Solid Energy
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Company type | State owned enterprise |
---|---|
Industry | mining,coal |
Founded | 1987,Wellington |
Defunct | 16 March 2018 |
Headquarters | Christchurch,New Zealand |
Key people | Andy Coupe, Chair |
Products | Coal, renewable energy fuels |
Revenue | $370millionNZD(2015)[1] |
Number of employees | 589[1] |
Solid Energywas the largestcoal miningcompany in New Zealand and is astate owned enterpriseof theNew Zealand Government.
The company was formed from the former government department State Coal Mines. It was then established as astate owned enterprisecalled Coal Corporation in 1987 (known as Coalcorp),[2]and renamed Solid Energy New Zealand Limited in 1997. In 2015, it had a turnover of NZ$369.8 million and produced 2.8 million tonnes of coal.[1]
The company mined extensively in New Zealand'sWaikatoand theWest Coastregions. Approximately half the coal mined was exported, as it was high value with little moisture, sulphur, or other impurities. Much of this was toChina,IndiaandJapanwhere it was used in thepower generationandcokeindustries and for the manufacture ofsteeland othermetals.Major domestic users included theHuntly Power StationandNew Zealand SteelatGlenbrook.
Solid Energy went intovoluntary administrationin August 2015.[3]On 31 October 2016 it was announced that the company's assets had been sold to three separate buyers.[4]On 16 March 2018 the company was put into liquidation.[5]
Coal operations
[edit]Solid Energy produced approximately 85% of New Zealand's coal annually.[6]Each year it produced around 4 million tonnes, more than half of it for export.[7]
Mine | Location | Type | Reserves, kt | Production, kt pa |
---|---|---|---|---|
Huntly East | Waikato | Underground | 7,000[8] | 100[9] |
Rotowaro | Waikato | Opencast | 14,000 | 1200 |
Stockton | West Coast | Opencast | 16,000 | |
Spring Creek | West Coast | Underground | 18,000 | mothballed |
Terrace | West Coast | Underground | 700 | nil |
Strongman | West Coast | Underground | closed | |
Reddale Mine | West Coast | Opencast | 140 | |
New Vale | Southland | Opencast | 250 | |
Ohai | Southland | Opencast | 2,000 |
Solid Energy had proposed opening two further mines: theCypress Mineand theMt William North Mining Project.
In 2006, Solid Energy bought Newvale Coal Co Limited and acquired the Newvale opencast mine, located in the Waimumu coal field inSouthland.[10]The Newvale mine suppliesligniteto the domestic market, including toFonterra'sEdendaledairy plant.[11]In December 2010 the Terrace mine nearReefton,which had closed in 2009, was sold to Crusader Coal.[12]In October 2011 Solid Energy opened the small opencast Reddale Mine near Reefton on the West Coast.[13]
Retrenchment 2011 to 2015
[edit]In March 2012, Solid Energy purchasedPike River Coal,which had gone into receivership after thePike River Mine disasterof 2010.[14]The sale was completed in May.[15] There has been criticism because Solid Energy decided in 2014 that it was too risky to re-enter the mine to recover any remains from the mine.[16][17] The government subsequently purchased the 3580 ha of land around the Pike River Mine. The environment ministerNick Smithannounced on 15 November 2015 that the 3580 ha of land is to be added to thePaparoa National Park,and a 45 km walkway, thePike 29 Memorial Trackfrom Blackball to Punakaikai through the park constructed as a memorial to the 29 miners lost in the disaster.[18]
In mid-August 2012, the chief executive,Don Elder,announced a decline in Solid Energy's revenue of $200 million and a review of its operations.[19]On 25 October 2012, Solid Energy confirmed it was moth-balling the Spring Creek Mine and that 220 miners would be made redundant.[20]Solid Energy's annual report for the financial year ended June 2012 was released in November and showed a loss of $40 million, a decline of 146% from the profit for 2011.[21]
In December 2012, workers at mines owned by Solid Energy were repeatedly rejecting pay cuts and reductions in hours.[22]Solid made 235 employees redundant at the Spring Creek mine, and reduced the workforce at the Christchurch head office by 163 positions,[23]as well as cutting 60 jobs at the Huntly East mine.[24]In January 2013, workers at theStockton Mineagreed to reduced hours and pay after months of negotiations with owners Solid Energy, who had dis-established several hundred jobs in the previous year.[25]
On 4 February 2013, board Chairman Mark Ford announced that Don Elder had resigned as Chief Executive and that Garry Diack would be the interim CEO until a permanent CEO was appointed.[26]On 22 February 2013, Solid Energy stated that its half-year result would include a further "significant loss" and that its debt had increased to $389 million.[27]Finance MinisterBill Englishdistanced the Government from the state-owned company's woes, saying it would no longer be paying out large bonuses to executives.[28]
