Mining royalties labelled a ‘disgrace’ as communities struggle

Saturday, 1 November 2025

MPs Labour's Damien O'Connor and National's Maureen Pugh at the West Coast Minerals Forum in Runanga.

The royalties from the mining industry to the Government have been labelled a “disgrace” by Labour list MP Damien O’Connor.

He made the statements at the West Coast Minerals Forum, an annual gathering for the mining industry held in Runanga on the West Coast on Thursday.

The Forum also heard from mining companies, with one describing “frustration and delays” around securing a new mining permit.

“I'd hate to think what the total turnover of your combined companies is or was in the last year. It's been a pretty good year. The gold price is pretty good. The fact that only $14 million came back in royalties is a disgrace,” he said.

Attendees at the 2025 West Coast Minerals Forum, an annual event for the mining industry created by Minerals West Coast.

West Coast mayors have been lobbying the Government to return some mining royalties to the region as part of the Regional Deals.

Mining royalty percentages vary, but for complex, high-risk, and high-return projects, the rate is the higher of 2% of net sales revenue or 10% of accounting profits, of more than $5m for coal and $2m for gold.

Minerals West Coast manager Patrick Phelps said he supported the Government giving royalties back to the communities where mining occurred, but increasing the royalty rates would be a disincentive to investment and endanger the economic viability of some mines.

He said mining royalties had been reviewed and increased under both Labour and National-led Governments and the last Labour Government had not changed royalty rates.

O’Connor said the value of the coal mined from the West Coast last year was about $12b, but the total royalties from coal mining to the Government was $3.2m.

“These are Crown-owned, publicly-owned minerals, and you take a chance and invest to exploit those and utilise them, and good on you …The point is our royalty regime is very, very low and compared to many other countries, almost insulting,” he said.

He said some well-paid miners were keeping the region going, but other ratepayers were “screwed” and West Coasters needed to foot a $100m bill for water infrastructure under the Local Water Done Well reform.

Santana Minerals chief executive Damian Spring said changes to Government policy had helped attract investment in the mining industry.

“If [mining] was that good [for the community], every one of us on the West Coast would be multi-millionaires,” he said.

“As a region that has been the champion of mining, we've been the staunchest advocates, and we've had all of that money go through our hands, or out of our hands, and we're still struggling.”

“We can't drink the water at times, there's shit going into the rivers, and we have some infrastructural challenges that we have to admit to as a region.”

West Coast Tasman MP Maureen Pugh (National) said the mining industry could rely on National and its coalition partners to fully support the sector.

“In my personal view, it has a great future because nothing is stemming the demand. All the people on the planet are continually demanding more and more resources,” she said.

Santana chief executive Damian Spring told the forum the Central Otago Bendigo-Ophir project, set to be processed under Fast Track legislation, would increase taxes and royalties from the mining industry from $1.8b to $2.5b.

He said the current Government’s plans to replace the RMA Act and its Fast Track legislation had “made the stock market and the investment community sit up and take notice”. The Fast Track legislation had allowed the fastest consenting time frames in the Western world, he said.

Terra Firma Mining managing director Lincoln Smith spoke about his frustrations at not being able to reopen the Spring Creek underground coal mine near Greymouth.

After announcing “the most significant single gold discovery in New Zealand” in 2024, the company needed to raise $302m to get the project completed, and had $100m so far, of which about 3% had come from 15,000 Sharesies investors.

“The big banks, they've been banging down our door to be part of this. It's the significant change in the government policy, they can see the economics of this project is highly attractive.”

Terra Firma Mining managing director Lincoln Smith said he had been trying to reopen the previously state-owned Spring Creek underground coal mine near Greymouth but NZ Petroleum and Minerals declined to issue the company a mining permit earlier this year.

“I've also experienced a whole lot of frustration and delays. Six years ago we imagined that reopening a mothball government-owned mine would be a relatively straightforward exercise and it'd be welcomed,” he said.

Last week, the company was granted an exploration permit for the mine and had an “aggressive plan” to complete exploration work and reapply for a mining permit by March next year.

Endura Mining vice-president of corporate development Bryan O’Hara said it had recently raised AU$150m to develop the Snowy River gold mine near Reefton.

“Our first priority was to try and attract New Zealand investment. We spoke to a lot of high net worth and a lot of institutional money in Auckland and we actually ended up with getting zero investment from New Zealand, which is disappointing.”

It had received a $15m loan from a previous Government’s provincial growth fund which it had paid back and Development West Coast had also invested $3m for an equity share in the project.