Heriot-Edievale.Com (Trading as Heriot-Edievale Limited)

Public Transport, Rail and Freight Advisory / Consultancy

The Transport / Rail Blog


Earthquakes, Coal Mine Disasters and World Coal Demand Hits New Zealand South Island West Coast Railway Hard - Might It Close?

Posted on February 14, 2016 at 10:36 AM
The New Zealand South Island West Coast railway network viability is under real threat now.
Solid Energy's serious woes continue. They are currently in Voluntary Administration and have now confirmed that closing the Stockton Coal Mine at Ngakawau north of Westport on the South Islands West Coast is a real possibility. This is the source of most of the railable West Coast coal to Lyttelton that is exported to world markets.
They are of course trying to find buyers for this mine as a Going Concern. I hope they do.
Rail transport of coal will form a big part of any bidders analysis on any possible purchase of the mine. Coal prices however remain very depressed and it is unclear for how long the situation will stay that way.
Of course the Rail link north of Stillwater through Reefton and Westport to Ngakawau would most likely close, or in modern day terms be "mothballed", should a buyer not be found and the mine closed.
Once, not so very long ago, the West Coast rail route was very busy with :
  • Coal ex Ngakawau,
  • Coal ex Reefton,
  • Coal ex Pike River,
  • Coal ex Rapahoe.
  • Gold Slurry ex Reefton
  • Logs ex Stillwater
  • General Freight Forwarding ex Greymouth
  • Dairy to and from Westland Dairy at Hokitika
  • and of course the  world famous "Tranz Alpine" passenger train
I thought of this network, as most did, as one of the potentially best pieces of rail business in the country. Alas how things change.
But then came:
  • The September 4th, 2010,  7.1 Richter scale Canterbury earthquakes that started a nightmare that continues to this day causing the Tranz Alpine to loose over 50% patronage that even now is well behind where it was pre the 2010 Earthquake
  • The tragic Pike River Mining Disaster  of 19th November 2010 that closed the mine
  • The collapse of world coal prices and the subsequent cutbacks and Voluntary Administration of Solid Energy with the company effectively trying to sell most of its mines and shut up shop. This effects pretty much all West Coast Coal that is railable.
  • The end of most of the Gold Slurry traffic from Reefton
  • Logs drying up a bit
The only upside is that Westland Dairy has continued to grow although elements of that (like inbound Milk) may be under a threat too.
"It Never Rains But It Pours" if you pardon the pun, on the New Zealand West Coast.
Tourism is a upside for the Coast but then another Christchurch Earthquake on February 14, 2016 could dent confidence once again on the Tranz Alpine just as it was getting it's Mojo back with bigger trains being run. This could not have happened at a worse time right in its 2016 peak season. What a terrible shame!
Recent announcements in February 2016 suggest however that the Tranz Alpine revenue is now back at pre Earthquake levels. This must be on the back of better yeilds rather than passenger loadings though. Actually this is a good outcome and shows better management of the business possibly - but please no more big Earthquakes!
Overall though, this story is really quite sad and it seems we are back in the days of the late 1980's again when the whole West Coast Rail link (including the Midland Line) was under threat of closure.
Senior Officials at Kiwi Rail, quoted from various sources, recently said that only the line to Ngakawau ex Stillwater is under potential threat. But is this really true in the current climate?
Luckily Dairy ex Hokitika's  Westland Dairy plant is still strong and has been growing in recent years but is it,  with the TranzAlpine, enough to sutain the route? Certainly the line north of Stillwater will go if the Stockton mine closes.
The West Coast often has been boom or bust in its history and now is a time of some bust and I must say todays Earthquake in Christchurch hasn't helped. I am watching developments with great interest. They really do need some luck.
Poor old Kiwi Rail really is getting hammered but as a former colleague said to me once :
"It's Old New Zealand Wearing Out"
Yes the railway has to reinvent itself.
Worst case scenario (same may say best) could see a Taieri Gorge Railway type slow speed passenger line operated privately from beyond Darfield to Arthurs Pass only for the Tranz Alpine and the rest turned into a cycle trail. The parallels to the Otago Central Branch Railway (OCB) are quite scary right down to the Dairy sites on the Canterbury Plains like that Fonterra storage facility on the Taieri Plain near Dunedin on the first section of the old OCB. This would see the first section of the Midland Line to Darfield continue to operate commercially. Of course the TranzAlpine would run from Christchurch to Arthurs Pass and return partially on the Kiwi Rail tracks to Darfield just like the Taieri Gorge train does to East Taieri. But the costs would be likely much higher than the OCB to Middlemarch operation albeit the revenue would be higher if only those Earthquakes would stop.
Beyond Arthurs Pass would likely not stay as a operating railway because of the huge costs of the Otira Tunnel and with rugged difficult West Coast terrain beyond.
