Solid Energy's Terrace Mine in Reefton in Buller will probably close in less than a year.
Simon Doig, Solid Energy's general manager of south operations, said the future of the company's smallest mine had been in doubt for some time, The Greymouth Star reported today.
A number ofmining plans had been analysed over the past year to determine if it could be profitable and it would produce until at least mid-2009.
There was also a likelihood of further production if mining targets could be met and increased coal prices achieved.
"The mine has been scaled back over the past year and will be operating with a single shift," Mr Doig said.
"After reviewing a variety of mine plans and marketing options, we've decided that a limited amount of investment in development should be made to allow it to remain open until the end of June next year."
The prospects after that would depend on it hitting its production targets and achieving better returns for that production.
Solid Energy also operates a distribution centre at Reefton which processes and ships coal from a variety of sources.
The Terrace Mine currently employs 31 people at Reefton.
Originally a private mine, it was bought by Solid Energy's predecessor, Coal Corp, in 1988. It is producing about 40,000 tonnes of sub-bituminous coal a year for industrial and household markets in the upper South Island.