In 2011, Solid Energy had valued itself at $3.5 billion, but a later review said that was at least $2 billion too high.[29][30]A restructuring package in October 2013 gave the company an extra $100 million in equity, with 75% coming from banks and 25% from the New Zealand Government. Another $103 million of equity was supplied by the government in September 2014.[31]
Voluntary administration and sale of assets
[edit]On 13 August 2015 the company went into temporary voluntary administration, asking creditors to freeze most of its debt. If the creditors agree, Solid Energy will sell its assets as going concerns so that it can pay the creditors.[31][32][33]
On 31 October 2016 the company announced it had concluded sale and purchase agreements for the majority of its mining assets.[4]Agreements were signed with three different entities:
- Phoenix Coal Limited,a joint venture ofBathurst ResourcesandTalleys Group,for the Stockton export coal operation, and the two Waikato mines, Rotowaro and Maramarua, which supply for the domestic North Island market;
- Greenbriar,owned by the Palmer MH Group, a privately owned South Island resources group – for the New Vale andOhaicoal mines in Southland;
- Birchfield Coal Mines Limited,a West Coast mining business, for the Strongman and Liverpool mines on the West Coast.[4]
The sales were completed in the first half of 2017.[4]
Lignite conversion proposals
[edit]In 2010, Solid Energy was promoting a number of 'lignite conversion' projects. Solid Energy believed that its proposed projects "could unlock the vast potential of Southland’s multi-billion tonne lignite deposits by making them into high value products".[34]In January 2011, Southland Chamber of Commerce chief executive Richard Hay predicted that the full lignite to briquette plant and the lignite to fertiliser plant might employ up to 2,300 people which would transform the fortunes of the town ofMataura.[35]
Briquettes
[edit]One of the projects was to make fuel briquettes from lignite. A pilot briquetting plant was planned for either the former Mataura Mine site, or the formerMataura Paper Mill.In July 2010, Solid Energy reported it had run a successful trial of briquettes with US partner GTL Energy.[36]In June 2011, Gore District Council approvedresource consentsfor the Mataura briquetting plant. By June 2012, construction was under way at a site by State Highway 1, south of Mataura. The briquetting plant was expected to process 148,000 tonnes of low-grade lignite from the New Vale mine into 90,000 tonnes of higher-quality briquettes for fuel. The plant would have had a boiler likely to burn 15,000 tonnes of lignite a year.[37]
Fertiliser
[edit]The other potential lignite-conversion project was to gasify lignite to produce urea-based fertiliser.[38]Solid Energy was considering the viability of a lignite-to-urea plant with the fertiliser company Ravensdown as partner.[39]Solid Energy and Ravensdown initially co-operated over a joint concept study until August 2012 when Ravensdown stated it would no longer be involved.[40]
Liquid fuel
[edit]The other potential lignite-conversion project was to gasify lignite to produce liquid fuels.[38]Solid Energy had an agreement with an Australian company, Ignite Energy Resources Pty Ltd, to develop a lignite-to-liquid plant. The technology involved had not been proved viable at a commercial scale.[39]
Implications
[edit]In December 2010, Dr Jan Wright, theParliamentary Commissioner for the Environment,issued a report, "Lignite and climate change: The high cost of low grade coal",[41]which criticised the lignite conversion proposals for their carbon intensity, their contribution to climate change and the likelihood that they would be eligible to receive a free allocation of carbon credits under theNew Zealand Emissions Trading Scheme.[42]Wright said "it makes no sense that the emissions trading system (ETS) rules would lead to taxpayers subsidising, even at a modest level, new investment in outdated dirty technology".[43]
On 22 February 2013, theNew Zealand Heraldreported that the plans for converting the Southland lignite into diesel, fertiliser and burnable briquettes has been abandoned due to debts and low coal prices.[44]
Renewable energy operations
[edit]Solid Energy had previously invested heavily in the development of renewable energy in New Zealand, but due to the retrenchment begun in mid-2012, significant restructuring occurred. The biodiesel business was divested and now exists as two separate business: Biodiesel New Zealand which manufactures biodiesel, and Pure Oil NZ which manages the agri-business operations.
