If anything useful has been learned from the Labour Party's pursuit of Solid Energy, it is that there are severe limits to the present Government's asset sales. The Prime Minister admits that while it was not willing to finance the state coal company's big expansion plans, nor was the Government willing to let the company find a private investor of sufficient scale to finance its ambitions. For the sake of political safety, the partial asset sales were to be strictly designed for small domestic shareholders, not for a parcel of 10 per cent or more that an enterprising investor in Solid Energy would need.
Late last week, the Prime Minister's office released briefing documents it received in 2010 on the company's proposals. They were released in response to Solid Energy chairman John Palmer's denial that the company had asked for an injection of $1 billion from the Government, as John Key recalled. The record shows that Solid Energy was seeking cumulative investment of $27 billion at $2 billion to $3 billion a year.
But the documents are more interesting for what they reveal about the company's ambitions. Coal was still a booming industry in 2010, one of the few to be surviving the global financial crisis, thanks almost entirely to China's continuing steel production. The boom encouraged the board of Solid Energy to do some grand strategic planning.
Looking to the future, it felt the world was entering a transition from fossil fuels to renewable technologies. In the interim, the board believed "super profits" would accrue to those able to exploit a range of natural resources that New Zealand has in abundance. It proposed to metamorphose into a diversified developer of all of them - not just coal but oil and gas, methane hydrates, lignite conversion to urea and diesel, iron sands mining and even steel production.
Borrowing a Key phrase, it believed it could drive a "step change" in the country's economic performance.
