The chief executive of New Zealand’s state-owned coal miner Solid Energy says the company’s Stockton mine on New Zealand’s South Island near Westport is expected to produce coal for as long as 20 years rather than the three to five years it previously thought.
"There is a lot of coal left at Stockton, more than 20 years worth in the future,” Don Elder told a meeting in Westport on Monday, “but [some of] it is in new pits or blocks that are either lower quality or much deeper or much more difficult to mine, and under historical prices wouldn't have been economic.” Mr Elder added that with rising energy and commodity prices even some of the more difficult blocks are economic if mined efficiently.
The company is basing its economic judgment on an annual benchmark price for 2010-11 of US$180-200 per tonne. At those prices Stockton has at least 15 years worth of coal and possibly even 20 years.
In October Solid Energy began a five-year alliance with Downer EDi Mining at Stockton, which remains a focus of investment. The alliance has awarded a $63 million equipment supply package to the Gough Group.
Elder said it would take until the middle of this year 2010 before the company would reveal its plans for one of its bigger projects – a potential $1.5 billion coal to fertiliser or urea production plant.
"The only thing I would comment is that none of the work we've done to date has identified the major red flags that say we should be giving guidance that this thing is dying."
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