Switch, the wholesale distributor of wood pellet fires and Apricus solar hot water systems, was absorbed by Nature's Flame,[45]a manufacturer of wood pellet fuel. Nature's Flame was restructured to be a stand-alone business, although was still an asset of Solid Energy. Nature's Flame produceswood pelletsfor home heating.[45]The company claims that the wood pellets are a sustainable, renewable fuel that burns so efficiently it is virtually smokeless, and that it meets stringent new clean air standards.[45]According to Solid Energy's 2008 Annual Report, Nature's Flame was the largest manufacturer of wood pellets in the Southern Hemisphere.[46]Nature's Flame began in 2003, when Solid Energy purchased a small wood pellet company based atRolleston.[47]
Solid Energy applied for aresource consentfor a hydro-electric power station at itsStockton Mine.[48]
Opposition groups
[edit]Concerns were raised about the environmental performance of Solid Energy particularly at theStockton Mineon the West Coast. In 2006, the Parliamentary Commissioner for the Environment proposed to undertake a review of the environmental performance of the company in 2008.[49]
Solid Energy has also been criticised by the Ngawakau Riverwatch group and environmental groups and organisations such as Greenpeace, Forest and Bird, The Buller Conservation Group and the Save Happy Valley Coalition. The criticisms include carbon emissions, environmental damage andgreenwashingin respect of the impacts of mining.[citation needed]
Resource consents were granted to Solid Energy for the development and operation of theCypress mineon land nearWaimangaroa.[50]This was opposed by the environmental groupSave Happy Valley Campaign(SHVC). They claimed that the mine would contribute toacid mine drainage,climate changeand the possible extinction of a species ofPowelliphantasnail.
On 27 May 2007,The Sunday Star-Timesreported that Thompson and Clark Investigations Ltd, a security firm employed by Solid Energy, used private individuals to spy on SHVC.[51]A second spying episode was alleged involving Thompson and Clark attempting to employ another spy to obtain information from SHVC.[52]Solid Energy claimed that they had no knowledge of that instance of an attempt by Thompson and Clark to employ a spy.[53]
See also
[edit]References
[edit]- ^abc"Annual Report 2015"(PDF).Solid Energy. 29 September 2015.
- ^"Industry History".Solid Energy.Retrieved12 December2011.
- ^English, Bill; McClay, Todd (13 August 2015)."Solid Energy into temporary voluntary administration"(Press release). New Zealand Government.
- ^abcd"Solid Energy sales process achieves strong outcome".Solid Energy. 31 October 2016.
- ^"Solid Energy Limited".NZ Companies Office.Retrieved13 April2018.
- ^"Coal Industry Overview".Crown Minerals. 17 December 2008.
- ^"Solid Energy's coal business".Solid Energy. 2007.
- ^"Huntly East mine"(PDF).Solid Energy.May 2012.
- ^"Solid Energy proposes to halt production at Huntly East Mine in New Zealand (production reduced from 450 kt pa in 2013)".Mining Technology.8 October 2015.Retrieved11 December2015.
- ^"Solid Energy bid to acquire Newvale Coal"(Press release). Commerce Commission. 22 September 2006.Retrieved13 December2010.
- ^Crown Minerals (18 April 2007)."Eastern and Fonterra sign contract for Clandeboye coal supply".Ministry of Economic Development.Retrieved13 December2013.
- ^Gibson, Neville (21 December 2010)."Solid Energy sells mothballed coal mine to new company".The National Business Review.Retrieved16 January2011.
- ^"New Reefton opencast mine helps ensure supply for Solid Energy South Island customers"(Press release). Solid Energy. 28 October 2011.Retrieved30 October2011.
- ^"Pike River mine sold to Solid Energy".Stuff.co.nz.3 March 2012.
- ^"Conditional sale of Pike River confirmed".3 News NZ.10 May 2012.
- ^"Solid-Energy wont reenter Pike River Mine".Stuff (Fairfax). 6 November 2014.
- ^"Pike River re-entry feasible for at least a year".Stuff (Fairfax). 23 September 2014.
- ^"Pike River-Walkway confirmed for West Coast".Stuff (Fairfax). 15 November 2015.
- ^Hartley, Simon (24 November 2012)."Solid Energy plunges".Otago Daily Times.Retrieved21 January2013.
State-owned enterprise Solid Energy has finished a forgettable financial year, with its after-tax profit plunging 146% to a loss of $40 million
- ^Lee Scanlon (25 October 2012)."Axe falls on Spring Creek".Westport News.Retrieved14 November2012.
- ^Steeman, Marta (24 November 2012)."Solid Energy's High Pay Rates Stay Despite Firm's Loss".Stuff.co.nz.Retrieved21 January2013.
