Solid Energy plans for Rotowaro contract expiry

15 March 2011

Solid Energy plans for Rotowaro contract expiry

Resources company Solid Energy has started planning for the continuation of operations at its Rotowaro Opencast coal mine ahead of the expected expiry of the current mining contract later this year.

A contract with HWE Mining to provide equipment and personnel to remove overburden (soil and other material above the coal), extract coal and rehabilitate the mine site is set to end on 30 November 2011. Depending on demand, Solid Energy expects operations at the mine to continue through to around 2017.

Solid Energy is therefore assessing options to mine the remaining estimated five million tonnes of coal at Rotowaro and to effect a smooth transition from the current contract. Both contract mining and owner mining options are being assessed.

As well, Solid Energy continues to consider other North Waikato coal resources to support current and future coal supply contracts. These include potential resources at Ohinewai and at Maramarua, where the company is in the initial stages of testing the suitability of coal from the Kopako pit for use at the New Zealand Steel (NZS) plant at Glenbrook. The majority of coal extracted at Rotowaro is contracted to NZS, and to Genesis Energy to generate electricity at the Huntly Power Station.

“The final outcome and much of the detail surrounding our current study is unlikely to be known until much nearer the middle of the year,” says Chief Operating Officer, Barry Bragg. “We are committed to mining in the North Waikato and to as smooth a transition as possible to whichever mining solution is selected as most appropriate for Rotowaro. The option that best suits Solid Energy’s financial and risk criteria will be chosen.”

HWE Mining is a subsidiary of Australian-owned contracting services company, Leighton Contractors, has operated the Rotowaro mine in the Waikato since 2006.

What is the difference between contract mining and owner mining?
• Under contract mining the contractor provides plant, equipment, personnel and all services required to remove overburden (soil and other material above the coal seams), extract the coal and rehabilitate the site to the owner’s mining plans. In general under contract mining, equipment operators and maintainers are employed by the contractor rather than the mine owner/operator.
• If Rotowaro were in an owner mining situation, Solid Energy would operate the mine through being in direct charge of the people, plant and equipment. Aspects of the mining operation would remain sub-contracted, for example equipment maintenance and drill-and-blast operations.

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