Unpermitted quarrying of Crown-owned minerals under regulator’s spotlight

“In New Zealand, the Crown owns all in-land petroleum, gold and silver, and has rights to other minerals listed in the Crown Minerals Act 1991 (CMA). It also owns minerals located within the Crown’s estate, including those not specified in the CMA such as aggregate,” says Phil Latimer, National Manager Compliance.

“I think even the mining sector would be surprised to know that the Crown also owns about half of the industrial rocks and building stones in New Zealand – most commonly because they are in Crown-owned land.

“We have recently discovered a number of quarry operators that haven’t sought correct permissions from the Crown. These operators have failed to check for Crown mineral ownership on their property title or conduct a Land Mineral Status Report as part of their due diligence and have since discovered they have been unknowingly mining Crown-owned minerals.”

To mine Crown-owned minerals, a person or company requires a mining permit from NZP&M. This gives the operator rights to specified Crown-owned minerals within the area of the permit, subject to conditions and obligations such as paying royalties.

“In the examples we have seen to date, some operators have come forward voluntarily, accepted responsibility and have worked constructively with our Compliance team to resolve the situation. This process usually begins with the operator applying for a minerals mining permit,” says Mr Latimer.

“While this is a good outcome, we are reminding all quarry operators that checking the ownership status of the materials you are extracting should be an essential part of the planning phase of your project. This is important even when the land is privately owned.

“Determining mineral ownership in a land title or holding can be challenging - in many cases, it may be necessary to search back to the first transfer or sale of the land from the Crown to establish whether minerals continue to be held with the fee simple title, have been reserved by the Crown, or have been excluded because of subsequent transactions.

“We recommend sourcing a Land Mineral Status Report from a supplier approved by Land Information New Zealand for an accurate picture of ownership and to avoid possible enforcement action by NZP&M’s Compliance Team down the track.

“If you think you may be illegally mining Crown-owned minerals without a permit, you need to do your due diligence urgently. Contact us before we contact you.”

For more on minerals ownership see Mineral ownership and Land and Mineral Status (LMS) reports [PDF 303KB].