Failed state-owned coal company Solid Energy may no longer be hitting the headlines, but that doesn’t mean there’s nothing going on – far from it. And the consequences may be very serious.
Our sources on the West Coast tell us that between 15 and 20 groups of potential buyers, mainly from India, have been through Solid Energy’s big Stockton mine there.
We also know that Bathurst Resources, the Australian coal mining company that fled Australia and set up in New Zealand, and which has managed to make a fearful mess of the unique and biodiverse Denniston Plateau in the course of a largely failed attempt to extract coal from it at an economic price, is trying to buy Stockton.
Republic Investment Management of Singapore recently bought a 20% stake in Bathurst Resources, and they are seeking to acquire more, possibly with a view to taking a controlling interest. This has allowed Bathurst to raise funds in relation to “an impending NZ coal opportunity”, which we believe may be the attempted purchase of Stockton and other coal deposits which Solid Energy has the rights to but has not attempted to mine.
As the industry mouthpiece NZ Resources notes (24 June 2016), “for coal in NZ this is fire sale season”.
On one level, that’s a good sign: it reflects the parlous state of the coal industry both domestically and internationally, and the growing acknowledgment that King Coal, bruised and weakened but still dangerous, must be prised off his throne.
But fire sale season carries a high risk: with the backing of their mystery overseas investors, Bathurst – or one of the companies that has toured Stockton – might be able to take advantage of those fire sale prices to sweep up a bundle of former Solid Energy assets and bundle them with its own resources, such as the nearby Denniston mine.
Bundling Stockton, Happy Valley (adjacent and now being mined), the Escarpment mine on Denniston, and the proposed Te Kuha would create an asset large enough to interest a big overseas miner. Then, taking a cavalier approach to the environment and worker safety alike (as the record shows occurs in India), they might seek to claw what coal they can from the ground while there is still a buck to be made.
Whereas the coal industry in China has been in decline in recent years, in India , coal is still trying to expand. If we are not vigilant, we might end up with a future in which Indian steel mills and cut-rate New Zealand milk powder plants alike are supplied by coal made cheap enough to mine by Solid Energy’s past recklessness and the Government’s continued avoidance of real action on climate change.
This story has been hiding away in the shadows. It’s time for it to be brought into the light.