Greymouth backed as coal port

Press, 25 July 1985, Page 21

Greymouth backed as coal port

By

OLIVER RIDDELL

in Wellington Greymouth is the cheapest potential port for the shipment of West Coast coal to the Huntly thermal power station, according to a report to the State Coal Mines, prepared by the Ministry of Works. This report was initiated when State Coal began to assess alternative sources of coal supply late last year, and has been released by the Minister of Energy, Mr Tizard. The 1984 Energy Plan had noted the need to consider alternative coal supply sources in both the North and South Islands because of a possible five-year shortfall of coal from Huntly mines, from 1986-87. The possibility of a shortfall arose from delays associated with the assessment and development of the Huntly underground and Ohinewai opencast mines, Mr Tizard said. A number of port options were considered in the report for coal from Southland and the West Coast. A detailed assessment was done of loading at Bluff, Westport and Greymouth, and of discharge at Onehunga, Raglan and Tauranga. Transport to Huntly via Onehunga was found to be

the cheapest route for all South Island coal, whether from Southland or the West Coast, for the full range of possible tonnages. It was also found to be more economic to take West Coast coal via Greymouth than via Westport, although at Westport the higher cost was the result of having to stockpile coal in a roofed enclosure for environmental reasons. Carting West Coast coal through Lyttelton was also looked at. Rough-order costs showed that the extra inland transport would exceed significantly any possible savings in port infrastructure and sea-transport costs, and so the Lyttelton option was not considered any further. Over all, the study showed the most economic transport route of any coal would be West Coast coal via Greymouth and Onehunga to Huntly. Costs of carting coal on this route ranged from $62 a tonne for 255,000 tonnes a year to $94 a tonne for 110,000 tonnes a year, with an order of accuracy of plus or minus 20 per cent. When the cost of coal gained from State and private sources is added to these figures, and that cost is adjusted to reflect the calorific value of Huntly

coal, the delivered cost of West Coast coal should range from $9B to $l3O a tonne. Mr Tizard said that even at the lower end of the range, this was still significantly higher than the present price. Since the study has been initiated, the Electricity Division has been invited to bid for a further allocation of Maui gas. If that bid were successful, he said, there would be enough coal in the Huntly district to meet the demand. If it were not successful, more coal from outside the Huntly district could be needed. “Thus we now have the required information to assess the commercial viability of barging South Island coal to the Huntly power station, but we cannot make a final decision until the demand is resolved by the decision on extra gas allocation.” Mr Tizard said. The report also said that Westport suffered an additional disadvantage against Greymouth because of the extra costs in double-hand-ling (rail to road) from the existing wharf to the reclamation site for barging.