Solid Energy a stranded asset – Coal Action Network

Press release, August 4 2015

Solid Energy is a stranded asset and the sooner the Government and the Labour Party realise this, the faster New Zealand can start seriously discussing a “Just Transition” away from fossil fuels, Coal Action Network Aotearoa said today.

“Several commentators in New Zealand are today saying that coal has a future, but the world is thinking otherwise, as can be evidenced from President Obama’s Clean Power Plant announcement today,” said Cindy Baxter, of the CANA organising group.

“Solid Energy’s Chairperson resigned in April because her view that the company was not viable conflicted with Bill English. She was right. We need to face up to this fact, not continue to promote coal use around the country,” said Baxter.

Consider these factors:

• Today, shares of the world’s largest coal company, Peabody Energy, plunged again to just over USD$1 and the company is struggling, with others like Arch Coal on the edge of bankruptcy
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• In Germany, a brand new coal fired power plant could be bought last week for just one Euro. In Queensland last week, a coal mine sold for $1.
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• The price of large scale solar is now almost at price parity with coal in the biggest markets
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• Internationally there are now major funds like the Norwegian Sovereign Fund divesting from coal, and even the Intergovernmental Panel on Climate Change says we have to phase out of coal.
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• For metallurgical or coking coal (Stockton, Denniston), the outlook is also bleak, with major analysts continually downgrading their outlook for coking coal for steel plants, as China’s economy turns away from construction, and focuses on reducing pollution from such plants. The price of iron ore has also plummeted.
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• The scrap steel market in China is expected to soar, and steel can be produced from this using Electric Arc Furnaces that run on renewable energy.
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• Phasing out coal worldwide by 2050 would reduce warming by half a degree – even the UN Climate Chief Christian Figueres has warned the industry to leave it in the ground. The goal of phasing out fossil fuels by 2050 is in the negotiating text for the Paris agreement later this year.
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“New Zealand’s coal workers are suffering from this boom and bust commodity market, where the outlook is looking bleak. The writing is on the wall for this industry and the sooner we start looking for alternatives, the better off these workers will be,” said Baxter.

“A planned transition away from coal could include the closure of Solid Energy’s mines and their rehabilitation, which would create jobs in the short term.The question is who pays. But to blunder onwards without looking at the big picture is simply foolish.”

Further reading: “Jobs After Coal” – Coal Action Network Aotearoa, May 2015.

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