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Mokau coal field revived

Murray Sampson Mokau South Resources (MSR) QM Magazine Featured Image

While the King Country village of Ohura has suffered another setback now that UK company Strategic Minerals is not pursuing any possible redevelopment of the Tatu coal resource, the coastal town of Mokau may see a resurgence in coal mining. By NEIL RITCHIE.

London-listed Strategic Minerals had a controlling interest in King Country Mining (KCM), which in 2011 hoped to re-open the Tatu State Coal Mine at Ohura with the aim of exporting coal through New Plymouth’s Port Taranaki after railing it on the now defunct Okahukura-Stratford railway line.

However, Strategic Minerals is now moving away from developing bulk natural resources, such as coal, stopping all activity on the Tatu coal project, and focusing on minerals, including acquiring up to 50 percent of Central Australian Rare Earths (CARE) for £190,000 and possibly buying a further 24.5 percent.

Historical photo taken of the landing stage at the coal mines. Mokau River. Extract from the supplement to the Auckland Weekly News 02 AUGUST 1901.
Historical photo taken of the landing stage at the coal mines. Mokau River. Extract from the supplement to the Auckland Weekly News 02 AUGUST 1901.

Strategic says the New Zealand coal market is deteriorating and that more capital and further work would be required to make sure of any saleable product from Tatu. Unable to agree on extending options for further financing, Strategic is transferring its majority (51 percent) in KCM back to the company’s original owners for just one Kiwi dollar.

Ohura was once a thriving settlement with operating coal mines and a men’s prison. Now only about 40 people live there, most with no reticulated electricity, water or sewage.

But private Kiwi company Mokau South Resources (MSR) is resurrecting plans to develop one of the country’s largest remaining coal resources, the Mokau Coal Field.

Back in February it applied to the Waikato Regional Council for 30-year consents to divert, store and discharge water, as required under the Regional Management Act, as a precursor to the possible progressive development of the field later this decade.

As expected, environmentalists are opposing the council granting consents for such a scheme, citing coal as the dirtiest fossil fuel that is hastening climate change and that any mining on the now Department of Conservation land, which is in the catchment of the Mokau River, is unacceptable.

However, MSR director Murray Sampson disagrees, saying any environmental impacts of the proposed opencast mining on the Panirau Plateau will be minimal, with native bush restored once mining of a particular section of land has finished. And a consultant’s ecological assessment report to the regional council also shows any environmental impact will be minor, with any sediment very unlikely to reach the Panirau Stream, a tributary to the Mokau River.

This latest proposal follows a similar plan in 2009 when the company – 76 percent owned by Murray (73) and fellow director and brother Ian (76), both former Taranaki men – had discussions regarding exporting the coal through Port Taranaki, particularly to Australia, China and India. However, that scheme failed, principally because MSR did not then have the necessary resource consents and any likely buyers or investors were probably put off by that uncertainty.

Hence lodging the current RMA applications to help with future financing and finding another buyer(s). “The most important fact is to have an asset that is ready to mine,” says the younger brother Murray.

MSR was originally incorporated in 1947 when a coal lease was agreed with the original land owner who set up three titles over the land – a timber lease, coal lease, and ownership of the land itself.

The Mokau field contains some five coal seams, one up to three metres thick, and potentially holding up to 15 million tonnes of sub-bituminous coal able to be accessed by opencast mining. Sub-bituminous coal typically contains 35 to 45 percent carbon, compared to bituminous coal (45 to 86 percent carbon) and the rare anthracite coal (86 to 97 percent).

“But we need more money to get things up and running,” he says, adding that it is estimated about $15 million will be needed to create a viable export operation.

He further says MSR’s proposed opencast mining method will not be “a huge hole as at the Waihi gold mine”, but to strip the overburden, take the coal out, and then replace and reinstate the land – strip mining compared to pit mining.

And only small parcels, about 20 hectares, will be mined at a time, leaving most of the mining lease, which covers about 740 hectares, untouched for years.

“Some of the coal is still mineable at current prices, so it’s a good asset,” he adds, citing coal exported from Newcastle, New South Wales, which is fetching about US$52 per tonne – “more than oil” (priced about the US$30 per barrel level).

He also stresses that there need be no contributions to climate change from mining the Mokau. Existing technologies – including carbon capture and storage (carbon sequestration) for carbon dioxide or other forms of carbon, as well as other artificial processes – mean all the constituents of coal can be used as feedstocks for power stations, petrochemical plants, and the like.

“It would be possible to have a coal generator in New Plymouth with no emissions … and coal gasification to remove all chemical contaminants; it’s been done in South Africa for decades.

“These [plants] often have an economic use, especially producing sulphur for fertiliser … the gas can be stored in depleted gas fields or used to help ‘push’ petroleum from fields.

“This is all existing technology already in use,” he says, citing Contact Energy storing gas at its Ahuroa reservoir facility in Taranaki and the fact that the Taranaki energy industry has been reinjecting gas to help boost liquids recovery – crude oil and condensate (light oil) – for decades.

And he says the now Auckland based Sampson brothers want to live to see the fulfilment of their 40-year dream.

“We started in 1985 and have been frustrated by all sorts of things, including having to take the government to court a couple of times … but we have people, consultants, ready to step in if we don’t last to see this project through,” concludes Murray, taking a longer-term view and citing a recent Exxon market forecast that coal, though slipping, will still be the world’s third-largest source of energy in 2040.

Eleven mines operated in the Mokau coal field between 1884 and 1987 and the original.

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