Solid Energy

Solid Energy New Zealand Limited

Company type	State owned enterprise
Industry	Coal mining, Energy
Predecessor	State Coal Mines division, Coal Corporation (Coalcorp)
Founded	1987
Defunct	16 March 2018
Fate	Liquidated; assets sold to multiple purchasers
Successor	Phoenix Coal Limited, Greenbriar, Birchfield Coal Mines Limited
Headquarters	New Zealand
Area served	New Zealand; Export markets: China, India, Japan
Key people	Don Elder (former CEO), Garry Diack (interim CEO)
Products	Coal, lignite briquettes, renewable energy projects
Owner	New Zealand Government (state owned)

Solid Energy stood as New Zealand's foremost coal mining enterprise and operated as a state owned enterprise under the New Zealand Government.

Emerging from the former State Coal Mines division, it was originally formed in 1987 as the state-owned Coal Corporation (Coalcorp) before being rebranded Solid Energy New Zealand Limited in 1997. In 2015, the company declared revenues of NZ$369.8 million and extracted 2.8 million tonnes of coal.

The firm’s primary operations were concentrated in the Waikato and West Coast areas. Approximately fifty percent of its coal output was exported, prized for its low moisture content, minimal sulphur, and reduced impurities. Major export destinations encompassed China, India, and Japan, where the coal was utilized in power generation, the production of coke, and steelmaking processes. On the domestic front, customers included the Huntly Power Station and New Zealand Steel based at Glenbrook.

In August 2015, Solid Energy entered into voluntary administration. By 31 October 2016, its assets had been divested to three distinct purchasers. The company was officially liquidated on 16 March 2018.

Coal operations

Solid Energy was responsible for roughly 85% of New Zealand's yearly coal production, amounting to about 4 million tonnes, with exports accounting for more than half of this volume.

Solid Energy Mines

Mine	Location	Type	Reserves (kt)	Annual Production (kt)
Huntly East	Waikato	Underground	7,000	100
Rotowaro	Waikato	Opencast	14,000	1,200
Stockton	West Coast	Opencast	16,000
Spring Creek	West Coast	Underground	18,000	mothballed
Terrace	West Coast	Underground	700	nil
Strongman	West Coast	Underground		closed
Reddale Mine	West Coast	Opencast		140
New Vale	Southland	Opencast		250
Ohai	Southland	Opencast	2,000

Plans were underway for Solid Energy to develop both the Cypress Mine and the Mt William North Mining Project.

In 2006, Solid Energy expanded by acquiring Newvale Coal Co Limited along with its Newvale opencast mine located in Southland’s Waimumu coal field. This mine provides lignite primarily for local industries, including supply to Fonterra's Edendale dairy facility. The defunct Terrace mine near Reefton was sold to Crusader Coal in December 2010. To bolster supply within the South Island, Solid Energy inaugurated the Reddale opencast mine near Reefton in October 2011.

Retrenchment 2011 to 2015

Solid Energy took over Pike River Coal in March 2012 after the latter entered receivership following the tragic Pike River Mine disaster of 2010; this transaction was finalized by May. The company faced public reproach in 2014 for deeming it too hazardous to re-enter the mine to retrieve remains. Subsequently, the government purchased the surrounding 3,580-hectare area and incorporated it into Paparoa National Park, establishing the Pike 29 Memorial Track to honor the 29 miners who lost their lives.

In August 2012, CEO Don Elder revealed a $200 million drop in revenue alongside an operational review. On 25 October that year, Solid Energy suspended operations at Spring Creek Mine resulting in 220 job losses. The financial report for June 2012 disclosed a $40 million deficit—a decline of 146% compared to profits made in 2011.

During December 2012, workers resisted proposals involving wage reductions and shorter working hours multiple times. Consequently, Solid Energy executed layoffs totaling 235 at Spring Creek, eliminated 163 positions at its Christchurch headquarters, and cut back by 60 roles at Huntly East mine. By January 2013, after extended negotiations, Stockton Mine employees consented to decreased pay and reduced working hours.

On 4 February 2013, Mark Ford, chairman of the board, announced Don Elder’s resignation with Garry Diack appointed as interim CEO. By late February, Solid Energy projected a further "significant loss" while its debt escalated to $389 million. Finance Minister Bill English distanced governmental involvement from the company’s challenges and terminated substantial executive bonuses.

While Solid Energy valued itself at $3.5 billion in 2011, subsequent assessments revealed an overvaluation by at least $2 billion. A restructuring effort in October 2013 introduced $100 million in equity—comprising 75% from banking institutions and 25% from government—with an additional capital injection of $103 million occurring in September 2014.

Voluntary administration and asset divestment

On 13 August 2015, the company entered into voluntary administration on a temporary basis, seeking creditor approval to suspend the majority of its outstanding debts. Should this have been sanctioned, Solid Energy intended to dispose of its assets as ongoing businesses in order to satisfy creditor claims.

