Media Release

Coal Extraction resumes at Spring Creek Mine

16 August 2005

Coal extraction at Spring Creek Underground Mine, near Greymouth, has had a "positive start" with all productivity targets achieved since extraction resumed on Wednesday 10 August, says Solid Energy Chief Operating Officer, Barry Bragg.

Under a six-month mine plan approved through to the end of February 2006 coal is now being extracted by hydraulic monitor in "panel one", the area which has been under development. The plan includes safety and productivity milestones that are being monitored closely and reviewed weekly.

In the meantime Solid Energy's technical team has started developing a further 12-month mine plan for development and extraction through to the end of February 2007. This plan will use the results from further geological exploration and confirmation of the mine's performance in the current plan.

Barry Bragg, says: "This first week of coal extraction has been positive. Development and extraction rates and standards have been high. Safety remains the top priority.

"Progress will continue to be regularly measured against the development and production targets set out in the mine plan to ensure that the operation is sustainable and that it has a long term future. If targets are not consistently met the future of the mine will be reviewed. The economics of the mine remain marginal."

Prior to the restart of extraction, the major technical issue facing the mine had been upgrading the main ventilation fans. Replacement blades for the fans upgrade were made in Australia and installed at the beginning of last week with assistance from local company, Gray Brothers.

Coal extraction at Spring Creek Mine was suspended in November 2004 due to concerns about slow development rates and coal quality issues. Solid Energy has carried out a comprehensive review of development and mining systems and practices at the mine and implemented a number of initiatives to improve operational performance since then.

For further information contact

Vicki Blyth,
Communications Director,
Solid Energy New Zealand Ltd,
Phone 03 345 6000,
Mobile 021 670 250,
Email vicki.blyth@solidenergy.co.nz