From the Westport "The News" Monday 24th Sept, front pageBy Tui...

From the Westport "The News" Monday 24th Sept, front page


By Tui Bromley of the Greymouth Star

The West Coast’s second largest coal producer
says the drop in international coal prices that Solid
Energy blames for the possible closure of Spring
Creek was “all very predictable”.
Solid Energy has been shedding staff all over
New Zealand to help balance the books as it grapples
with a steep fall in international coal prices and
an expected cut in annual revenues of about $200
million.
However, Francis Mining Company Ltd director
Brent Francis said it was business as usual for
the 32 men operating the Roa underground mine,
30km north-east of Greymouth.
“The current market squeeze was all very predictable
and we provisioned for this at Roa,” he
said.
“Coal sales, like everything else, are cyclical and
we have had some pretty good times in the past
few years so a drop-off was always expected.”
Mr Francis said management was taking advantage
of the situation by developing new areas of
the mine while the price was low, and would switch
back to full production when the price rose again.
A small proportion of Roa coal is mined by the
opencast method but the bulk is from underground
mining and Mr Francis said that would continue.
Solid Energy has hinted that it wants to move
away from underground pits, including the big
Spring Creek Mine at Dunollie.
“We are probably going against the grain there
but Roa is a good mine, well managed and we are
very happy with it. We still see our future as an
underground mine,” he said.
Roa Mine produces about 150,000 tonnes of
coal a year for export mainly to Japan, China and
India but also South America and Europe; most is
used by foundry coke producers.
In 2006, Francis Mining signed a 10-year deal
with Solid Energy to transport up to 150,000 tonnes
of coal a year to Lyttelton for blending with Solid
Energy coal for export.
He said the predicted mothballing of the Spring
Creek Mine would not affect that contract because
Roa coal was blended with Stockton coal.