One rule in mining is that when times are good you've got to salt something away for a rainy day.

Twice in the past decade, Solid Energy has enjoyed revenue close to $1 billion, and aside from last year has returned some healthy profits - and dividends for the Government.

But now it's clear there's nothing in reserve and it's pouring.

Solid's deeply in debt and bankers and the Government are battling to keep alive a firm that once promised to earn the Government up to $1.5 billion by being half-sold through the "mixed-ownership" process.


A bad case of potential hero to zero in two years. So what went wrong?

Solid ended up on the wrong side of the commodity cycle. Most of the coal it mines is used for steel making overseas and that is especially susceptible to the steeper peaks and troughs that set in during and since the global financial crisis.

And while the price of coal has recovered somewhat, much of that gain has been wiped out by the high value of the New Zealand dollar.

Any sustained recovery will be prolonged.

But should the slump have been foreseen, dividends cut and profits banked? Probably. After all, the hard commodity trade is notoriously cyclical. Critics say former CEO Don Elder took his eye off the ball, moving away from the core coal business to alternative energy projects and a fixation with exploiting the vast lignite resources in Southland.

Following 13 years at the helm, he left this month after earning $1.1 million in his final year, which culminated in Solid Energy's after-tax result plunging 146 per cent to a loss of $40 million and the announcement that more than 500 jobs would go. Now the critics are asking: What's next?