- ^"Miners reject pay cut deal".3 News NZ.20 December 2012.
- ^"Mine job cuts 'will affect thousands'".3 News NZ.26 October 2012.
- ^"Mothballed mine not viable – Solid Energy".3 News NZ.25 September 2012.
- ^"Miners agree to pay cut, reduced hours".3 News NZ.18 January 2013.
- ^Bradley, Grant (5 February 2013)."Solid Energy chief calls it a day".The New Zealand Herald.Retrieved5 February2013.
- ^Trevett, Claire (22 February 2013)."Crisis at state coal firm but Govt vows to save it".The New Zealand Herald.Retrieved22 February2013.
- ^"No more bonuses – English".3 News NZ.22 February 2013.
- ^"New Zealand government will keep Solid Energy afloat".CoalGuru.com.23 February 2013.
- ^"Solid Energy on shaky ground".3 News.22 February 2013.
- ^abStylianou, Georgina."Solid Energy goes into administration".Radio New Zealand.
- ^"Solid Energy bought down by debt and ambition".Stuff (Fairfax). 13 August 2015.
- ^"Don Elder's grandiose Solid Energy plans".Stuff (Fairfax). 22 May 2015.
- ^"Lignite Conversion".Solid Energy New Zealand Ltd. Archived fromthe originalon 26 May 2010.Retrieved15 December2010.
- ^Goodwin, Eileen (25 January 2011)."Briquette plant proposal a step in the right direction".Otago Daily Times.Retrieved21 January2013.
- ^NZPA (13 July 2010)."Progress in lignite upgrade".The New Zealand Herald.Retrieved25 January2011.
- ^de Reus, Helena (5 June 2012)."Briquetting plant changes approved".Otago Daily Times.Retrieved12 June2012.
- ^ab"Solid Energy to continue lignite exploration in Southland"(Press release). Solid Energy New Zealand Ltd. 12 October 2010.Retrieved15 December2010.
- ^ab"Solid Energy secures access to upgrading technology"(Press release). Solid Energy New Zealand Ltd. 21 May 2010.Retrieved15 December2010.
- ^de Reus, Helena (11 August 2012)."Conflict of interest no longer".Otago Daily Times.Retrieved31 August2012.
Ravensdown would no longer be involved with further feasibility work
- ^Lignite and climate change: The high cost of low grade coal.Parliamentary Commissioner for the Environment. 9 December 2010.Retrieved5 January2011.
- ^"Lignite a bad choice for NZ".Parliamentary Commissioner for the Environment. 9 December 2010.Retrieved5 January2011.
- ^NZPA (9 December 2010)."Don't subsidise 'dirty' coal with taxpayer cash – PCE".3 News.Retrieved9 August2012.
But it makes no sense that the emissions trading system (ETS) rules would lead to taxpayers subsidising, even at a modest level, new investment in outdated dirty technology
- ^BusinessDesk (22 February 2013)."Solid Energy's lignite plans dead".The New Zealand Herald.Retrieved22 February2013.
{{cite web}}
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has generic name (help) - ^abchttp://www.nature'sflame.co.nz[dead link]
- ^"Annual Report 2008".Solid Energy. 18 September 2008.
- ^"Nature's Flame wood pellet ash organic certified".Solid Energy. 5 April 2007.Retrieved27 February2008.
- ^"Stockton Hydro Scheme A Solid Energy Project".Solid Energy. 15 February 2010.Retrieved19 April2010.
- ^"Solid Energy's environmental management systems and performance".Parliamentary Commissioner for the Environment. November 2006.Retrieved16 November2008.
- ^"Solid Energy welcomes consent green light for Cypress coal mine".Crown Minerals. 3 June 2005.
- ^Nicky Hager;Deidre Mussen (27 May 2007). "I was paid to betray protesters".The Sunday Star-Times.
- ^"Private investigators still digging on West Coast".Sunday Star Times.20 April 2008.
- ^"Statement by Solid Energy re article in today's Sunday Times".Solid Energy. 20 April 2008.Retrieved21 April2008.
External links
[edit]- Solid Energy,CoalNZ– corporate websites
- Nature's Flame,Biodiesel NZ,Switch– subsidiaries
- Save Happy Valley Coalition– opposition group
- Solid EnergyatSourceWatch
- Coal companies of New Zealand
- Government-owned companies of New Zealand
- Energy companies established in 1987
- Non-renewable resource companies established in 1987
- 2018 disestablishments in New Zealand
- Companies based in Christchurch
- New Zealand companies established in 1987
- Energy companies disestablished in 2018
- Defunct energy companies of New Zealand