Fonterra shelves coal mine idea

The group is still campaigning to cut Fonterra's use of coal, claiming it is the country's third-largest coal user. Photo / Christine Cornege

Fonterra, the country's largest milk processor, has confirmed it has put on hold a proposed coal mine at Mangatangi in northern Waikato, while it assesses its energy options.

The Coal Action Network Aotearoa (Cana), which is trying to stop coal mining in New Zealand, said Fonterra sent a letter last week to local residents confirming the decision, which the co-operative put down to its economic position and that of the dairy industry generally.

Cana's Jeanette Fitzsimons said the initial deferment of the mine was said to be because of environmental conditions and then coal prices, and now was being explained away with economic reasons.

"No doubt all three have something to do with it," she said.

The group is still campaigning to cut Fonterra's use of coal, claiming it is the country's third-largest coal user. Fitzsimons has estimated the dairy giant consumes 520,000 tonnes of coal a year at its various milk-processing plants, an increase of 38 per cent since 2008.

Fonterra will not confirm its total coal use for commercial sensitivity reasons and Ministry of Business and Innovation figures provide only annual sector usage rather than that of individual companies.

Solid Energy's 2014 annual report said the Huntly power station and NZ Steel remained its two biggest customers and that it had signed a contract for 100,000 tonnes with an unnamed customer.

Fitzsimons said the only possible user for that amount of coal would be Fonterra.

In February, Fonterra subsidiary Glencoal denied Cana's claims it had put its plan for the opencast mine on hold indefinitely after public opposition and falling coal prices. Glencoal said at the time there had been some delays because of the need to minimise environmental impacts.

Consent to mine about 700,000 tonnes of coal a year from the proposed Mangatangi mine was given in late 2013, subject to conditions addressing environmental and health concerns.

The planned mine was allowed to extract coal over eight years and the land had to be returned to pastoral farming once mining ended.

"While local residents are celebrating the reprieve for their community, none of this reduces the coal that will be burned, nor the carbon dioxide used," Fitzsimons said.

Fonterra said it was "committed to optimising its energy mix towards cleaner, more efficient forms of energy, and continues to investigate secure, cost-effective alternatives to reduce emissions intensity and contribute to our energy efficiency".