worked underground.

Environmental issues

Mining, like other land uses, can cause significant environmental problems. Some past mining practices were highly destructive. For example, dredging in Otago and on the West Coast destroyed large areas of river flats, leaving behind unsightly trails of tailings. Protests and community concerns about the effects of mining have gradually resulted in higher environmental standards. All mining proposals are now evaluated in terms of the Resource Management Act 1991.

Since the 1980s, mining permits have included requirements to undertake land rehabilitation after mining has been completed. At its best, land that has been mined and rehabilitated is not easily distinguished from land that has never been mined. Agricultural scientists and engineers have developed considerable expertise in land rehabilitation.


Recycling of a range of materials helps minimise the costs and effects of mining as well as the need to import products. For example, a substantial amount of recycled iron and steel is used as feedstock in the New Zealand Steel works at Glenbrook. Motor oil can be cleaned and reused. Metal products such as copper wire and aluminium cans, already the products of smelting metal ores, can be readily reused.

History of mining

Māori use of stone

Although Māori did not use metals, stone was widely used for tools, weapons and ornaments. Suitable local rocks were used in different areas, but some types of stone were widely traded or taken as spoils of war:

  • pounamu (nephrite and bowenite), found mainly on the western side of the South Island near Hokitika
  • obsidian – the best-quality material coming from Tūhua (Mayor Island)
  • adzite (also called baked argillite) from D’Urville Island and other localities in east Nelson.

Archaeological evidence shows that these rocks were widely distributed around New Zealand by 1400 AD, within 150 years of Māori settlement. Former quarries have been identified where blocks of adzite and obsidian were excavated and fragments trimmed to a convenient size.

The search for minerals

New Zealand was colonised primarily for agricultural land rather than for its mineral wealth. As an increasing number of European settlers arrived after 1840, they started to search for metals (particularly gold) and coal. Gold rushes in the 1860s led to the migration of men to hitherto remote areas in Otago, the West Coast, and Coromandel.

In 1870 when James Hector, the director of the New Zealand Geological Survey, described the minerals and mining industry in New Zealand, gold, silver, copper, lead and iron had all been discovered, and small-scale mining was under way. Occurrences of chromium, zinc, antimony and other minerals were known. All the main goldfields and coalfields had been discovered, and coal was being mined in many areas around the country.

In addition to metallic minerals, kauri gum or resin lying on the ground in Northland was collected, and later buried gum was mined.

Development of a mining industry

Most of the gold won in the 1860s was found in rich, surface gravels, and was worked by individuals or small groups using simple equipment. The richer and most accessible ground was quickly exhausted, and larger-scale mining started in the 1870s. Alluvial gold was sluiced and dredged, and hard-rock gold and coal were worked in underground mines. This required substantial capital, and many speculative mining companies were set up, both in New Zealand and overseas. High returns were obtained from the more successful mines.

The merits of gum digging

‘Gum digging has always been a standing resource for the industrious unemployed, and has enabled Auckland in times past to tide over periods of commercial depression with comparatively little difficulty. It has also been of vast benefit to hundreds of settlers with small capital.’ 1

Production of gold varied, but peaked about 1905 and then gradually declined. In contrast, coal production grew steadily to 1 million tonnes in 1900, doubling to 2 million tonnes in 1910, and stayed around that level for the next 70 years. A significant part of the mining revenue before the First World War came from kauri gum, but this declined as the resource became worked out.

Changes after 1945

The total value of mining output (excluding oil and gas) increased steadily after the Second World War, and exceeded $1 billion for the first time in 2004. The increase was due to changes in mining technology and in the products produced, and to increases in export markets.

  • Non-metallic minerals – industrial development within New Zealand since 1950 has led to construction projects needing large amounts of non-metallics, especially aggregate.
  • Iron – large reserves of black ironsands on the west coast of the North Island have been known about for 150 years, but it was not profitable to smelt the sand to produce iron and steel until the 1960s. Now New Zealand Steel produces iron and steel for domestic use and for export.
  • Oil and gas – following the discovery of natural gas at Kāpuni in 1959, the offshore Māui gas field was found in 1969. Since then, there has been substantial exploration in the Taranaki region, with the discovery of a number of smaller oilfields and gas fields, and exploration continues.
  • Gold – because the world price of gold was fixed, production gradually declined in the middle of the 20th century. Once the gold price was deregulated in the early 1970s, there was a marked increase in exploration and mining. In 2005 most production came from two large opencast mines at Waihī (Coromandel) and Macraes (Otago), with minor production from alluvial mining on the West Coast and in Otago using modern technology.
  • Coal – production fluctuated between 2 and 3 million tonnes for many years. It increased after 1990 with the development of an export market for bituminous coal and passed 5 million tonnes in 2004.
  1. F. Reed, Catalogue and description of exhibits of the Mines Department at the Panama Pacific Universal Exposition (San Francisco 1915). Wellington: Government Printer, 1914, p. 19. › Back

Metals known but not mined

Although James Hector, the first director of the New Zealand Geological Survey, gave an impressive list of metal ores that had been discovered by 1870 in New Zealand, only three metals were successfully mined in 2005 – gold, silver and iron. Some of the known metal occurrences are too small to be mined, while other material is cheaper to import.


The main aluminium ore is bauxite, a mixture of aluminium-rich clay minerals, usually formed by intense tropical weathering. Small amounts of bauxite are known near Kerikeri in Northland, but have never been mined.

