31 Jul 2017

Govt to pay environmental costs to 'retain West Coast jobs'

6:34 pm on 31 July 2017

The government is defending its assumption of environmental liabilities from the sale of assets of the defunct state coal miner Solid Energy.

It said it did this to make sure the mines were sold as going concerns and jobs would be preserved on the West Coast, which it said it revealed to the public last October.

Digger loads up a truck at Stockton Coal Mine.

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

At that point, a consortium of the mining firm Bathurst Resources and Nelson's Talleys group agreed to buy the best assets of Solid Energy, which collapsed under an unpayable debt burden of $400 million.

Approval for the sale came though last week from the Overseas Investment Office, and the deal is expected to be settled by the end of next month.

Forest and Bird then unveiled documents showing the Crown would take on environmental costs worth $57m for the Stockton mine.

It accused the government of taking on environmental liabilities of the mine so it would be easier to sell it.

"The government is essentially giving away the assets of Solid Energy... and the taxpayer is paying for the liabilities," the group's chief executive Kevin Hague said.

The Minister for State Owned Enterprises Todd McClay then replied that taking responsibility for liabilities arising from acid drainage at the Stockton mine had been announced last October.

"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," a media release from that date said.

"Current estimates are that this will cost $36m on top of earlier commitments.

The statement went on to say the Crown had previously extended its indemnity for pre-1987 historical rehabilitation obligations to cover the period between 1987 and 2014.

This extension cost $103m.

In his latest statement, Mr McClay said the government took the decision to indemnify historical liabilities as a way of both ensuring good environmental outcomes at the company's mine sites, and helping to ensure that the mines could be sold as a going concern.

He repeated his statement that this could help preserve Stockton mine as a going concern with jobs retained on the Coast.

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