Expressions of Interest sought in buying Coal Mine

Expressions of Interest sought in buying and operating Terrace Underground Coal Mine

Solid Energy is calling for expressions of interest from people interested in buying and operating its Terrace Underground Coal Mine at Reefton.

Simon Doig, Solid Energy’s General Manager of South Island Operations, says that when operations ceased in June, it was because Terrace was no longer an economic operation for Solid Energy. However, a number of people in the industry have since suggested that the mine could be a viable business for a smaller-scale operator so, before letting the workings flood and removing the infrastructure, Solid Energy will test that hypothesis.

“We are looking for interest from people who can show a commitment to working the mine,” Mr Doig says. “The point about the exercise is that some people believe Terrace has the potential to continue to provide a number of jobs and generate earnings for the district. If that is the case, this exercise should prove it one way or the other.

“We are not estimating a sale price. We know what the portable assets are worth but we look to the market for an indication of what Terrace may be worth to another operator.”

Solid Energy is asking interested parties to respond by the end of January and, depending on the number and quality of responses, will make a decision by April 2010.

“We’re doing this reasonably quickly because keeping the mine dry and ventilated is costly,” Mr Doig says. “If we don’t get any offers which are suitable, the mine will be decommissioned and rehabilitation begun on the surface areas.”

Background: Solid Energy and its predecessors, Coalcorp and State Coal, have had a presence in the Reefton district since 1946 when State Coal bought the Reefton Coal Company. Terrace Mine was established in the early 1900s, producing about 5,000t per annum, and was privately owned until 1988, when Coalcorp bought a controlling stake. Terrace Mine’s production peaked at a little over 73,000t (in 2002/03) but its average production since 1999 has been 45,000t.

ENDS

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