Mataura may get lignite factory

BY SONIA GERKEN IN GORE

A processing plant that makes lignite burn hotter and cleaner could be operational in Southland by late next year, Solid Energy said.

The Government-owned coalmining company yesterday announced a joint venture with Colorado-based GTL Energy Ltd to investigate the feasibility of building a briquetting plant in the former paper mill at Mataura, 10km east of its New Vale coal mine.

The plant, the first of its kind in New Zealand, would create about 10 jobs and process an estimated 100,000 tonnes of lignite a year. Solid Energy mined 240,000 tonnes of lignite from the New Vale mine during the past financial year.

Solid Energy communications director Vicki Blyth said the company would finish technical and economic feasibility studies, complete engineering designs and apply for resource consents during the next few months.

The decision to proceed was expected to be made early next year and would be based on demand from South Island industrial and commercial customers, she said.

The briquetting process removes moisture from lignite, which raises the thermal value and reduces emissions.

Solid Energy new energy general manager Brett Gamble said GTL Energy's technology would provide a higher grade and cleaner energy source.

Upgrading lignite offered a great opportunity to use New Zealand's vast and relatively untapped Southland resources, he said.

Ms Blyth said the lignite briquettes could be used for home heating and the feasibility of trucking briquettes to the closed Ohai Mine, to be bagged for the home market, would be investigated.

It was a better option to truck the briquettes to Ohai than shift the bagging plant to Mataura given supply to the home market may be for only a short time, she said.

Solid Energy remained committed to withdrawing from supplying coal to the household market by the start of 2013, in line with the National Environmental Standards for air quality. However, that date could change given the Government's announcement it would review the timing of implementation of the standards.

Ms Blyth said she did not know the cost of setting up the plant at the disused paper mill.

Gore District Mayor Tracy Hicks said it would be good to see the paper mill, which has sat in a forlorn state for a few years, get a new lease on life.

The investment in new technology and creation of employment was all good news, particularly in these times when everyone talked about recession, he said.

- © Fairfax NZ News