Coal companies at loggerheads over Rotowaro mine excavators

MARK TAYLOR/Waikato Times

PRODUCTION THREAT: Solid Energy says a dispute with HWE Mining at Huntly's Rotowaro mine is threatening coal production at the mine.

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A contractual dispute between Solid Energy and HWE Mining is detailed in court documents, Solid Energy claiming HWE has pulled resources making it impossible to meet targets and endangering its supply to customers.

On July 29, Solid Energy failed to obtain an urgent interim injunction to prevent HWE removing equipment and staff from Huntly's Rotowaro mine.

At the time the injunction was sought, HWE had removed two excavators from the mine, the company saying it would cost more than $630,000 a month to leave them idle on the site.

The reserved decision of Justice Andrews in the High Court in Hamilton details comments from HWE operations manager Matthew King describing the situation at Rotowaro as "untenable".

Mr King told the court HWE was being forced to mine with no strategic direction.

He told the court if HWE was required to return the two excavators it would cost $880,000 and ongoing costs of $430,000 a month, "if HWE had to retain idle equipment and staff on site".

He said the further costs to HWE would be $630,000 a month if the excavators were not able to be used elsewhere.

Solid Energy applied to the High Court for the injunction claiming HWE was in breach of its contract because it had removed staff and equipment from the mine.

HWE maintained it had no alternative but to stand down fleets of equipment because Solid Energy had not provided it with scheduling directions, which meant staff and equipment was, at times, idle.

Solid Energy's contracts manager, Paul Nieuwoudt, told the court the removal of the excavators meant HWE had no prospects of meeting its targets, performing other services including the mine rehabilitation and had endangered Solid Energy's supplies to its customers.

Coal from the Rotowaro mine is supplied to the Huntly Power Station, owned by Genesis Energy and New Zealand Steel at Glenbrook.

In his decision, Justice Andrews said that, standing back and looking at the case, he was not satisfied he should grant the injunction.

The Rotowaro mine's life was scheduled to end between 2011 and 2012 but Solid Energy maintains new discoveries could extend that to 2016.

- © Fairfax NZ News