Media Release

Solid Energy undertakes review of development at Spring Creek Underground Mine

17 November 2004

Coal extraction at Spring Creek Underground Mine near Greymouth on the West Coast has been halted by Solid Energy New Zealand Ltd, pending a review of the development processes at the mine.

Development work, driving roadways through coal and opening up new areas for extraction, will continue. However coal production will be reduced to around 10,000 tonnes per month (the mine produced 47,000 tonnes in October). Orders from New Zealand contracted customers will continue to be met from production and stockpiles. One export shipment is likely to be delayed until the New Year when extraction by high-pressure hydraulic monitor is expected to restart.

Solid Energy Chief Operating Officer, Barry Bragg, says that the company has stopped extraction at the mine to undertake a complete review of the development and mining systems and practices at Spring Creek. The company has been concerned for some time that the mine was not achieving its full production targets. While the monitor has been achieving target extraction rates, development work was slower than forecast due mainly to difficult geology.

Solid Energy recently embarked on a process to review and strengthen development and mining practices at Spring Creek. However on Monday evening Solid Energy stopped monitor extraction as a preventative measure, due to a risk of spontaneous combustion. The area at risk now has to be sealed off and the monitor will be moved to an adjacent extraction area. As a result Solid Energy decided to use the opportunity of the production shut down to undertake a full review of the mine.

"One of the most immediate actions that we need to undertake is to bring forward recruitment plans at Spring Creek as we urgently need more development shifts working at the mine. We estimate that we will need up to 50 more staff at Spring Creek over the next 12 to 18 months," Barry Bragg says. "The future for the mine is very positive, but we need to ensure that we get development rates up to secure long-term monitor extraction."

For further information contact: Vicki Blyth, Communications Director, Solid Energy New Zealand Ltd, Telephone: 03 345 6000 Facsimile: 03 345 6016 Mobile: 021 670 250