Solid Energy benefits from soaring world prices

Soaring world coal prices have put state-owned Solid Energy on track for a bumper 2005/2006 financial year, according to a news report today.

The Press newspaper reported that new contract prices for coking coal have leapt from US$57 ($79) a tonne to US$125 a tonne. The new prices will take effect from April and July.

Chief operating officer Barry Braggs told The Press they were the best prices for about 25 years.

The company's export volumes would rise from 2.2 million tonnes to 2.7 million tonnes in the upcoming year, but demand was outstripping supply by two to three times.

Mr Braggs said the company planned to reinvest as much as possible in the business. Solid Energy has earmarked about $80 million for capital expenditure.

The new Cypress Mine in the Buller district is slated to open within 18 months, but the granting of its resource consent has been appealed in the Environment Court.

For the year ended June 2004, Solid Energy posted a net profit of $33.7 million, down from $56 million the previous year.

Meanwhile, Solid Energy's recruitment drive for skilled British miners has met with a positive response. Two weeks after advertising in Britain the company had fielded 270 inquiries, which so far has resulted in 77 applications.

Solid Energy is looking for workers for its Spring Creek underground coal mine near Greymouth.

The mine has about 130 workers and average monthly production of 66,000 tonnes, much of it for export.

Solid Energy began advertising in Britain two weeks ago -- apparently to take advantage of the recent decision by UK Coal to close its Ellington Colliery in Northumberland because of flooding. It sought mine workers, face workers, development operators and electricians.

Solid Energy said it was not turning its back on New Zealanders, but it needed skilled miners quickly and could not afford the years of work and training needed to bring inexperienced workers up to scratch.

- NZPA