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No Buyer For Spring Creek Mine Leads To Closure

No Buyer For Spring Creek Mine Leads To Closure

Despite an exhaustive sales process Solid Energy has been unsuccessful in securing a buyer for Spring Creek Mine and has reluctantly taken the decision to close the mine.

Spring Creek Mine has been in care and maintenance since 2012 when production was stopped following a review of the mine’s economic viability. It will now be sealed to place it in a safe and secure state.

Solid Energy Chief Executive Tony King said that the mine closure is a disappointing outcome but became inevitable in the face of volatile coal market conditions coupled with the significant capital required to get the mine back into operation.

“We had maintained a level of optimism through the sales process that a buyer would recognise the potential for economic redevelopment of Spring Creek Mine, however that simply hasn’t happened.

Interest in the site has been muted throughout an extensive sales process and closure is now the only remaining option.”

Mr King said that the mine, located at Dunollie, near Greymouth, is currently maintained by a small team of nine employees, who have today been advised of the intention to close the mine.

“We recognise that this isn’t the outcome that anyone wanted however staff have been kept informed as much as possible throughout the asset sales process and at least we are now able to provide some certainty about the future of this mine.”

A detailed closure plan including sealing of the mine will now get underway. The sealing process is expected to be relatively straightforward and it is anticipated that the closure process could be accomplished in three to four months. The associated nearby Rocky Creek coal washery will now be offered for sale to interested parties on a standalone basis, now it is clear that the mine will not require its capacity.

Spring Creek is the only mine in Solid Energy’s asset sales portfolio that has not attracted a buyer.

Last October the company announced that sale and purchase agreements have been signed for the Stockton export coal operation, the two Waikato mines, Rotowaro and Maramarua, New Vale and Ohai coal mines in Southland, and Strongman, Liverpool and the Reefton mines on the West Coast.

These are positive outcomes for customers, suppliers, staff, their local communities and regional economies. The settlement dates of these transactions vary depending on the required regulatory approvals and satisfaction of conditions, and are expected to be in the first half of 2017.

Mr King acknowledged the dedication of the Spring Creek staff in maintaining the Spring Creek Mine through an extended period of uncertainty and the considerable efforts of all staff during the lengthy period of asset sales leading into the wind down of the company.

Ends

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