Mayor's eleventh hour plea for Spring Creek mine

The entrance to the Spring Creek Mine. Photo / New Zealand Listener David White

Grey District Mayor Tony Kokshoorn has made an eleventh hour appeal to the head of Solid Energy, before Monday's announcement on the future of the Spring Creek underground coalmine.

State-owned Solid Energy dropped the bombshell last week that all its operations were being reviewed as coal prices fall, prompting fears for Spring Creek, which is still not producing coal but is costing between $5 and $7 million a month to keep open.

The mine, located behind Dunollie, contributes $37m a year to the Greymouth economy in wages and services and employs 230.

Finance Minister Bill English said on Tuesday that Solid Energy was in no shape to be floated as part of the planned assets sales.

With decision day looming, Mr Kokshoorn today made a last minute appeal, urging the Solid Energy board and chief executive Don Elder to avoid making a "knee jerk reaction" they would regret.

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Spring Creek Mine had a loyal workforce, which it had worked hard to recruit at considerable cost. Many Pike River miners had gone overseas and not returned to the West Coast, and Australian firms had even this week been recruiting coalminers in Greymouth. The world recession was now in its fourth year, China's growth had dipped and coal prices fallen by 30 per cent, he said. But two years from now, he expected things would improve again.

"Two months ago, Dr Elder and the board chairman told local businesses that Solid Energy was advanced in a $42m development at Spring Creek ... and seven new drill rigs, on top of existing ones, had been deployed over the past year."

Dr Elder had then announced the development of a new open-cast and underground coalmine, Liverpool, near Spring Creek, and if that went ahead it would come on stream just as steel demand picked up.

"It's important that Solid Energy does not lose its nerve. We all know that coal prices and the economy are cyclical. We have had a kick in the guts from the Pike River disaster."

After Solid Energy bought the crippled Pike River mine, the community had accepted the body recovery could take up to 10 years.

"Partnerships and communities cut both ways. If Solid Energy remains loyal to its workers in the short term, it will be repaid many fold in the medium term. The West Coast is a great exporter of coal and has a bright future."

Solid Energy declined to comment.

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