Shane Jones wants mining to pay for regional New Zealand. He has the rhetoric, the fast-track legislation, and a $3 billion mining export target by 2035 to back it up. What he does not have is a royalty system that actually captures the value he keeps promising.
The Bendigo-Ophir gold mine in Central Otago’s Dunstan Range is the test case. Santana Minerals says it is the largest single gold deposit discovered in New Zealand in more than four decades, projecting $360 million per year in GDP and $1.8 billion in taxes and royalties over its life. The fast-track panel’s decision is due by October 29, 2026, just over a week before election day.
Those headline numbers are genuinely significant. But they rest on an assumption that New Zealand will actually collect the revenue this time. The track record says otherwise.
A 1.3% take on a non-renewable resource
In December 2024, NZ Petroleum and Minerals published its 2023 mining industry statistics. Gold production totalled 220,000 ounces. Total gold royalties paid to the Crown were $9.23 million.
At the 2023 average gold price, those 220,000 ounces represented roughly $700 million in production value. The Crown’s share: about 1.3%.
MBIE’s Budget 2024 resources briefing confirmed the broader picture. In 2022-23, total minerals royalties contributed just $21.6 million to Crown revenue against $1.03 billion in mineral export value. The gap is structural, not accidental. Grandfathered royalty rates on long-standing permits mean many operations pay roughly half the rate applying to genuinely new leases.
OceanaGold’s Macraes mine, New Zealand’s largest gold operation, illustrates the problem. A February 2024 economic assessment found the project contributed $343 million to exports and $237 million to GDP in 2021. The royalty return that year was $4.1 million. On the jobs front, Macraes retains 177 positions in Otago with $21.3 million in annual wages. Those are real benefits. But the fiscal return to the country that owns the resource is negligible.
Jones knows the price is wrong
The minister is not blind to this. In August 2024, Jones told Newsroom that “there are strong criticisms coming my way that the investors aren’t paying their fair share, and society needs a return”. He flagged plans to direct a percentage of royalties to regions where mining occurs, with Queenstown and Central Otago among the frontrunners.
But the maths only works if the royalties are worth sharing. Directing a percentage of $9.23 million to regions does not transform local economies. And Jones has simultaneously sought Crown Law advice confirming that royalty payments remain the preserve of central government, warning against “local extortion” in negotiations.
His rhetoric on environmental trade-offs has been less nuanced. In April 2026, Jones described himself as a “tenacious advocate for the minerals sector” and dismissed conservation concerns: “I’m not going to let juvenile lizards frustrate us at a time of economic challenge.”
The physical reality beneath the projections
Bendigo-Ophir is not a modest operation. Santana’s documents describe four open pits, the largest being 1km long, 800m wide and 200m deep, along with a processing plant stretching a kilometre and a tailings storage facility. The Department of Conservation submitted that the “scale of impacts on species is very high, significant and unprecedented”, with an estimated 650,000 lizard deaths.
Meanwhile, nearly a million hectares across Otago and 100,000 in Southland are now pegged by gold mining companies, driven by record gold prices. Bendigo-Ophir is the vanguard, not the whole army.
Speed without value is not a win for business
The pro-business case for fast-track consenting is straightforward: reduce uncertainty, shorten timelines, attract capital. That logic is sound. But fast-tracking a project through a royalty framework that captures 1.3% of production value is not pro-business in any meaningful national sense. It is pro-one-business.
A November 2024 Spinoff analysis argued that “mining will not increase economic welfare if done in the wrong place, or in the wrong way, or without a proper legal and regulatory framework.” That is not an anti-mining position. It is a pro-competence one.
New Zealand has gold in the ground and a government willing to dig it up. What it lacks is the fiscal architecture to ensure the country gets paid. Jones has until October to show that his regional deals and royalty reforms amount to more than press releases. If the diggers arrive before the plumbing is fixed, the Bendigo-Ophir mine will generate billions in value, and the Crown will pocket loose change.
Sources
- The Spinoff: The debate over Central Otago’s enormous, controversial new gold mine, explained (2026-04-23)
- Newsroom: The billion-dollar gold mine under Central Otago (2026-03-04)
- Newsroom: Mining royalties to finance housing in first regional deals (2024-08-23)
- NZPAM: New Zealand Petroleum and Minerals releases Mining Industry Statistics for 2023 (2024-12-02)
- ORC: Assessment of the Economic Effects of OceanaGold’s Proposed Extensions to its Open Pit Mining Operations at the Macraes Gold Project (2024-02-09)
- The Spinoff: What can we really expect from an expanded mining industry? (2024-11-18)