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Permits
What are Crown-owned minerals?
What kind of permits are there?
How do you get awarded a mining permit?
What are Crown-owned minerals?
Crown-owned minerals include all gold, silver and petroleum (oil and gas) in New Zealand (being onshore and offshore to 12 nautical miles – called the territorial sea), and about half of the in-ground coal, metallic and non-metallic minerals, industrial rocks and building stones. These resources are referred to as the 'Crown mineral estate'.
What are not Crown-owned minerals?
Minerals that are not Crown-owned are owned privately. Privately owned minerals are, in most cases, owned by the land owner.
Determining mineral ownership in any particular title or land holding is often not an easy task. It will, in many cases, be necessary to search back to the first alienation of the land from the Crown to establish whether:
- the minerals continue to be held with the fee simple title, or
- had been reserved by the Crown, or
- were excluded as a result of any subsequent transaction such as a transfer or a Public Works Act acquisition.
Land Information New Zealand (LINZ) is the government agency to approach for information on mineral ownership as it has links to professionals that are skilled in researching and preparing mineral status reports.
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What kind of permits are there?
There are three types of permits that can be applied for to prospect, explore, or mine for Crown-owned minerals.
Prospecting permits
- Prospecting permit holders may carry out what is usually low impact work to search in their permit area.
- Low impact work includes of geological or geophysical data via seismic, gravity or magnetic surveys.
- Prospecting permits are given for up to one year initially.
- Oil and gas operators seldom apply for prospecting permits as low impact activity can be incorporated into their exploration work programme, and prospecting permits do not give subsequent rights to the resource.
Exploration permits
- Exploration permit holders may carry out a number of different activities to explore areas in greater detail and to determine whether it is economically viable to commercially develop the resource. These activities will usually include desktop, and 2D/3D seismic surveys. Exploration permits also include a right to drill one or more exploratory wells (for which environmental consents are required).
- Exploration permits are granted for up to five years initially. The permit may be extended beyond five years over a maximum of 50 percent of the original area, to a maximum of 10 years, to assess the oil and gas potential of an area. An appraisal extension of up to four years is possible.
Mining permits
- A mining permit allows a permit holder to undertake mining operations relevant to the extraction, separation, treatment and processing of oil and gas for a period up to 40 years.
- They are awarded subsequent to an exploration permit, and following an extensive appraisal programme and preparation of a work programme for development and mining of a discovery.
- Operations may use different methods and equipment depending on the resource under production and its physical location. The mining of oil and gas can occur onshore or offshore. Production processes will be subject to environmental consent processes.
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What is a Block Offer?
This is a method of allocating oil and gas exploration permits where interested parties can bid competitively on the exploration or production rights to 'blocks' of acreage offered by the government. Prior to designating blocks, the government engages with iwi, industry and other stakeholders.
- Blocks of land which are likely to contain petroleum resources are advertised. The objective is to advertise the block offer as widely as possible to parties who may be interested in exploration opportunities in New Zealand.
- Work programme bids from interested people or companies are received and evaluated. Details on how we evaluate bids can be found in the Minerals Programme for Petroleum 2005 [975 kB PDF].
- Permits for petroleum activities are awarded to those people or companies who are most likely to effectively and efficiently prospect, explore and develop the petroleum resource, and whose operations will result in increased knowledge of New Zealand's petroleum resource and potential.
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How do explorers get awarded a mining permit?
Following the execution of an exploration permit, and after fully appraising the resource potential in the area, the permit holder will decide whether to invest in extraction or not.
If the resource is commercially viable, the permit holder could apply for a petroleum mining permit. It is a subsequent right of the exploration permit that they would not be required to participate in a competitive process. Such an approach takes into account the significant investment an explorer has already made in assessing the potential of an area.
The award of a petroleum (oil and gas) mining permit is subject to a rigorous evaluation process that considers, but is not limited to:
- whether a petroleum field has been identified and delineated that can be effectively mined within technical and economic constraints.
- whether an acceptable work programme is proposed that is in accordance with good exploration and mining practice and accordingly will enable sound management of the petroleum field and avoidance of wastage of petroleum.
- whether the proposed mining permit area and duration are appropriate to the delineated resource identified.
- whether the applicant has the technical and financial ability to give good effect to the proposed development plan.
An application for a mining permit can be turned down on any factors that could contribute to a view that the applicant may not give full effect to the permit.
