Japanese to study Coast coal scheme

Press, 17 July 1979, Page 6

Japanese to study Coast coal scheme

A Japanese technical team, will arrive in New Zealand l next wSek to assess the; Mount Davy Coal scheme. 1 As a r«ffq|t of their findings drilling may be done to test the big coal deposit near Greymottfh for export to Japanese steel companies. Mr D. O. Walker, the l managing director of N.Z.I Forest Products, Ltd, outlined tfce timetable for the: possible development when he was in Christchurch yesterday. Forest Products has a 40 per cent share of the development company, which is half owned by I Japanese companies. Mr Walker said that if the technical studies proved satisfactory, discussion on a) commercial contract might begin in September or Octo-j her and' th a, first steps to-1 wards establishing a mine tould be taken before the tnd of next summer.

"It would take two to three years to build up to production of 500,000 tonnes a year,” he said. He expected about 10 export shipments of coal each year unless ships capable of carrying more than 50,000 tonnes were used.

The promoters of the i export trade in Mount Davy ! coal were not committed to the use of Lyttelton as the export port, said Mr Walker. But he was satisfied that the railway between Rewanui tand Lyttelton could move the coal to Lyttelton, which had the best available facilities far exporting the coal. The alternative to Lyttelton remained the offshore loading of coal in a slurry, but there were serious practical problems in getting the!

water out of the coal in the ship, he said. Asked what choices the Japanese steelmakers had, Mr Walker said they could turn to the United States, Poland, and Australia for coal — “but Mount Davy is better than most Australian coal.”

; If the Mount Davy Scheme went ahead, he said, his company might put S4OM into the capital; half of it equity capital and half loan money. The Government favoured the idea, he said but was insisting on more than 50 per cent New Zealand ownership of the exporting company, "Fiftyone per cent might be acceptable,” he said. The term of the proposed contract would be 15 years and the total export output from Mount Davy, at present expected to be 7.5 M tonnes, could be increased.