Solid Energy to close Huntly East coal mine

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Image credit: Solid Energy website

State-owned New Zealand coal mining company Solid Energy has announced plans to close its Huntly East coal mine.

Image credit: Solid Energy website
Image credit: Solid Energy website

Huntly East is being shut down after nearly 40 years; 68 workers will lose their jobs.

Solid Energy said that the decision to close the mine was reached after it was determined that the mine had no prospect of returning to profitability and was unsalable.

“In September 2013, Solid Energy undertook a major restructuring at Huntly East Mine. The company said it would keep the mine going in a small way, at least-cost, because at that time the view of industry analysts was that the market would start recovering in a year or two,” said Chief Executive, Dan Clifford in a media release.

“In fact the situation has continued to deteriorate and Huntly East Mine is now deeply unprofitable, costing in the order of $500,000 a month to keep open. Because the company does not need the mine’s production to meet our current or expected customer demand, and because there is no prospect the mine can be run profitability, we have determined it has no chance whatsoever of attracting a buyer. We therefore must act to stem these losses.”

Huntly East Mine began producing coal in 1978; since the September 2013 restructure, the mine has been producing 100,000 tonnes of coal a year.

The company is expected to make the final decision by Thursday, 22 October 2015.

“Directors recognise that if this goes ahead as proposed, it will be the end of an era, and not just for our staff members at the mine. Many, many people have connections to Huntly’s underground coal mining history and mining in the past has played a very important part in the economy of the region. This is but one of many difficult but important decisions that directors have had to make in recent months,” said Solid Energy Board Chair, Andy Coupe.

“This decision, however, should not be read as the end of underground coal mining in New Zealand. This individual mine has been in work for almost 40 years and over that time the working faces have moved further and further from its portals and deeper underground. So while this mine has no prospect of returning to profitability, that is not to say that underground coal mining may not be profitably done again in the future with a different set of conditions.”