Mining rights unlikely to affect farm sales

TERRI RUSSELL
Last updated 05:00 20/02/2013

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Solid Energy's decision to sell farmland and keep mineral rights for mining would not turn away potential buyers, a Southland rural agent says.

About 1000 hectares of farmland near Mataura have been put on the market, and the mining giant plans to retain rights to lignite resources under the surface for about 30 years.

Last year, the company reviewed its land holdings after a drop in coal prices and a $40m loss for the year ending June 2012.

Southern Wide Real Estate director Philip Ryan said potential buyers would not be put-off if it were reserved for mining because about half of Southland had mineral rights.

"There are very, very few farmers in Southland that would own their own minerals under the ground," he said.

It was mainly owned by the Crown and state-owned Solid Energy, who could not just "come and kick them out", Mr Ryan said.

Solid Energy would need to apply for resource consents and pay compensation to landowners to access the minerals.

A Solid Energy spokesman said lignite in Southland, unlike other parts of New Zealand, was never nationalised and there could be different owners of the surface land and minerals.

Despite selling-off more than a quarter of its land, the company's lignite developments would not be compromised, he said.

Commissioning was on-track at the Mataura briquetting plant, there was enough lignite elsewhere in Eastern Southland, and there was the ability to have a plant or mine at Mataura, he said.

"The only thing that has changed is the company's financial situation which necessitated us to look for cash. The land being offered for sale has been judged as surplus to the company's immediate or near-term requirements," he said.

Gore District mayor Tracy Hicks said he had been given no indication that Solid Energy would pull out of proposed lignite developments in Southland.

"They still retain a significant footprint in the district."

However, the resignation of the company's chief executive, Dr Don Elder, this month, and resignations of six board members last year showed they were in trouble, he said.

"You'd have to be a blind man to see Solid Energy isn't facing some challenges on the financial front," he said.

terri.russell@stl.co.nz

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