Grey District mayor Tony Kokshoorn is confident about the future of mining on the West Coast once the region can work through its current challenges.
“There are some good prospects such as OceanaGold’s Blackwater gold project, Bathurst’s Escarpment coal mine and the possibility of Solid Energy developing an open cast coal mine in Greymouth in the future. We just have to get through the short term, although we don’t know yet how long this will be.”
Kokshoorn says he “couldn’t think of a worse run” endured by the region over the last two-and-a-half years.
“We’ve had every possible thing happen, starting with the world recession, then the Pike River disaster, the Christchurch earthquake which pushed down tourism, then the Solid Energy lay-offs which kicked us while we were down. There was even the drought. You wouldn’t read about it. I’ve said to people the only thing missing was a plague of locusts.”
Kokshoorn says the closure of Solid Energy’s Spring Creek mine left the region “reeling”.
“The Pike River disaster was bad enough, with the deaths rocking the town and a further 150 people all up losing their jobs. But even though we were in the middle of the recession we were able to absorb it to a degree, with some of the miners redeployed to Solid Energy and OceanaGold. But then the Spring Creek announcement came from left field and was a complete shock.”
He says prior to the “massive retrenchment” Solid Energy had indicated it was only six months away from putting in consents for a new open cast mine at Greymouth where it already holds licenses.
“Overnight we went from real optimism to Solid Energy laying off 230 direct staff plus 130 contractors. It was unbelievable.”
Union officials have told Kokshoorn that around 170 of the 230 staff laid off from Spring Creek mine are still looking for work.
“At this stage we know most don’t want to leave Greymouth, with many holding on and waiting for some good news from Solid Energy or the other mine companies with projects on the horizon. But in the end it will come down to employment. Some will probably have to move on to Australia or other places to get work.”
Kokshoorn says Solid Energy needs to “get their act together and stick to their knitting”.
“They have to get back to what they know best, which is coal mining and not all this flowery stuff they’ve been involved with. The potential for the new open cast mine puts them in a good position but they have to sort themselves out from a capital point of view and get on the journey again with projects that will give them good cashflow into the future.”
Although the industry is going through tough times, Kokshoorn is convinced coal is “far from down and out”, with the Stockton and Greymouth coal recognised world-wide for its steel-making quality.
“There is no question those coals are needed and when prices come back up things will turn around. We’ve reached the bottom of the cycle – the question is how long will it keep going sideways before things improve?”
Outside coal, the West Coast has huge mineral potential in gold, iron sands and rare earth minerals, he says.
“OceanaGold has already announced it will employ around 90 staff at its Blackwater gold project when fully operational which is something we can hang our hats on. In terms of other minerals projects we need to get some big players and partnerships in place to contribute the capital needed to stimulate economic growth in the region.”