New Zealand annually produces about 250,000 tonnes of aluminium at the Tīwai Point smelter in Southland from bauxite imported from Weipa in Northern Queensland, Australia. It is more economical to process the ore in New Zealand than Australia because of the availability of electricity from the Manapōuri hydroelectric scheme. However, the smelter is scheduled to close in 2024.


The main chromium mineral is chromite, which occurs as lenses and pods in ultramafic rocks such as dunite and serpentine. About 5,000 tonnes were mined in the Dun Mountain area near Nelson between 1858 and 1866, but the amount present is very small.


Compounds of copper are found at many localities, often identified by the distinctive green-blue staining of malachite (copper carbonate). New Zealand’s first underground mine opened on Kawau Island in the 1840s, from which a total of 2,500 tonnes was produced. Although other small copper mines have been opened in Northland, near Woodville and at Dun Mountain, only small amounts of copper have been produced.

A little goes a long way

As an apprentice geologist in the 1930s, Harold Wellman spent a fortnight mapping and sampling an area near Otama in Southland where copper had been reported. His boss, Eric Macpherson, quickly realised that only a tiny amount of copper was present, telling Wellman that: ‘A pennyworth of copper will stain a mountainside.’ 1


The mineral cinnabar (mercury sulfide, HgS) occurs in rocks associated with extinct and active hot springs in Northland, especially around Puhipuhi and Ngāwhā. A total of 88 tonnes of mercury was obtained from workings in Northland between 1890 and 1945, but subsequent prospecting and drilling failed to find deposits that could be economically mined.


Cassiterite (tin oxide, SnO2), the main tin mineral, is found in some granites and some stream gravels. It was discovered in the remote Tin Range in Stewart Island in the 19th century, and about a tonne of alluvial tin was mined between 1888 and 1894.


The main titanium-rich mineral found in New Zealand is ilmenite (iron titanium oxide, FeTiO3), which occurs as extensive black sand deposits along the West Coast of the South Island. The ilmenite grains have been derived from erosion of schist in the Southern Alps and concentrated by wave action on the beaches. Although large resources of ilmenite are known near Barrytown and Westport, the cost of extracting the titanium is currently uneconomic.

Black sands

Titanium-bearing black sand is found along the western side of New Zealand, but the sand minerals vary. South Island black sand is made of ilmenite, whereas that in the North Island is titanomagnetite.


Scheelite (CaWO3), the main ore of tungsten, has been found in quartz veins in a number of localities, often in association with gold. It has the unusual property of fluorescing in ultraviolet light, which is used to identify it when prospecting. Small mines have been worked at Macraes and Glenorchy (Otago) and Wakamarina (Marlborough), but the recovery of tungsten is uneconomic at current prices.

A worldwide shortage of tungsten during the Second World War led the government to take over two of the scheelite mines in Glenorchy. Once the price dropped in 1944–45 the mines reverted to private ownership.


There was great excitement when uranium was discovered in the lower Buller Gorge in 1955. Despite considerable prospecting, only small, low-grade deposits have been found, and it has never been mined.

    • Simon Nathan, Harold Wellman: a man who moved New Zealand. Wellington: Victoria University Press, 2005, pp. 42–43. › Back

Mining regulation and education

Ownership of minerals

The New Zealand government owns all naturally occurring petroleum (including both oil and gas), radioactive minerals, and gold and silver in New Zealand. Any individual or company wanting to prospect, explore or mine these substances must obtain a permit under the Crown Minerals Act 1991 and pay the specified fees and royalties. The same rules apply to coal and all other metallic and non-metallic minerals and aggregates on Crown-owned land.

Mining of minerals and aggregates other than petroleum, radioactive minerals and gold and silver on privately owned land requires the consent of the landowner together with resource consents from local authorities granted under provisions of the Resource Management Act.

Gold without mining

At Massey University, geologist Chris Anderson discovered a novel method of collecting gold – from plants grown on old mining lands with a high gold content. The chemically treated crops soak up the gold and store it in their roots and leaves. Experiments are continuing to see if this method can be developed commercially. If successful it may raise some interesting legal questions about who owns biologically accumulated gold.

Environmental and safety regulation

The Resource Management Act 1991 and its amendments is the major piece of environmental legislation that controls the use of land. It has a comprehensive framework for the development and protection of almost all physical and natural features. Mineral extraction is excluded from the sustainability provision of the act, but as mining invariably involves the use and modification of land, all other parts apply.

Territorial authorities (district and regional councils) are responsible for administering the Resource Management Act. Most authorities have incorporated local rules and guidelines for mineral extraction in their district plans.

Workplace safety is covered by the Health and Safety in Employment Act 1992. Specific rules for mining are covered in HSE (Mining Administration) Regulations 1996.

Workplace training

Because of the skills required in different aspects of mining as well as the hazards of working with explosives and heavy machinery, qualifications have long been required to undertake many aspects of mineral extraction. In the 19th century the government set up a network of schools of mines that provided practical and theoretical training. The Otago School of Mines, at the University of Otago, produced graduates in mining engineering. These schools have all now closed.

In the 2000s the Extractive Industries Training Organisation (EXITO) provides a range of qualifications covering both underground and opencast mining, mineral and petrochemical processing, use of explosives and electrical engineering.

No university-level education in mining or mining engineering is available in New Zealand, and those who need graduate qualifications must study overseas.

External links and sources

More suggestions and sources

How to cite this page: Simon Nathan, 'Mining and underground resources', Te Ara - the Encyclopedia of New Zealand, (accessed 21 July 2024)

Story by Simon Nathan, published 12 June 2006