Our goal of coal staying in the hole: achieved!
Press release
22 February 2013—The Coal Action Network Aotearoa is celebrating the end of the nonsensical lignite project plans in Southland, after Solid Energy Chairman Mark Ford confirmed on national radio this morning that the company will drop the project.
When asked on radio about the lignite projects, Mr Ford said: “I think that is part of the non-core assets that we will be exiting from.”
“This was a ridiculous project from the outset: dirty, low-grade coal being turned into a product nobody wanted, digging up prime Southland farmland for coal that would simply end up in the sky, adding to the looming climate crisis,” said Kristin Gillies, CANA spokesperson.
“The people of Southland, just as the people of the West Coast and Huntly, have been sold broken promises by an industry that will do nothing for our economic future. Coal is a sunset industry and we need to wake up to this reality.”
Co-spokesperson for Coal Action Murihiku, Dave Kennedy, said there would be a huge sigh of relief from the growing local opposition to the project, which had so far only produced six local jobs, and would be taking the region in the wrong direction.
“Southland has so much to offer a green future for New Zealand, and we’re very happy that the coal here will be left where it belongs – in the hole, and the fertile soil can continue to be productive for generations to come.”
It is also highly doubtful that the briquetting plant in Mataura will be able to be sold: it has suffered a number of problems, has yet to be commissioned, and there is no market for the briquettes.
CANA also pointed out today that it was wrong for people to put Solid Energy’s financial woes down to its investments in renewable projects.
Renewable investments were tiny compared to the other things that lost Solid money. P45 of the 2012 annual report discusses “impairments” (the reduction in capital value of parts of the business – similar to a write down?)
- Biodiesel resulted in an impairment of $9m;
- Natures Flame $24.5m, Switch $1.6m.
- total renewable impairment $36m.
Meanwhile:
- Spring Creek resulted in an impairment of $64.3m,
- Huntly coal seam gas $18.5m,
- Huntly East $33.5m,
- they wasted $29m on the Southland lignite briquetting plant that may never work and may never have markets, though this is not marked as impaired in the accounts.
Even without the lignite projects (and the Annual Report notes impairment and loss from the whole Iignite project) total coal impairment is ~$116m, 3.5 x that of the renewable losses.
“To blame renewable energy for Solid’s woes simply doesn’t stand up,” said Gillies.
Solid bought 49% of the shares in Spring Creek as recently as Feb 2012, closed it temporarily to upgrade the mine, then closed it permanently later in the year. They spent a capital outlay of $64m – and they never got any coal out of it.
The failure of the renewable energy plants can be laid at the door of the govt. The investments were made under the Labour govt when there was a biofuel obligation coming on all motor fuel sales; this was then replaced by National’s subsidy, then that was cancelled.
Coal and gas would have been more expensive under the 2008 ETS and there would have been a better market for pellets. The company also made the mistake of going for the export market for pellets when they could have developed a good market in NZ.
