Prime Minister John Key has no objections to lignite being dug up and turned into briquettes near Mataura and thinks a balance can be struck between environmental impact and economic development.
Speaking in Invercargill yesterday, Mr Key said he supported Solid Energy's plan to dig up lignite and turn it into briquettes, saying the Government wanted companies such as Solid Energy, which is Government-owned, to expand.
"At the moment companies like Solid Energy are growth companies and we want them to expand in areas like lignite conversion," Mr Key said.
Solid Energy has proposed a $25 million pilot plant, 2km south of Mataura, processing 148,000 tonnes of lignite a year into 90,000 tonnes of briquettes.
It was not a "massive" investment, but there was a lot of opportunity for development of lignite into urea and diesel in Southland so it would be interesting to see how the plans progressed, he said.
"We know there is lots of resource there and we know they potentially have the capability [to convert lignite to urea or diesel] and so we will see how that progresses, but the briquette plant is a good starting point."
Solid Energy's plans have received a lot of opposition from various parties nationwide because of the potential environmental impacts of the lignite.
However, Mr Key said companies were controlled by Government regulations and so there were always environmental obligations that needed to be met.
The prospect of Solid Energy being partially sold off, as stated in the Budget, would not make a difference to its environmental impact either because these regulations would still apply, he said.
Meanwhile, when asked about the degradation of the Waituna Lagoon and national waterways, Mr Key said he supported Fonterra's nationwide action to not pick up milk from farmers not meeting environmental regulations.
Water quality was a problem around New Zealand and the Government was addressing the issue, but the agriculture sector was important and looking at quality worldwide, the nation's was eclipsed only by Iceland, he said.
"That doesn't mean we don't have work to do – [but] we are confident of making improvements.
"We do actually think we can grow the economy and look after the environment, but obviously it is incumbent on us to have the right rules to follow that ... I've always believed we can balance our environmental responsibilities with out economic opportunities," he said.
The lagoon is under threat of "flipping" from a high-value clearwater state to an undesirable turbid, algae-dominated state because of excessive inputs of nitrogen, phosphorus and sediment from land use intensification.
Mr Key was in Invercargill to open the new $14.5m WHK building and Southland Disability Enterprises' new $2m recycling plant.
- © Fairfax NZ News
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