By 31 October 2016, Solid Energy had secured sale and purchase agreements covering most of its mining properties with three separate organizations:

• Phoenix Coal Limited, a collaboration between Bathurst Resources and Talleys Group, which acquired the Stockton export coal operation along with the Waikato mines at Rotowaro and Maramarua, supplying the domestic market in the North Island;
• Greenbriar, controlled by Palmer MH Group, which took ownership of the New Vale and Ohai coal mines located in Southland;
• Birchfield Coal Mines Limited, a mining company based on the West Coast, which purchased the Strongman and Liverpool mines.

These transactions were finalized in early 2017.

Lignite conversion initiatives

In 2010, Solid Energy advocated for multiple lignite conversion schemes designed to unlock the value of Southland’s extensive multi-billion tonne lignite reserves by transforming them into higher-value commodities. The Southland Chamber of Commerce estimated in January 2011 that fully operational lignite-to-briquette and lignite-to-fertiliser facilities could generate employment for up to 2,300 individuals, providing a substantial boost to Mataura’s local economy.

Briquetting

A major initiative focused on converting lignite into fuel briquettes. A pilot briquetting facility was proposed at either the site of the former Mataura Mine or the old Mataura Paper Mill. By July 2010, Solid Energy announced successful briquette production trials in collaboration with US-based GTL Energy. Resource consents for constructing the Mataura briquetting plant were granted by Gore District Council by June 2011. Construction commenced around mid-2012 near State Highway 1, south of Mataura. The plant was engineered to convert 148,000 tonnes annually of low-grade lignite sourced from New Vale mine into approximately 90,000 tonnes of superior fuel briquettes, including a boiler facility designed to consume roughly 15,000 tonnes of lignite per year.

Fertiliser

Solid Energy investigated a project converting lignite into urea fertiliser through a partnership with Ravensdown. Initially engaged in a joint concept study, Ravensdown withdrew from further feasibility assessments in August 2012, thereby ending their participation.

Liquid fuels

The company also explored lignite gasification technology aimed at producing liquid fuels, collaborating with Australian firm Ignite Energy Resources Pty Ltd. However, this technology had yet to demonstrate commercial viability.

Environmental and economic considerations

In December 2010, Parliamentary Commissioner for the Environment Dr Jan Wright expressed criticism of lignite conversion projects due to their high carbon emissions intensity and questioned whether they qualified for free carbon credits under New Zealand’s Emissions Trading Scheme (ETS). Wright raised concerns regarding government subsidies potentially supporting outdated and environmentally harmful technologies.

By February 2013, plans to convert Southland lignite into diesel fuel, fertilisers, and burnable briquettes were discontinued due to financial constraints and depressed coal market prices.

Renewable energy activities

Solid Energy had made substantial investments in developing renewable energy projects within New Zealand; however, a major organizational overhaul commenced in the middle of 2012. The biodiesel segment was separated into two distinct entities: Biodiesel New Zealand, responsible for biodiesel production, and Pure Oil NZ, which oversaw agricultural business activities.

Switch, a distributor specializing in wholesale wood pellet fireplaces and Apricus solar water heating systems, was merged into Nature's Flame, a manufacturer of wood pellet fuel. Operating as an independent unit but remaining under Solid Energy’s ownership, Nature's Flame focuses on producing wood pellets designed for residential heating. The company markets its pellets as environmentally sustainable, highly efficient, and compliant with air quality regulations. As noted in Solid Energy’s 2008 Annual Report, Nature's Flame held the position of the largest wood pellet producer in the Southern Hemisphere. The firm’s origins trace back to 2003 when Solid Energy acquired a small wood pellet company located in Rolleston.

Additionally, Solid Energy sought resource consent to construct a hydroelectric power plant at its Stockton Mine site.

Opposition groups

Solid Energy’s activities, especially at the Stockton Mine, have attracted environmental scrutiny. In 2006, the Parliamentary Commissioner for the Environment announced plans to evaluate the company’s environmental performance in 2008.

Criticism came from organizations such as Ngawakau Riverwatch, Greenpeace, Forest and Bird, The Buller Conservation Group, and the Save Happy Valley Coalition. Concerns raised included carbon emissions, ecological harm, and accusations of greenwashing related to mining operations.

Despite objections from the Save Happy Valley Campaign (SHVC), which highlighted risks like acid mine drainage, climate change impacts, and threats to the Powelliphanta snail species, resource consents were approved for the Cypress mine near Waimangaroa.

In 2007 and 2008, reports surfaced indicating that Thompson and Clark Investigations Ltd., commissioned by Solid Energy, employed private individuals to monitor SHVC activities covertly. Solid Energy denied awareness of one particular attempt to engage an informant.

See also

• Energy in New Zealand

External links

• Solid Energy, CoalNZ – official corporate websites
• Nature's Flame, Biodiesel NZ, Switch – affiliated companies
• Save Happy Valley Coalition – opposition organization
• Solid Energy at SourceWatch