Miner puts farmland on market
Solid Energy wants to sell 920 hectares of Southland farmland, although it plans to retain rights to the brown-coal lignite under the surface for mining in about 30 years.
The state-owned miner has put about 1000ha of farmland on the market following last year's review of its holdings and operations and subsequent massive restructuring. That was sparked by falling coal prices and a $40.2 million loss for the year to June and left 450 staff out of work.
Most of the land is a 750ha block run as two dairy farms west of Mataura, the Southland town where Solid energy built its $29-million lignite briquette plant.
Another 170ha dairy block at Waitane rounds off the Southland land, with the remaining 80ha relatively small surplus land parcels around the country.
The Southland properties were bought to secure their lignite deposits. Lignite is the lowest grade of coal which the company planned to convert into higher-value products. The company holds just under 3800ha of land in Southland for its lignite projects.
The Mataura briquette plant was the first phase of the lignite plan and the company hopes to secure a partner to fund and develop a coal-to-fertiliser plant and business. A plan to build a lignite-to-diesel refinery has been shelved.
Solid Energy said the Southland land was being sold on the condition that it keeps the rights to mine the lignite. Access would not be needed for 30 to 40 years as it had enough eastern Southland lignite reserves to last till then.
"The land disposal does not compromise our ability to site a plant or a mine at Mataura. We are still working through the process of finalising our preferred sites for the plant and mine."
A Southland real estate agent, who did not want to be named, said he had heard a price of $20 million thrown around the market for the 750ha block.
However, he was not sure whether that included Fonterra shares and stressed it was a rough figure he considered to be on the high side.
- Fairfax Media