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Solid Energy lowers workforce prediction

By NZPA

Wednesday 20th November 2002

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Solid Energy looks likely to need only half as many extra workers as predicted for its expanding mine operations on the West Coast.

The state-owned coal miner had previously said it would need 250 to 300 more West Coast employees over the next few years. But a partly-finished study suggested it could halve that figure by transferring workers between mines and staggering mine developments, chief executive Don Elder said today.

The study indicated the company would need an extra 150 employees, plus contractors, but even that number was a huge challenge for Solid Energy to find, Dr Elder said.

Nationwide, the company employs about 430 full-time staff.

Dr Elder confirmed that coal transport from the West Coast remained Solid Energy's biggest problem. Transport accounted for half of the company's costs from mine to market.

Export coal prices were expected to fall 2 percent a year, so Solid Energy had to reduce its own costs that much to stay competitive.

It was looking at exporting coal through Shakespeare Bay, near Picton, and had agreed with Port of Marlborough to develop plans for coal handling facilities for up to 500,000 tonnes a year by 2003/04.

If rail costs increased, barging to Port Kembla from Westport and exporting from Shakespeare Bay would become more attractive.

"If the rates were really going up, dare I say it, you'd come back to the (Granity) coal jetty," Dr Elder said.

Solid Energy has resource consent for a deep water jetty at Granity, north of Westport.

Dr Elder said Solid Energy needed to develop a new mine every 12 to 18 months at an average cost of $50 million each.

It had six new mines on the drawing board, including two in Buller, and all were due to begin in the next six or seven years.

It had no further plans to contract out mine operations, at it had successfully done with Australian company Henry Walker Eltin at the Stockton opencast mine on the Denniston plateau, above Westport.

"It's a good approach for big opencast mines, or in some cases small opencast mines. We believe underground mining is our core business. We do it better than anybody else, especially in New Zealand conditions," he said.

Solid Energy hoped to increase its exports of West Coast coal by 15 percent to 2.1 million tonnes this financial year, and to 4 million tonnes a year by 2008. Solid Energy had a record after-tax surplus of $38.1 million in the year to June, up from $6 million the year before.

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