Why is Solid Energy acting like an American coal robber baron from the 1920s?
The recent decisions by Solid Energy to put the Spring Creek coking coal mine on to care and maintenance and stop the development of the half sunk ventilation shaft at the East Side mine will have horrendous consequences for the West Coast and the Huntly regions. These regions are already hard hit, especially the Coast after the deaths of 29 Pike River men in a gas explosion on 19 November, 2010, and the loss of over 300 Pike jobs.
Coming with the decision to dismiss many other staff at its headquarters and elsewhere it looks like a panic restructuring brought on by crisis. State Owned Enterprises Minister Tony Ryall told Solid Energy unions on Tuesday that the company had debts of over $300 million. This was news to the men. He made this sound highly significant but in financial terms it is not. It may be that the debt accumulated without the Government being aware, but that is because of the remote, revenue-collector role they chose to play.
Solid Energy has made a hefty $614.3 million profit over the last 10 years, with $394 million in the last five years alone. Government has had its pound of flesh big time. Why then is this state-owned enterprise acting more like an American coal robber baron from the 1920s and despoiling whole communities?
Both Mr Ryall and Prime Minister John Key have taken up the refrain of Solid Energy's Don Elder that it's all because of the collapse in international coal prices, which are priced in US dollars. Apparently, Spring Creek can only get $120 per tonne now and its production costs are high, partly because it is going through a development phase into new reserves. So over 300 miners in an area of high unemployment are to be sacrificed and there is nothing the Government can do.