Shane Jones entertains critical minerals heavyweights at Parliament, ponders minimum prices
Resources Minister Shane Jones and Assistant Secretary of State for East Asian and Pacific Affairs Michael G. DeSombre.
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”.
Assistant Secretary of State for East Asian and Pacific Affairs Michael DeSombre flew to Wellington for the meeting. DeSombre later met with Foreign Minister Winston Peters. New Zealand and the United States have been discussing a critical minerals deal, although there have been conflicting reports as to how far advanced any such deal may be.
The High Commissioner from Australia, Daniel Sloper, the Ambassador from Japan, Makoto Osawa, and the first secretary from Korea, Kang Wook Jeon, were also present.
Duncan Hardie of resources firm Hardie Pacific represented his firm and New Zealand at a critical minerals summit held by the Trump Administration in Washington DC.
Hardie said the Americans made clear there would be capital available for the “right projects”.
The United States has made plain that it wants to secure supply chains of critical minerals.
China is currently a dominant power in the resources sector and its dominance risks cutting the United States off from supplies of minerals, although Hardie said the tone at the conference was “measured” regarding China.
However, other parts of the Washington DC meeting had a clear geopolitical bent.
“The West does not have time to be slow,” he said.
“The overall message is speed over caution.” There was enthusiasm for special mining zones, which are areas designated to facilitate, manage and regulate significant mining activities.
Hardie said the conference made clear that “companies aligned with the US get access to capital, technology, market security”, potentially including price security.
He said the US wanted to move quickly.
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”.
However, he added “there is a growing awareness that national security and resilience needs to be measured against economic rationalism”.