Solid Energy plans to end coal supply to domestic market

1.00pm

Solid Energy aims to stop supplying coal to the domestic market within two years, chief executive Don Elder said yesterday.

Inefficient domestic coal and wood burning was bad for the environment and hurt the coal industry's image, Dr Elder said.

He was speaking at the annual conference of the New Zealand branch of the Australasian Institute of Mining and Metallurgy (AIMM) in Nelson.

Dr Elder would not say how much the domestic coal market was worth to Solid Energy.

It had a high profit margin, but was relatively small, he said.

An opinion poll on coal throughout New Zealand showed South Island cities outside Christchurch had the lowest perception of coal and its effect on the environment.

The perception was better in Auckland and rural areas, Dr Elder said.

"It had everything to do with the colour of the air. And that's coming from open fires," he said.

Those people who saw the effects of wood and coal fires were the ones who campaigned against coal.

"In our industry, our dog is being wagged by the tail."

Solid Energy was looking at fuel alternatives and had bought a company that produced environmentally friendly fuel from wood waste.

Taking coal from the domestic market was not a radical step when looking at other western countries, where coal was rarely used, he said.

The chairman of AIMM's New Zealand branch, Dave Stewart, described Dr Elder's comments as interesting.

"They are brave from a marketing perspective and also innovative from an environmental management perspective, and it will be interesting to see what other coal producers do," Mr Stewart said.

Richmond Wood & Coal Supplies owner Ashley Kelly believed suppliers would source their coal from other mines.

"It wouldn't affect us too much. We only sell about 100 tonnes a year. Most of the business is in wood," he said.

Dr Elder said Solid Energy would publicise its move widely.

There were concerns that the benefits would be negated by other suppliers stepping in to the gap left by Solid Energy.

The industry could accept the principle, but would be judged by what happened, he said.

Meanwhile, Solid Energy would spend more than $100 million in rehabilitating mine sites throughout the country.

The policy had come not from government, resource consent compliance or national compliance and would take time to implement.

The company was setting itself up for enormous embarrassment and the possibility of failure, but it was necessary if the coal business was to be sustainable.

Standards would be applied to Solid Energy's subcontractors, customers, suppliers, colleagues and even competitors in the industry.

- NZPA