Resources Minister Shane Jones invited leaders from the minerals sector and diplomats, including a high-ranking official from the US State Department, for a critical minerals roundtable at Parliament today.
Jones spoke frankly with attendees about the US’ keenness to develop minerals supply chains and about the Government pondering minimum prices for certain resources in order to establish viable operations for their extraction.
During the part of the meeting open to media, Jones said he wanted to create a “narrative” that critical minerals were a “legitimate part of the New Zealand economy”.
Critical minerals are, well critical. We should absolutely be mining them – both for our own use, and to export. Any anyone against that should hand in their cellphone, computer and electric car.
A major concern of the meeting was price. Resources prices can fluctuate wildly. Resource powers, including China, have been accused of dumping resources on the market to collapse prices, making those states’ competitors unviable. This allows those states and firms to retain market dominance for certain minerals.
Jones discussed the possibility of establishing a price floor to combat this in a discussion with Sloper, the Australian High Commissioner.
“It’s been reported to me there are firms in Australia and at various times in New Zealand who do shutter because there’s no point in them operating if the price for a certain key mineral collapses,” he said.
But Jones said there were challenges in establishing a minimum price for resource exports because it potentially violated provisions in New Zealand’s free trade agreements, which generally prevented the Government from intervening in pricing.
‘We’ve struggled with how do we commit to a floor price without violating the provisions of a host of trade agreements that successive New Zealand governments have signed up to,” Jones said.
He added it was “fair to say there’s been an allergic reaction from some of the senior politicians to the idea of a floor price”.
As there should be. We got rid of minimum prices for farming in the 1980s, so let’s not bring them in for mining.
David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders
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