Solid Energy announces closure of mothballed Spring Creek Mine after failing to find a buyer

By Laura Mills

Solid Energy has announced the closure of the Spring Creek Mine after failing to find a buyer, closing the door on one of the best coal resources in New Zealand - and 150 years of underground mining on the West Coast.

It will result in nine job losses of the skeleton crew left behind to keep the pit in "care and maintenance" after the 200-strong workforce was laid off in 2012.

Huntly East Mine, in Waikato, is in its final few weeks, which leaves Spring Creek as the last underground coalmine in the country.

Grey District Mayor Tony Kokshoorn today lamented the closure, but said it was inevitable as the new post-Pike River health and safety laws made it virtually impossible to continue.

"This coalmine had great promise - it has some of the best coal in the world,"
Mr Kokshoorn said.

Solid Energy had been spending $2 million a year to keep the mine ventilated since it was mothballed and production suspended suddenly in 2012.

The pit and its myriad of underground roads - which run from the Seven Mile Valley above Dunollie down towards Rapahoe - will now be flooded.

The failed State-owned enterprise said today efforts to sell the mine asset had been exhaustive but in the end, unsuccessful.

The Spring Creek mine, pictured last month. Photo / Greymouth Star
The Spring Creek mine, pictured last month. Photo / Greymouth Star

Details of how it would be sealed are still being worked out, but the natural flooding which will occur may be accelerated.

Solid Energy chief executive Tony King said it was a disappointing outcome but inevitable in the face of volatile coal market conditions, coupled with the significant capital required to get the mine back into operation.

He acknowledged Spring Creek was a big resource.

"We had maintained a level of optimism through the sales process that a buyer would recognise the potential for economic redevelopment of Spring Creek Mine, however that simply hasn't happened," Mr King said.

A detailed closure plan, including sealing of the mine, will now get under way.

The sealing process is expected to be relatively straightforward and it is anticipated that the closure process could be accomplished in three to four months.

Solid Energy expects to be able to sell most of the equipment and will probably relinquish the mining permits. The associated Rocky Creek coal washery will be offered for sale to interested parties on a standalone basis; it employs two regular staff, plus occasional extras.

Mr Kokshoorn said it was truly the end of an era.

At its peak Spring Creek employed more than 200 miners and hundreds of contractors.

"The writing was on the wall ever since the health and safety changes after Pike," he said.

"It's another blow, but not unexpected."

The council had been involved in discussions with the various prospective buyers, including talk of developing an activated carbon plant there.

However, mining was just too difficult under the new legislation, Mr Kokshoorn said.
"Once it's closed they can't recommission it."

The only possibility of getting to the valuable coal resource in future would be to access it from the Rapahoe side.

The mayor said Greymouth would need to continue the painful transition from a coal economy to sustainable industries, and for now the best lead was tourism.

"We need to move from a worn out coal town to attractive town for visitors."

Spring Creek is the only mine in Solid Energy's asset sales portfolio that has not attracted a buyer.

In October it announced it had signed an agreement with West Coast-owned Birchfield Coal Mines to take over the Strongman and Liverpool open-cast mines, while Stockton open-cast near Westport was to be sold to a joint venture between Bathurst Resources and Talley's Group.

Solid Energy will cease to exist by March 2018. It expects to have sold all its assets by July this year.

Rosco was confirmed today as the buyer of Solid Energy's Reddale Mine, near Reefton.

The open-cast pit employs eight staff and is located near the old Burke's Creek Mine.

Solid Energy also noted the Birchfield Mine acquisition included Island Block just outside Reefton, on the Lewis Pass highway.

- Greymouth Star

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