Quakes put coal trade in jeopardy

File photo / APN

It has been 10 days since state-owned mining firm Solid Energy was last able to ship its coal exports to international customers.

The only South Island facility with the equipment required to export the company's minerals - Lyttelton Port's coal wharf, near Christchurch - took a hit in the June 13 aftershocks and remains out of action.

The rest of the port was up and running 96 hours after last week's quakes.

Lyttelton Port chief executive Peter Davie said work was continuing on strengthening piles beneath the coal wharf's ship loader.

There was no definite timeframe on how long it would take to get the facility up and running, he said, but it would take two more weeks "at the maximum".

In the meantime, Solid Energy's exports of West Coast coal are travelling by rail to the port, where they are stacking up in a holding area.

Solid Energy's chief operations officer, Barry Bragg, said the situation was a concern. "It's a problem now and it just becomes a bigger problem the longer it goes on," he said.

Bragg said Solid Energy's international customers kept backup stocks on hand to tide them over when deliveries were impeded. "All our customers allow for a certain amount of delays that occur," he said.

Bragg said there was enough space at Lyttelton Port to store three more weeks worth of output, and after that there was some storage space available on the West Coast.

"Once that's full we'll have to stop production [mining operations]," he said.

"We don't want that to happen."

Bragg said the company was investigating alternative means of exporting its products if Lyttelton Port's coal facilities remained out of action for longer than expected, such as the costly option of chartering ships with onboard loading equipment.

The port of Westport, which NZX-listed mining firm Bathurst Resources was planning to upgrade to allow for coal shipments, could be a future backup facility for Solid Energy, he said.

"It's all a question of cost. It's prudent to have a look at the alternatives ... but at this stage our preferred solution is to bring all of our coal by rail to Lyttelton."

Solid Energy extracts, processes, markets and distributes various types of coal from mines around Greymouth and Westport on the West Coast, as well as New Vale in Southland and Huntly, south of Auckland.

More than half of the firm's output is exported to customers in countries such as China, India and South Africa, where the coal is used in the production of steel, carbon fibre, activated carbon and silicon metal.

Lyttelton Port shipped 1.2 million tonnes of coal in the six months to last December.

Meanwhile, Solid Energy yesterday announced an agreement with Bathurst Resources to collaborate on the proposed coal mining of the Denniston Plateau, North of Westport.

LYTTELTON PORT
* Suffered more damage in June 13 aftershocks after being hit in the February 22 and September 4 earthquakes.
* Wharves, pavements, seawalls, the oil berth and container cranes were damaged in the string of shakes last week, but the company was able to resume all operations - other than coal exports - 96 hours later.
* The listed company has written off $22.6 million of assets as a result of the first Canterbury quake on September 4.