Source: Radio New Zealand
Resources Minister Shane Jones. RNZ / Samuel Rillstone
The government is pushing on with negotiating a critical minerals deal with the United States, but says risks must be “carefully considered”.
A just-released Cabinet paper revealed Resources Minister Shane Jones recommended continuing work drafting a bilateral agreement.
It was revealed in February that New Zealand was in discussions with the US about the supply of rare and critical minerals, as Donald Trump seeks to reduce America’s reliance on China for material it sees as pivotal for tech innovation and national security.
The Cabinet paper said a draft framework for bilateral agreement with the US was taken to Cabinet on 2 February – but it was decided New Zealand would not sign the deal at a meeting hosted by the US two days later.
Cabinet received the draft the same day that Prime Minister Christopher Luxon told Morning Report reporting of potential talks between the two nations was “speculative and hypothetical” and “probably a bit frothy and a bit ahead of itself”.
Cabinet asked Jones to return with further advice on the proposed framework, it said.
Jones did so, and recommended re-entering negotiations with the US.
That’s despite risks, including that a minerals deal could lead to “pressure to commit future Crown financing” and “degrading the social licence for mining”, the paper said.
Other risks were redacted.
The risks would need to be “carefully considered”, it said.
The paper also noted iwi had initially raised concerns with the pace and content of the framework, and upon further consultation, they “reaffirmed their strong concerns on process, substance, and partnering with the US”.
Donald Trump seeks to reduce America’s reliance on China for material it sees as pivotal for tech innovation and national security. BRENDAN SMIALOWSKI
The US had also proposed negotiations on a multi-nation Agreement on Trade in Critical Minerals (ATCM), it said.
The US intended the ATCM to “create a preferential trade zone for critical minerals through enforceable price floors and rules around imports and investment”.
Much of the information about the ATCM was redacted, but the paper said Cabinet approval would be sought before any further steps were taken.
It said New Zealand could help create a more resilient global critical mineral supply, and as a country with a reputation for high standards in the resources sector, a US deal could provide a future export advantage.
Developing critical minerals production would require investment from international partners, and the US had a “significant amount” available, it said.
The government wants to double minerals exports to $3 billion by 2035.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
