Contractor eyes up Solid Energy

8:12 am on 14 August 2015

At least one domestic company says it is interested in buying some of Solid Energy's assets.

Solid Energy's headquarters.

Photo: RNZ / Conan Young

The troubled state-owned coal miner has gone into voluntary administration and if creditors agree to freezing its debts, it will spend the next few years selling off its assets.

A meeting with creditors is due in mid-September, at which time - if agreed to - Solid Energy will exit voluntary administration and undertake the sale of its assets over the next two and a half years.

The company's acting chair, Andy Coupe, said there were three elements to the business: North Island domestic, South Island domestic, and the South Island export.

He had previously said its North Island business was the most valuable.

Last year there were 22 coal mines operating in New Zealand, and Solid Energy owns the top producers among them.

Digger loads up a truck at Stockton Coal Mine.

Digger loads up a truck at Stockton Coal Mine. Photo: 123RF

The Stevenson Group is contracted by the company to operate its second biggest mine, Rotowaro in Waikato.

Stevenson Group chief executive Mark Franklin said he saw value in all of Solid Energy's assets.

"We're a contractor at the moment ... our core business is being efficient at what we do: putting coal on a train. But the fact is we're an interested party and we'd certainly have a look at the process.

"We like to stay in our own backyard at the moment, so we'd probably only be interested in the North Island business at this stage."

The opencast mine, which is 10km west of Huntly, produced 873,313 tonnes of coal last year. Its customers include New Zealand Steel and Genesis Energy.

Indian interest in Stockton?

Solid Energy's Stockton Mine produced 1,554,269 tonnes of coal last year, all for the international market.

There is speculation in the industry that Indian coal company Adani Group may be interested in the Stockton operation.

In 2010 it entered the Australian market seeking to develop one of the country's biggest coal operations, the Carmichael mine in Queensland.

However, the development has had problems, and last week Australia's Federal Court overturned the approval for the mine. That has fuelled speculation among industry insiders that Adani may be interested in Stockton Mine.

Solid's acting chair, Andy Coupe, told Radio New Zealand''s Checkpoint yesterday that the miner has had inquiries over the past few months from a number of sources, but most particularly internationally.

"We know who we will be talking to, we know who will be contacting us quite shortly."

South Island domestic market

Solid Energy also has a number of other producing mines on the West Coast, such as Reddale, which produces thermal coal for industrial and commercial customers in the upper South Island and the West Coast.

The company's Southland mines supply Fonterra's dairy processing plant in Edendale and it also supplies the Alliance meat processing group.

According to New Zealand Petroleum and Minerals, Solid Energy also holds about 45 mining permits or licences of varying status across the country, which may also be of value.

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