I sure hope something positive happens - a financial analysis of the current situation would be interesting and no doubt someone in KiwiRail is on to that right now.
Read the following press clippings for further insight into these developments:
Solid Energy has decision "pending" on whether to close Stockton
(From Stuff.co.nz website)
Solid Energy is reviewing whether the Stockton Mine on the West Coast should be closed, and has hinted a decision will be be made soon.
The state-owned company, which has entered voluntary administration in a bid to minimise loses to creditors, is undergoing a complete sale of its assets across New Zealand.
Chairman Andy Coupe told MPs that Solid Energy could give an update on the sales process around the middle of the year, and would have a good idea of what would be sold before the end of 2016.
Solid Energy chief executive Dan Clifford said the company will continue to review whether mines can be sold and if not, they face closure.
However, the company appeared to hint that a decision on the future of the Stockton Mine, the largest opencast mine in New Zealand, could be closed.
A decision would not be made "tomorrow", Coupe said, but would come "well before June".
"What the workers have been told is that the mine is losing money. All sorts of figures have been bandied around about the costs being greater than the coal price. We've been told a decision will be made by June or July about whether it will be closed if a buyer is not found," he said. 
The 140 union members were well aware closure was possible by the end of the year. 
"It doesn't make it any easier and it makes them feel insecure, but should it come down to that redundancy compensation has been secured with the administrator," he said.   
Chief executive Dan Clifford said the company had removed about 40 per cent of the operation plant from the mine, north of Westport, in recent weeks. Asked whether the mine could be closed, Clifford said employees were aware it was a matter being considered.
"We're continuing to assess that [closure] now. We've made it clear to employees that we have a decision pending on that."
While the company was preparing an information memorandum on its mines and would soon hold site visits for possible buyers, the viability of mines would continue to be under review.
"We will continue to assess our assets for profitability. We will continue, irrespective of where we're going we'll continue to do that. We have an obligation," Clifford told reporters after a select committee appearance in Parliament.
"If that means shedding equipment or closing down non-profitable mines, we will do that."
Despite reducing costs, Stockton was still reporting "slight" losses.
While the company was expecting interest in its mining assets because of the unique quality of the coal, Coupe said it was realistic.
"We're not expecting to be knocked over in a rush" by buyers, he said.
"There are assets for sale all over the world."
Solid Energy's assets had interesting elements to them but they were "very small in the scheme of things".
Coupe earlier told MPs that redundancies were "inevitable" and staff appeared to appreciate this. Although head office staff had been reduced from one in five employees to one in 10, it was likely that following the sales process there would be further head office loses.
Current employee numbers were about 450, including full time equivalent contractors, down around 1000 on four years ago.
Buller mayor Garry Howard said he had a meeting with Solid Energy representatives this week for an update on the sale process. 
"My understanding is that closure is a last resort. Sale as a going concern is far more preferable and better for the market," he said. 
There had been international and domestic interest in the mine, he said. 
"People have visited Westport to view the mine. I hope that the information memorandum is completed as soon as possible to allow buyer interest to come to fruition. I remain hopeful it will be sold. I've got alot of confidence that the mine will attract interest," he said. 
The prospect of closure was hanging over the community, which had already suffered hundreds of job losses since the slump in coal prices. 
"Solid Energy is being realistic with a depressed coal market. There is a considerable level of anxiety among the workers and that won't change until the process goes through its course."
And Kiwi Rail Lays Up Rail Wagons from Radio New Zealand News on 3 February 2016.
Kiwi Rail Revenue Hit By Lower Coal Volumes
Kiwi Rail has given details of how much the collapse of state coal mining company Solid Energy has cost it.
Solid Energy went into voluntary administration last year after accumulating unpayable debts of $400 million.KiwiRail transports the bulk of the company's coal.
Kiwi Rail chief executive Peter Reidy told Parliament's transport and industrial relations select committee that Solid Energy's failure has hit his company hard.
He said 64 percent of its revenue comes from carrying bulk materials like coal, which has slipped in two years from being a $50 million-a-year business for KiwiRail to a $23m business.Mr Reidy said many coal wagons were lying empty on unused tracks.
And sadly it's not over yet!! We will keep you posted.

