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Coal is New Zealand's primary energy asset. Coal provides New Zealand with security of energy supply, the ability to hedge the dry year risk created by the high level of hydro generation, and a cap on price of wholesale electricity and energy. In addition, New Zealand's premium grade bituminous coals find ready international markets. The properties of these coals include extremely low ash and sulphur contents, and very high swelling characteristics, making them suitable for use in the chemical and steel industries and valuable for blending.
The Ministry of Economic Development's (MED) Crown Minerals site is the best source of the latest facts and figures about coal production in New Zealand. But see also our Country Profile Page on this site. In summary from the MED site:
New Zealand coal production in 2007 was 4.83 million tonnes. Almost all production is of bituminous and sub-bituminous coals, in approximately equal quantities. (Early indications of 2008 figures indicate this has increased significantly in the 2008 year to well over 5 million tonnes).
Four underground and 21 opencast mines were operating in 2007. Solid Energy, owner of the two largest West Coast mines, was responsible for around 85% of the national production. Production is centred on the Waikato (2.2 million tonnes), the West Coast (2.15 million tonnes), and Otago/Southland (0.47 million tonnes). Over 60% of national production was from two large opencast operations, at Rotowaro and Stockton.
New Zealand's Reserves
Coal resources in New Zealand are estimated at over 15 billion tonnes, with 8.6 billion tonnes in the economically recoverable category. Eighty percent of that resource is in the low-grade lignite located in the Otago and Southland areas of the South Island.
There are 45 listed coal mines, with State-owned enterprise Solid Energy being the largest coal producer. Coal mines are located in the Waikato (servicing principally New Zealand Steel's Glenbrook mill as well as the Huntly power station and several major industrial customers), Otago/Southland (servicing mainly local industrial and domestic markets) and the West Coast (servicing mainly export markets).
Documentation of New Zealand coal geology, resources, properties and mining potential is held mainly by Crown Minerals which maintains a collection of about 1800 coal reports including the comprehensive exploration and mining studies carried out by the NZCRS. The Institute of Geological and Nuclear Sciences and its predecessor organisations have published extensive accounts of coalfield geology. Some 10,000 drillhole records are held in a computerised database jointly owned by Crown Minerals and Institute of Geological and Nuclear Sciences.
Coal Use
Coal is used in New Zealand to produce electricity, and as process energy in industry. In the year to September 2008, it supplied around 10% of New Zealand's electricity, and the year ended December 2007, coal supplied around 9% of New Zealand's primary energy consumption. Depending on geography, coal as a source of process energy is significantly cheaper than alternatives such as gas, diesel or electricity. The biggest domestic users are the Glenbrook steel mill (approximately 0.8 Mtpa) and the Huntly power station (approximately 2.5 Mtpa), and it is also used extensively in the dairy, cement, meat, timber and health industries. Genesis Power's 1000 MW dual coal/gas plant at Huntly can supply up to 20% of New Zealand's electricity requirements.
Approximately 0.55Mt of coal was imported for the year ended September 2008, primarily for the Huntly Power Station.
Exports of bituminous coal, produced entirely from the West Coast, was approximately 2.56Mt for the year ended September 2008. New Zealand coal is exported mainly to India and Japan, with smaller quantities going to Chile, South Africa, Brazil, China, USA and Australia. Most exports are of coking coal, with smaller amounts of thermal and specialist coals. The Pike River mine is being developed for coking coal exports, with first production expected at the end of 2008, and plans to produce approximately one million tonnes a year for 18 years from mid-2009. Advance sales for export have already been made.
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