Solid Energy paying above market rates for Southland Ltd

By NZPA

Monday 26th February 2007

State-owned coal miner Solid Energy is reported to have been paying above market rates for Southland farms to give it access to lignite resources.

The company said it has had an "active" programme of land purchases over the past 18 months.

Southland Dairy Farmers of New Zealand conference delegate Rod Pemberton told The New Zealand Herald it appeared Solid Energy had been paying above market rates for beef, dairy and sheep farms around the Mataura opencast mine near Gore.

Solid Energy's communications director Vicki Blyth would not say, for commercial reasons, how much land had been bought or what price had been paid.

But it has been estimated that Solid Energy has spent tens of millions of dollars so far.

The Mataura mine itself was closed in 2000. But, this month, the company announced it was undertaking a six-month drilling programme in the area to further define its coal resources.

Solid Energy says the land acquisitions -- as well as its mines -- have given it access to 600 million tonnes of coal, mostly lower-grade lignite.

Meanwhile, on Friday, Solid Energy said a major new phase had started in a carbon dioxide capture and storage project carried out by the Australian-based Cooperative Research Centre for Greenhouse Gas Technologies, to which Solid Energy had committed more than $A2 ($NZ2.26).

Many scientists consider carbon dioxide created by human activities is contributing to a warming of the planet, and are worried at the potential impact of that warming.

The Australian project is drilling a new well at Otway Basin in southwestern Victoria to test whether carbon dioxide can be safely stored there.

Solid Energy said its commitment to the project was part of a 20-year, $100 million investment it was making in clean coal technology and new energy developments.

New Zealand had vast opportunities for underground storage of carbon dioxide, including in depleted gas reservoirs and in deep coal seams, Solid Energy said.

If this country was to exploit its huge lignite reserves, it needed to work to address the challenge of carbon dioxide.

Comments from our readers

No comments yet