Quarrying & Mining Magazine

Solid Energy sells assets

Solid Energy has settled the sales of two of its South Island mines as it winds up the company and sells off assets. By Peter Owens.

On April 7 2017, the company’s solicitors completed the legal settlement of the sale of Solid Energy’s Ohai and New Vale mines to Greenbriar. The transaction saw all of the mines’ current employees and operations transferring to the new owner.
Chief executive Tony King says that in the circumstances the settlement of the sale of the mines is an extremely pleasing outcome. “The mines are transferring into very capable hands and an experienced and dedicated workforce is being retained. It is the best possible result for our people, our customers, the local communities and the Southland economy.”
Greenbriar is owned by the Palmer MH Group, a privately-owned South Island resources group, with diverse, well-established interests in mining and quarrying operations. New Vale Mine is at Waimumu, south-east of Gore. Ohai Mine is located 80 kilometres northwest of Invercargill at the base of the Takitimu Mountains. Both mines supply a wide group of customers including the meat and dairy industry, other industrial and commercial organisations as well as schools and hospitals in the region.
Solid Energy was also expecting settlement of West Coast assets purchased by Birchfield Coal Mines and Moore Mining by now. Settlement with BT Mining (a joint venture of Bathurst Resources and Talley’s Group) for the Stockton export coal operation, and the two Waikato mines, Rotowaro and Maramarua is expected in June/July.
The assets sold to Birchfield, a local West Coast mining business, are: Strongman Mine, Island Block Mine, the Reefton Distribution Centre, and the Mt Davy Mining permit.
Staff have been advised that current mining operations at Reefton would stop very shortly. This operation affects 15 permanent employees and a small number of casuals. Solid Energy expects that a number of these staff may be employed by the new owners once workforce requirements have been worked through. King says it is pleasing to see the assets retained in local hands as active operations, with some prospect of re-employment for staff who have worked under a long period of uncertainty.
Settlement with Moore Mining for the Reddale Mine, Burkes Creek washery and related assets (near Reefton) is expected about now.
While Solid Energy has been successful in shedding most of its major assets, an exhaustive sales process, it has been unsuccessful in securing a buyer for Spring Creek Mine near Greymouth and has reluctantly taken the decision to close the mine. This mine has been in care and maintenance since 2012 when production was stopped following a review of the mine’s economic viability. It will now be sealed to place it in a safe and secure state. The associated nearby Rocky Creek coal washery will be offered for sale to interested parties on a standalone basis, now it is clear that the mine will not require its capacity.
Tony King says that the mine closure is a disappointing outcome but became inevitable in the face of volatile coal market conditions coupled with the significant capital required to get the mine back into operation. He says, “We had maintained a level of optimism through the sales process that a buyer would recognise the potential for economic redevelopment of Spring Creek Mine, however that simply hasn’t happened. Interest in the site has been muted throughout an extensive sales process and closure is now the only remaining option.”

This article first appeared in Q&M‘s June-July issue.

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