THE PRESS MONDAY, APRIL 19, 1982. Exporting Buller coal

Press, 19 April 1982, Page 20

THE PRESS MONDAY, APRIL 19, 1982. Exporting Buller coal

The export of more coal from the West Coast has been talked about for years and a major Government study on the .question is only half way to being completed. A reasonable assumption is that increasing amounts of coal will be exported from the West Coast The Coast has large coal reserves for which there are growing markets overseas if. the price is competitive and the shipping is efficient The country should be able to exploit this situation to its-advantage, Bargaining over the price of coal exported to the main market, Japan, is always hard, yet the signs are . that the trade can be a steady one. A question of moment for the West Coast, and to a lesser extent for Canterbury/ is not whether coal exports will expand but how the increased tonnages will be transported to ships to carry the coal to foreign markets. Some earlier coal export proposals have foundered partly because internal transport costs have made the price to potential purchasers unacceptable. The whole , trade could come to depend on the decisions made in the near future about how the coal is to be transported from mine to ship. A study completed in September, 1980, presented several alternatives. One conclusion was that a mono-mooring buoy off Ngakawau would be the cheapest way to get quantities of Buller coal into ships’ holds. From a regional point of view, however, an offshore jetty was thought to make better sense because it would enable the growth of other export trades from the Coast, particularly woodchips and cement. Because of. the costs, the report more or less ruled out a deep-water port near either Westport or Greymouth. . The mines division of the Ministry of Energy favours the use of a slurry pipeline to a mooring buoy offshore. The Government’s recent decision to support a 12-month, §850,000 research programme into this system suggests that the division is going to have its way. On strictly economic grounds it should do so. It is the cheapest system and its installation would ensure that the country remained able to export West Coast coal at an internationally competitive price. Unless it can do this, the West Coast mining industry will languish and the local economy will suffer. ' The study will'have to find answers to several problems: the roughness of the seas, the possibility of pollution of the sea, and the substantial requirement of flat land in an area where such land is in short supply. The suitability of the technique for certain types of coal has also to be proved. For the volume of the exports envisaged, the economics of the system nevertheless look right' If a much greater export of coal were expected, the answer might be different. Even if. all these problems can be solved, a question still remains: should the Government adopt that method of loading the coal without giving consideration to the

wider needs of the region? Such consideration might suggest another, more system is preferable. In a letter to the West Coast United Council, the Minister of Works, Mr Quigley, has noted competing interests on the West Coast. He has commented on the desire for a deepwater jetty or port, which would help the Coast to develop other, non-coal, export industries. The strong fears on the Coast are that a slurry pipeline and mooring buoy for coal exports would close the door on other development in the region. Although such fears cannot be ignored, provision of a deep-water port or jetty that could still not accommodate large coal ships would not answer the demand for the efficient loading of coal. If it were practicable to combine the loading of coal with the building of facilities that would serve other export industries, all would be well. The preference most strongly held on the Coast itself is for an all-purpose, deepwater port, although Greymouth and Westport, cannot agree which should have it, Such a port has been described, probably realistically, as pie-in-the-sky. The very high capital costs would make port charges prohibitive for almost all exports. Although the Prime Minister, Mr Muldoon, mentioned last year the prospect of a port or jetty off Point Elizabeth, it must be thought most unlikely that the Government will be willing to invest large sums. in a full port for possible future export trades other than coal. Even if other port development comes to the West Coast, the coal exports seem more and more to be a separate consideration. The interests of Canterbury become involved because the building of any coalexport facility on the Coast would deprive Lyttelton of its present coal export business. Although the Lyttelton Harbour Board has planned in the expectation that this business will continue, railing the coal to Lyttelton may simply not be feasible if the trade grows very large. In the end the answer will lie in whether coal importers will pay the price that would be required. No amount of argument can beat this fact. If the price is too high, the coal will not move. The railways are an important employer on the West Coast, and the loss of jobs if the railways are deprived of their coal traffic might not be made up by the larger mining industry based on the cheaper exports that a mooring buoy would make possible. This raises the question of whether it is better to suffer some loss of jobs in one region or to make the most of exports to ensure export earnings that help to maintain jobs everywhere. A further consideration must be that if West Coast coal exports are not achieved the railway jobs will disappear anyway, and alternative jobs in moving coal will not be assured. To satisfy the many people that are worried by the preference for the pipeline method of loading coal, the pressure to achieve other exports, either directly from the West Coast or through Lyttelton, should be maintained.