Southland farmers are said to have been getting great deals for their properties as the state-owned coal miner Solid Energy spends tens of millions of dollars buying access to lignite resources in the area.
The company says it has had an "active" programme of land purchases over the
past 18 months.
Southland Dairy Farmers of New Zealand conference delegate Rod Pemberton told the Business Herald it appeared Solid Energy had been paying above market rates for beef, dairy and sheep farms around the Mataura opencast mine near Gore. "Most of them [the farmers who have sold] seem to be smiling," said Pemberton.
One bank manager believed Solid Energy was paying farmers about 50 per cent of the value of the coal under the ground, he said.
"We've heard that there's a whole lot of different rates being paid and I presume it's been connected to how much coal they think that's there."
Solid Energy's communications director Vicki Blyth would not say, for commercial reasons, how much land had been bought or what price had been paid. However, it has been estimated that Solid Energy has spent tens of millions of dollars so far.
Blyth said: "We've paid what we consider to be a fair value to secure access to the lignite."
Last year, the company also announced it had bought the privately owned New Vale mining operation in Southland, which supplies the local Fonterra Edendale factory.
The Mataura mine itself was closed in 2000. But, earlier this month, the company announced it was undertaking a six-month drilling programme in the area to further define its coal resources.
Solid Energy says the land acquisitions - as well as its mines - have given it access to 600 million tonnes of coal, mostly lower-grade lignite.
It says it is currently looking at increased use of lignites by industrial markets, electricity generators, transport fuels, petrochemicals and other products.
Coal dealings
* Solid Energy has been buying up farm land in Southland to get access to lignite resources.
* The SOE is understood to have spent tens of millions of dollars.
* Some farmers have reportedly been paid above market rates for their land.
