New man to lead Solid Energy development

BY MARTA STEEMAN

State coal miner Solid Energy has announced a new appointment to lead it through a decade of coal technology developments, including Southland's multibillion-dollar lignite to fuel project.

Yesterday Solid Energy said it had appointed Garry Diack to the new position of head of organisation development and strategy to lead the process. Solid Energy is expected to grow to more than 5000 staff and contractors, from about 1500 now.

Diack runs a consulting business, based in Christchurch. He had been involved in performance improvement, governance and growth-related activities in leading New Zealand and Australian corporates including Fonterra, News Ltd – the Australian media business controlled by Rupert Murdoch – and Tait Electronics, Solid Energy said.

Chief executive Don Elder said the company would become a large and diverse business in energy products.

"As a result, we need to significantly advance our organisation structures, capabilities and systems. This process will be led by the head of organisation development and strategy."

Solid Energy had expanded more than five-fold in the past 10 years, from 300 people working in its mines to 1500 now.

Its revenues had grown from $150 million to $1 billion this year.

Big projects requiring thousands of new staff are:

The turning of lignite in Southland and Otago into briquettes for export overseas.

The turning of lignite through gasification into urea, a fertiliser.

The turning of lignite through gasification into diesel.

Coal seam gas production at Huntly for sale to industry and households.

Underground coal mining at Huntly to produce gas that suits electricity production.

In Southland, the three lignite mining projects would take about 10 years to develop, Elder said.

The first project was turning water-laden lignite into briquettes for export. The technology for that was being trialled in the United States.

If it went well, the company would make a decision mid year on investing in a briquette plant, which would begin production next year.

It would start by exporting 100,000 tonnes of briquettes and later ramp up production to one million tonnes.

The lignite to urea project was the second stage and the lignite to diesel project was the third. They would require a "huge" work force with different skills. In the North Island, at Huntly, Solid Energy had trialled the production of coal seam gas and was intending to develop that. It was in the design phase for drilling 10 to 20 wells from the end of this year.

It would produce a high quality natural gas for use by industry and households.

Solid Energy expected to use the North Island gas pipeline to get the gas to market.

It was looking at permits in Taranaki as well to produce coal seam gas.

It was also going to trial the latest technology for underground coal mining and gasification in Huntly.

Elder said it expected first gas from that at the end of this year and it was a lower quality gas more suitable for electricity production.

That suited coal that was deep underground and expensive to mine.

Elder said 2000 to 3000 people would be required during the three phases of construction of the lignite mining projects.

It needed to be carefully planned and managed and that would be Diack's role.

The discussion about finance for these capital-intensive projects was continuing.

Long-term and project finance and finance from other parties could be part of the mix, he said.

The Government was "open" to supporting state-owned enterprises wanting to grow, but Solid Energy had not talked about the Government contributing funding to any of its proposals, Elder said.

- © Fairfax NZ News