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Sale of mines best outcome

Hon Bill English
Minister of Finance
Hon Todd McClay

Minister for State Owned Enterprises


31 October 2016

Sale of mines best outcome


The sale of Solid Energy’s mines provides the best outcome for employees, creditors and communities, Finance Minister Bill English and State Owned Enterprises Minister Todd McClay say.

Solid Energy announced today that it had reached agreement on the sale of the Stockton, Strongman and Liverpool mines on the West Coast, the Rotowaro and Maramarua mines in the Waikato and the New Vale and Ohai coal mines in Southland.

Stockton, Rotowaro and Maramarua have been bought by Phoenix Coal Limited, a joint venture between Bathurst Resources and Talley’s Group, New Vale and Ohai have been bought by Greenbriar which is owned by the Palmer MH Group and Strongman and Liverpool have been purchased by Birchfield Coal Mines Limited.

“The sale of the mines as going concerns is a very positive development,” Mr English says.

“It means they will continue to provide jobs and contribute to regional economies. That is not something we could be sure of 18 months ago.”

Falling international coal prices and high debts forced Solid Energy into voluntary administration in August 2015. Shortly afterwards Solid Energy’s major creditors effectively took control of the company when arrangements were entered into to facilitate the orderly sale of its assets. Those arrangements provided for payment in full to employees and trade creditors.

Mr McClay says Solid Energy’s remaining creditors – primarily banks – are expected to receive about half of what is owed to them.

“I want to thank Solid Energy’s board and management for the work and effort they have put into achieving the best possible outcome for the company’s creditors and staff under sometimes difficult and trying circumstances.”

A condition of two of the sales was that they were confidential. Bathurst is announcing details of the Phoenix Coal Ltd purchase on Wednesday.

As part of the sales process, the Crown has agreed to take over responsibility for long term rehabilitation obligations associated with acid mine drainage from the Stockton plateau. Current estimates are that this will cost $36 million on top of earlier commitments.

The Crown had previously extended its indemnity for pre-1987 historical rehabilitation obligations to cover the period between 1987 and 2014 at a cost of $103 million.

ends

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