Coal ‘hopelessly under-priced’

Press, 22 October 1984, Page 7

Coal ‘hopelessly under-priced’

From Oliver Riddell, in Wellington Figures showing the financial problems of State Coal Mines have been described as remarkable by Ms Cath Wallace, the convener of the mining working party of the Environmental and Conservation Organisation. “State Coal Mines obviously hopelessly underprices its product,” she said. “I wonder what interest rates it is being charged.” Coal resources were being badly misallocated in the urge to generate more power. This allocation was occurring in a climate where coal prices were unrealistically low.

If State Coal Mines started passing on its true

costs, electricity from coal would become too expensive for the projects contemplated, Ms Wallace said. Furthermore, people on low incomes dependent on coal for heat would not be able to afford iL

Coal, and electricity from it, had to be priced appropriately. Energy conservation was the only answer, she said. Government money and effort was going into production that neither it nor the nation could afford. Yet overseas work showed that it was realistic to try to conserve up to one-third of energy used. Of the thousands of people employed in the Ministry of Energy, only 10

were dealing with energy conservation. Ms Wallace said that what was needed were incentives to save energy rather than subsidies to produce it She wondered what a realistic coal price would do to plans for the New Zealand Steel project. A realistic price from State Coal Mines would lead to a boom in activity by private coalminers. “We really welcome the publishing of these figures,” she said. “It is a great day for sensible energy policies.”

E.C.O. now hoped that the Government would head towards rational economic policies on coal and other minerals.