Costs of coal mine ‘political double-talk’

Press, 9 March 1984, Page 2

Costs of coal mine ‘political double-talk’

PA Wellington

Social Credit yesterday accused the Minister of Energy, Mr Birch, of “political double-talk” over costings for the Ohinewai opencast coalmine project. Mr Birch said on Wednesday that the Coalition for Open Government’s spokesman, Mr Keith Johnston, was wrong when he claimed the cost of extracting the coal had almost doubled.

It was only estimates that had increased, not costs, and the estimates increase was not unexpected, said Mr Birch. The estimated cost of extracting Ohinewai coal, based on a project rate of return of 5 per cent, now stands at $69 a tonne, from an estimate of $37 a tonne a year ago.

Social Credit’s spokesman

on national development and energy, Mr Terry Heffernan, said that Mr Birch was “stretching credibility into fantasy.” “Mr Birch seems to be claiming that the estimates on which the economics of major projects are assessed need have no relationship to actual costs,” he said.

“This raises a question as to whether his ’estimates’ are no more than figures pulled out of the air aimed at putting pet projects in the most, favourable light possible in order to win them support.”

Mr Birch said that he was confident Ohinewai would prove to be a “winner,” in spite of the criticisms by Social Credit and Labour.

“Pre-feasibility” reports showed that an opencast mine would be a viable proposition, he said.