Mataura briquette plant to continue operations

MARTA STEEMAN
Last updated 13:17 20/06/2013

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Solid Energy's $30 million lignite to briquettes plant at Mataura has had a reprieve although Solid Energy will not be a long-term owner.

Local workers had feared it might be closed.

Solid Energy acting chief executive Garry Diack said today the coalminer did not see itself as a long-term owner of the plant, but Solid Energy and GTL Energy were continuing with the operations.

They wanted to demonstrate the plant's capabilities and technology and establish its value.

The plant uses Australian company GTL Energy's technology to convert lignite to briquettes and had completed sustained production runs leading to the plant's commissioning in May.

The two companies are assessing commercial arrangements for its future and had agreed on a range of options.

GTL Energy leased the plant from Solid Energy and took over its operation in February after the state coalminer's financial woes deepened.

"Although we will continue to mine and market New Vale lignite it is now certain that Solid Energy will not be continuing with lignite upgrading in the foreseeable future," Diack said.

"While we continue to believe the lignite briquettes produced with GTL Energy's technology have good potential, given our current status, Solid Energy does not see itself as the long-term owner of the plant.

"We eventually want it in the hands of someone who can advance the technology to commercial reality and make it a success," Diack said.

GTL Energy chief executive Fred Schulte said continuing to run the plant would underpin the use of the technology globally and was important for a large-scale project under development in Indonesia.

It would also show if there was a deep market in New Zealand for the briquettes.

"Ultimately the long-term future of the Mataura plant will be dictated by the local market, however the immediate near term sees a continued production phase, and product sales," Schulte said.

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