Mayor wants Spring Creek mine saved

By Kim Fulton of Westport News

Grey District Mayor Tony Kokshoorn. Photo / Marty Melville
Grey District Mayor Tony Kokshoorn. Photo / Marty Melville

Grey District Mayor Tony Kokshoorn is appealing to the Government and Solid Energy to save Spring Creek Mine.

Operations have been suspended at the mine while Solid Energy completes a review as it strives to reduce its costs.

The mine has 380 workers and contractors.

Mr Kokshoorn said he had written to Prime Minister John Key and Finance Minister Bill English as well as Solid Energy chief executive Don Elder and the board of directors, asking them to complete the half-finished Spring Creek mine.

"Why would you build half a house and walk away from it. It's the same comparison."

Spring Creek has been costing $5 million a month but is in a development stage with no sign of coal production until 2013.

Mr Kokshoorn said Solid Energy needed $70m to finish Spring Creek.

He wanted the Government to supply Solid Energy with a line of credit to finish the development.

Solid Energy itself had said the coal price would rebound late next year and that would allow them to finish Spring Creek.

"There is a major incentive for them not to lose their nerve at this point when they've half developed and spent tens of millions of dollars on that block.

"Instead of making a knee-jerk reaction, they need to concentrate on keeping that mine going and paying the Government the dividends that will come from it."

If the Government was serious about getting a good price for its asset (Solid Energy) it wouldn't want to sell a company that had retrenched.

"They need to sell something that is there and has a tangible asset, which is a coal miner."

Mr Kokshoorn believed Solid Energy had made a knee-jerk reaction to a $200m predicted revenue shortfall for the year.

He added that it was the fourth year of a major world recession, China's growth rate had slowed and the New Zealand dollar was high - "you couldn't have more things going wrong".

"But the four-year recession will start working through shortly, China is predicted to go again next year, our dollar can't get any higher and will dip again eventually and the world will be looking for high-grade coking coal as soon as the demand picks up again,'' he said.

"The demand is just not there at the moment, it's there in two years."

Making a decision, as a coal miner, to close down coal mines, was not the way forward.

The suspension of operations at the Spring Creek mine was a real "kick in the guts" for the Grey district.
"It's going to have an impact on the town, there's no doubt about that. But it's not over yet, we're hanging on to a thread."

Meanwhile, Buller District Mayor Pat McManus was pleased Buller had escaped any large-scale cutbacks.

"It looks like we've escaped it virtually unscathed,'' he said.

He added that it seemed Denniston would be mining coal as normal.

Coal miner Bathurst Resources wants to open a 200-hectare opencast coal mine on the Denniston Plateau and is optimistic it will do so by July.

Mr McManus said Solid Energy would be looking at how it could continue mining and save money at Stockton so there were likely to be fewer contractors.

"We've got to put it into perspective, they're still a fairly important employer in our district and Stockton is the mine that actually makes money for them, so it's more or less business as usual."

Mr McManus said the news wasn't so good for Buller's cousins down in Greymouth, where Spring Creek's future was uncertain.

If it became necessary, employing some of Spring Creek's staff at Stockton and eventually Denniston could lessen the burden.

"The immediate future for Spring Creek, I must admit, doesn't look good but let's hope they do have some plan for expansion in that area."

"It's not very nice when people have to uproot their families and start looking further afield for work."

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