Ohinewai coal will not be too expensive—Minister

Press, 12 March 1984, Page 2

Ohinewai coal will not be too expensive—Minister

PA Hamilton The Minister of Energy, Mr Birch, does not believe there is any chance of Ohinewai coal becoming too expensive for New Zealand Steel. In an interview, he described as “a hypothetical question” the possibility of Ohinewai coal eventually proving too dear for the company to use. “We do not believe that, New Zealand Steel does not believe that, and State Coal Mines does not believe that, and they are the people who should know,” said Mr Birch. “New Zealand Steel is still going to get coal a lot cheaper than a lot of overseas mills get their coal,” Mr Birch said, saying Japanese steelmakers were paying more than $lOO a tonne for coal. A consultants’ report last week estimated that Ohinewai coal would cost be-

tween $63 and $B4 a tonne to mine at a 5 per cent rate of return on the investment. Mr Birch has used the consultants’ figure of $69 as his term of reference, which was for one production option taking into account costs such as rates and royalties. “$69 does not mean a lot today,” he said. “It is a benchmark for considering other ways of mining it. We will not know for some time what the final costs will be until we get the bids in.” Mr Birch said that State Coal Mines were already subsidised by the taxpayer. He did not Uke this but the organisation was too important for the New Zealand economy to close down. Mr Birch said that the Opposition leader, Mr Lange, had no basis for saying he suspected that the Government had struck a deal with New Zealand Steel over the price it would pay for Ohinewai coal.

“It is an outrageous suggestion based on no facts at all,” Mr Birch said. He also replied to fears expressed by the newly selected National Party candidate for the Waikato electorate and president of Federated Farmers, Mr W. R. Storey, who said that in the cost-cutting Mr Birch now wanted, the first thing to suffer would be the rehabilitation of the landscape after the mining ceased. “We will not be looking at that” Mr Birch said. He said the areas which would be studied to see if costs could be cut were in such things as running the mine seven days a week instead of the five days envisaged in the consultants’ report. He expected further study to be done into the possibility of dumping at least some of the overburden back in the pit. This would lessen the rehabilitation needed outside the pit, and could be cheaper.