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Export Award For Coal Producer Solid Energy

Solid Energy New Zealand Ltd has won a Trade New Zealand Export Award for record coal exports of 1.66 million tonnes and record foreign exchange earnings of more than $100 million in 2001.

The Export Award was presented to Solid Energy New Zealand Ltd by the
Deputy Prime Minister, the Honourable Jim Anderton, in Buller today (Friday 15 February 2002).

More than half Solid Energy’s annual production of around three million tonnes is exported to 15 countries worldwide. All export coal comes from its West Coast mines, which provide work for 250 fulltime and contract staff. In addition to its West Coast mines, Solid Energy, a State Owned Enterprise, has mines in the Waikato and Southland. It employs 400 staff with a further 200 people working for external contractors.

Solid Energy Chief Executive Officer Dr Don Elder says Solid Energy’s success in the international coal market has created the opportunity for it to double its export coal business.

“To meet growing demand from both international and New Zealand customers we need to open new mines and double current annual production to six million tonnes over the next five years, with four million tonnes of that for export. We project that such an increase in production could create up to 300 direct and 200 indirect jobs.”

Mr Elder says that although New Zealand’s share of the world coal trade is small – less than 0.5% of the seaborne global trade – Solid Energy has been able to significantly develop and expand international markets for its specialist coal since it began exporting in 1976.

“New Zealand’s high quality specialist coals command premium prices internationally due to their unique characteristics – low ash and low phosphorus content, their suitability for steel making and high heating values. We have also developed mining techniques specifically for the difficult geology of the West Coast coal reserves, which allows coal to be extracted efficiently and economically.”

Over 80% of coal produced by Solid Energy is used in the steel industry in New Zealand and overseas and the company has developed long-term contracts with leading steel makers in Japan, China and India. In a coals-to-Newcastle scenario, it exports to a number of markets which have their own, much larger coal industries – including
South Africa, China and Australia.

Solid Energy has also developed niche markets in Australia, Northern Europe and
North America for specialist coals in the production of activated carbon (used in water and air filters), carbon fibre (used in the construction industry and to make products such as fishing rods, golf clubs and tennis rackets) and silicon metal (used in products ranging from lubricants and sealants to cosmetics and shampoos).

Trade New Zealand Account Manager David Grant commended Solid Energy for establishing a niche and sustainable coal exporting business despite the demanding challenges of New Zealand’s geology, the constraints of mine to port transport and its distance from international markets compared to other international coal producers.

“A constant drive for innovation and efficiency in technology has helped
Solid Energy achieve record exports of 1.66 million tonnes last year – that’s a significant achievement,” says Mr Grant.

Don Elder says Solid Energy has established credibility and long-term relationships with customers due to its ability to meet their precise product specifications. He says
Solid Energy has also developed the ability to export, at a competitive rate, small shipments of coal to customers more used to buying larger quantities.

He says the company is actively exploring new customers for its products – it takes three years on average to build a relationship with a new client to the point where they are prepared to accept a trial shipment of New Zealand coal for blending. In the last year it signed two major new steel customers, Kawasaki Steel, Japan’s third largest steel market, and South African steel producer, ISCOR.

The Deputy Prime Minister presented the Trade New Zealand Export Award to
Solid Energy Ltd at a lunch hosted by the Buller District Council. He also presented Certificates of Appreciation to The Buller Community and Solid Energy Stockton and Reefton Mines in recognition of the outstanding contribution they have made to
Solid Energy’s export success. Earlier in the day Trade New Zealand’s Stuart McGeorge presented Certificates of Appreciation to the Greymouth Community and Solid Energy’s Strongman Mine.

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