4 Feb 2013

Solid Energy head's resignation applauded

10:41 pm on 4 February 2013

The resignation of the chief executive of the state-owned coal company Solid Energy has been called the correct one by some in the industry.

Don Elder announced his resignation on Monday after nearly 13 years at the helm, saying his departure follows discussions underway for some time.

Dr Elder has come under increasing criticism over the company's financial woes, which culminated last year in the mothballing of Spring Creek Mine on the West Coast and 544 redundancies nationwide.

Grey District mayor Tony Kokshoorn says Dr Elder did a good job for most of his nearly 13 years at the helm but should have reacted more quickly to plummeting international coal prices.

"They should have foreseen with their hedging and forward planning the coal price drop in China.

"That ended up having 340 layoffs in Greymouth alone, which was extremely damaging to our economy. ... at the end of the day the buck had to stop somewhere. The buck stopped with Dr Elder."

Mr Kokshoorn says he has confidence in Solid Energy's new direction.

He says he's confident the company is now back on track with plans for a new opencast mine near Greymouth once international prices rebound.

Union man pleased

The Engineering, Printing and Manufacturing Union, which represents coal miners, says management should have responded more quickly to falling international coal prices by concentrating on core business.

A West Coast coal miner who was one of the Solid Energy workers who lost their jobs last year says the resignation was long overdue.

The former union delegate at Spring Creek, Trevor Bolderson, says Dr Elder had to go.

He says his fellow workers still feel let down about the whole situation and how Dr Elder "sort of took his finger off the pulse".

Mr Bolderson says while Dr Elder has signalled he would like to stay on in a transitional role, the company needs a totally fresh start.

Environmental group also pleased

An environmental lobby group fighting Solid Energy's plans to mine billions of tonnes of lignite in Southland says Dr Elder's resignation signals a welcome change of direction.

A spokesperson for the Coal Action Network Aotearoa, Tim Jones, says the group had expected incoming chairman Mark Ford would sack Dr Elder.

Mr Jones says Solid Energy should now ditch its uneconomic and environmentally destructive plans to dig up billions of tonnes of lignite.

Effective immediately

Dr Elder will step down immediately as chief executive but will remain available to assist with a transition. Whether that offer will be taken up by Mr Ford is yet to be known.

Organisational development and performance group manager Garry Diack will become acting chief executive until a permanent replacement is found.

Mr Ford, who replaced John Palmer in the role last year, thanked Dr Elder for his service, saying the company had grown and developed substantially under his leadership.

Dr Elder says the company has worked its way out of the major global market downturn in 2012.

He says this includes significant restructuring and the Solid Energy board would be considering many future changes.

Dr Elder says it is appropriate for the company's future to be guided by a new chief executive.

He believes Solid Energy has a strong future once it overcomes the effects of the recent market downturn.

In its most recent annual report, Solid Energy made an after-tax loss of $40 million, compared with a profit of $87 million the previous year. Poor international coal prices were blamed.

Sales link, says Labour

The Labour Party is not surprised at the resignation, given the state-owned company has been flagged for partial sale.

Labour's state owned enterprises spokesperson, Clayton Cosgrove, says Dr Elder has made a significant contribution to Solid Energy.

But he says the Government is determined to go through with the partial sale and wanted a clear house to help that happen.

Mr Cosgrove says Dr Elder's departure comes after a number of new appointments to the board, including a new chairperson.