Quarry quandary: Potential shortage of aggregate used for houses, roads over next decade - Steve Riddell

Opinion

OPINION

Auckland may face a looming crisis of aggregate supply to meet the demand for key infrastructure projects including housing, construction and roading, says Steve Riddell, managing director of Kaipara Quarries.

Our Brookby quarry in South Auckland, along with those of two other major operators (Fulton Hogan and Fletchers), currently produce more than 80 per cent of our region's aggregate. This crushed rock is critical as the foundation of all construction be it homes, roads or infrastructure.

Auckland is already importing one truckload in six of the aggregate we need – some 2.2 million tonnes annually, mostly from Waikato – to supplement our current local production of 11.1 million tonnes.

An average house requires 250 tonnes of aggregate, 25 ten tonne truckloads; and 1 kilometre of a two-lane highway requires 14,000 tonnes of aggregate. Aggregates make up 94 per cent of asphalt and 80 per cent of concrete.

Statistics NZ's high-end forecast says Auckland's population could reach 2.5 million residents by 2033. When this is combined with tens of billions of dollars in infrastructure spending, we could see the region's aggregate needs double. Most of which might have to be imported from outside Auckland. That's not because there is any shortage of aggregate within Auckland – we have abundant supplies.

Rather, the cost and time of getting resource consents have ballooned out of control. It took seven years for Kaipara's existing Brookby quarry in south Auckland to get approval just to apply for a resource consent to expand our operations. Such delays, rising costs and uncertainty in consent outcomes have had a significant impact on the availability of aggregates in Auckland for key projects. The cost imposed by councils to process resource consents have increased 70 per cent since 2014 while the average time taken for a consent to be approved has risen by 50 per cent.

We've estimated a Greenfields quarry producing 5 to 6 million tonnes per year would need around $250 million of capital investment and have an annual operating cost of $70-80m per year with a potential lead time of at least 10 years.

The Brookby quarry in South Auckland. Photo / Supplied

Meanwhile, I'm not aware of any new quarry being developed in Auckland, which has been the case for several years. However, we have seen several major production sites close in the past two decades removing 5.7 million tonnes of annual production from the region, with imported materials particularly coming from Waikato partly meeting the deficit.

Other regions face similar challenges. Kaipara's Waikato quarry last year quoted to supply $280,000 worth of aggregate for Transmission Gully because of Wellington shortages; the trucking cost was more than three times as much and as a result did not proceed.

It seems we as a nation appear to have lost the ability to build and maintain roads to appropriate standards. There are several examples of major roading projects being late in their delivery and incurring substantial budget blowouts, with Transmission Gully being the most recent. Ultimately, Waka Kotahi is accountable for the delivery of these major roading projects and as the principal they cannot abdicate responsibility for their completion.

It is now imperative Waka Kotahi (NZTA), the Infrastructure Commission, the Government and quarry producers work collaboratively and at speed to ensure aggregates for major projects and homes are available in Auckland and across New Zealand.

The stark reality is that we need a combination of increasing production from within Auckland, in addition to importing more aggregate from outside the region, to build the roads, homes and infrastructure required. Auckland has the resource – we just need to be able to access it.

- Steve Riddell was keynote speaker at last week's QuarryNZ conference in New Plymouth.