The Government knew of Solid Energy's failed diversification plans in 2009, Prime Minister John Key says.
The state-owned coal miner was wanting to become a natural resources company from about 2007.
National refused a capital injection of about $1 billion in 2009 but the company went ahead with "baby steps", Key said.
He said he would be surprised if the company was today worth more than it owed.
Problems within the company were discovered in 2011 when a scoping survey was conducted in the lead up the Government's mixed ownership model.
It wanted to sell up to 49 per cent in Solid Energy and other state-owned energy companies.