Solid Energy: Decision 'pending' on Stockton mine closure

Solid Energy plans to keep three of the Huntly East's 68 staff on. Photo / NZPA

Solid Energy says a decision on whether the Stockton coal mine should be closed is "pending", and it expects to make a decision in the next few months.

The state-owned company's chairman Andy Coupe said today that the mine's future would not be finalised "tomorrow", but a decision would be made "well before June".

After appearing before the Commerce Committee at Parliament this morning, Mr Coupe told reporters that there had been some interest from local and overseas companies in buying the open cast mine near Westport.

But he also hinted that closure was a possibility.

"We are continuing to assess that now," he said. "We have made it clear to the employees that we have a decision pending on that."

Mr Coupe said there had been a positive response from potential buyers to an information flyer about the mine, and he expected several of them to make site visits soon.

He expected further interest once an information memorandum had been distributed.

However, it was too early to talk about the likelihood of a sale and the company had received "no meaningful response" from prospective buyers.

Chief executive Dan Clifford told reporters that the Stockton mine was making "slight losses" and these were projected to continue.

He said that 40 per cent of the mine's equipment and infrastructure had been sold or moved, including 15 pieces of equipment this week.

"We will continue to assess our assets for profitability and efficiency, irrespective of where we're going we'll continue to do that. We have an obligation.

"In the slippery market that we're in at the moment, downward, ... we will constantly do that. If that means shedding equipment, or closing non-profitable sites, we will do that."

Solid Energy is in voluntary administration and is carrying out a gradual selldown of its assets.

The Commerce Committee heard that the company expected to know which of its assets would be sold by the end of the year, and would provide an update in the middle of the year.

Mr Coupe said 2014/15 had been another very difficult year, with losses of $180 million, mostly as a result of the falling international coal price.

This was a global trend, and two-thirds of coal mines around the world were now unprofitable, he said.

Solid Energy had cut around 1000 jobs since 2012.

Mr Coupe said further redundancies among the remaining 450-person workforce were "inevitable" as the sale process progressed.

Head office jobs had been cut from one in five of the total Solid Energy workforce to one in 10, but further job losses were expected.