Media Release

Solid Energy and Todd's Agree Terms for Spring Creek Mine

Terms have been agreed for Solid Energy New Zealand Ltd to acquire Todd Coal Ltd's half share in the Spring Creek underground coal mine near Greymouth. Final settlement is subject to conditions that the parties will work together to meet over coming weeks.

Solid Energy, New Zealand's leading coal producer and distributor, plans to reopen the mine as soon as the mine plan is finalised and approved.

Don Elder, Chief Executive Officer of Solid Energy comments: "We're pleased to have reached agreement with Todd's to buy out its share of the Greymouth Coal Joint Venture and expect that it will only be a matter of weeks before we can confirm the mine plan and reopen the mine.

Barry Bragg, General Manager of Solid Energy International, adds: "Since mining was suspended at Spring Creek last year we have been carrying out extensive investigations to confirm the economic viability of the mine and to establish the most appropriate mining methods. To maximise recovery of coal from the mine we will be adopting the 'hydraulic mining' methods we currently use at our nearby Strongman 2 underground mine.

"However over the first two years of the first five-year mine plan we will need to achieve a number of 'milestones' before we can confirm Spring Creek's long-term economic feasibility. If these are all achieved we will be able to complete a 10-year plan."

Greymouth Coal Joint Venture - a 50/50 partnership between Solid Energy and Todd Coal Ltd - started mining at Spring Creek in March 2000 using mechanised 'continuous mining'. The mine was put into 'care and maintenance' in February last year when unforeseen geological conditions forced the joint venture to suspend mining and reassess the mine's long term future. The Commerce Commission approved Solid Energy's application to acquire Todd's interest in Spring Creek at the end of June 2001.

Until the suspension of mining 61 people were employed at Spring Creek extracting semi-coking coal, in demand for its low sulphur and low ash characteristics, particularly for use by Japan's leading steel mills and for thermal power generation. Spring Creek mine is planned as a replacement for Solid Energy's Strongman 2 underground mine, which is scheduled to close next year.