Categories: None

Post a Comment


Oops, you forgot something.


The words you entered did not match the given text. Please try again.


Reply lebron james shoes
8:40 PM on January 6, 2022 
Thanks for each of your work on this web page. My mum takes pleasure in making time for investigations and it's easy to understand why. My spouse and i notice all relating to the compelling tactic you produce sensible solutions via the blog and as well inspire participation from other individuals about this article and our princess has always been starting to learn a whole lot. Enjoy the rest of the new year. You have been performing a remarkable job.
lebron james shoes http://www.lebron18.net
Reply jordan retro
8:43 PM on January 6, 2022 
My husband and i got relieved when Michael managed to carry out his investigations because of the precious recommendations he had out of the weblog. It is now and again perplexing just to continually be making a gift of guides which usually men and women have been making money from. Therefore we do understand we've got the website owner to give thanks to because of that. The specific illustrations you made, the simple web site menu, the relationships your site help to engender - it's many remarkable, and it's really aiding our son and our family do think the matter is excellent, and that's extraordinarily important. Thanks for the whole thing!
jordan retro http://www.jordan-retro.us.com
Reply air jordan
5:03 PM on January 7, 2022 
I wanted to compose a small note so as to thank you for these magnificent advice you are giving out at this website. My prolonged internet look up has now been compensated with reputable details to talk about with my friends. I 'd mention that most of us visitors actually are really fortunate to be in a useful website with so many awesome individuals with useful tips. I feel very privileged to have come across your webpages and look forward to tons of more thrilling minutes reading here. Thank you once again for a lot of things.
air jordan http://www.cheapjordan.us
Reply supreme
5:05 PM on January 7, 2022 
I wanted to post you that very small observation just to thank you very much yet again for your personal wonderful basics you've provided at this time. It's so unbelievably open-handed of you to present easily what exactly most of us might have offered for an electronic book to get some cash for their own end, notably now that you might have tried it in the event you considered necessary. These tactics additionally worked to provide a great way to be sure that someone else have similar passion similar to my personal own to know the truth more and more in respect of this matter. I believe there are some more pleasurable occasions up front for folks who start reading your blog.
supreme http://www.supremeclothing.us.org
Reply golden goose
5:05 PM on January 7, 2022 
Thank you so much for providing individuals with remarkably remarkable chance to read articles and blog posts from this website. It is always so ideal and also stuffed with fun for me and my office acquaintances to search your web site really thrice a week to read through the latest issues you have got. Of course, we are certainly fulfilled with all the mind-blowing tactics served by you. Certain two tips on this page are in fact the most effective we have all had.
golden goose http://www.goldengooseoutlets.us
Reply retro jordans
5:05 PM on January 7, 2022 
I have to get across my passion for your generosity for those people who absolutely need help on that matter. Your personal commitment to passing the message throughout appeared to be really good and has regularly encouraged guys and women like me to reach their dreams. Your warm and friendly tutorial entails a great deal a person like me and substantially more to my office colleagues. Best wishes; from each one of us.
retro jordans http://www.jordan-retro.us.com
Reply moncler outlet
5:06 PM on January 7, 2022 
I am also commenting to make you be aware of of the nice experience my friend's daughter enjoyed viewing your web page. She discovered some things, which included how it is like to possess a very effective teaching mood to let many people with no trouble fully understand various complicated issues. You really did more than our expectations. Thank you for displaying those interesting, trustworthy, revealing and as well as unique guidance on your topic to Emily.
moncler outlet http://www.monclercoat.us.com
Reply jordan shoes
1:47 AM on January 8, 2022 
I as well as my guys were found to be examining the great guides located on your web site and then before long I got an awful suspicion I had not expressed respect to the blog owner for those secrets. All of the people became consequently passionate to learn them and now have surely been making the most of those things. Thank you for truly being well helpful and for settling on certain excellent information millions of individuals are really desirous to be informed on. Our own sincere regret for not expressing gratitude to you earlier.
jordan shoes http://www.jordan12.us.com
Reply yeezy boost 350
1:48 AM on January 8, 2022 
I am just writing to make you understand of the outstanding encounter my princess found going through your web page. She figured out numerous pieces, most notably how it is like to possess an amazing coaching mindset to let a number of people with no trouble learn some hard to do subject matter. You undoubtedly exceeded our own desires. Many thanks for imparting these warm and friendly, dependable, educational not to mention unique tips on the topic to Gloria.
yeezy boost 350 http://www.yeezy350boost.us.com
Reply nike sb dunk high
1:50 AM on January 8, 2022 
I simply wanted to write a small message so as to say thanks to you for all of the nice tips and tricks you are sharing at this site. My time consuming internet lookup has at the end been compensated with extremely good facts to exchange with my contacts. I 'd point out that most of us site visitors actually are undoubtedly endowed to exist in a really good network with very many awesome individuals with insightful ideas. I feel quite grateful to have come across your web page and look forward to really more brilliant moments reading here. Thanks once more for a lot of things.
nike sb dunk high http://www.sbdunk.us
Reply goyard
1:50 AM on January 8, 2022 
I enjoy you because of all your valuable efforts on this blog. My mom really loves carrying out investigations and it is easy to see why. A lot of people know all relating to the powerful means you produce invaluable items through your web blog and in addition attract participation from some others on the matter plus our own princess is undoubtedly understanding a lot. Take advantage of the remaining portion of the year. You are always performing a superb job.
goyard http://www.goyardhandbag.com
Reply supreme clothing
1:50 AM on January 8, 2022 
I simply needed to say thanks again. I do not know what I would have worked on without these advice shared by you regarding such subject matter. This has been a depressing difficulty in my position, nevertheless being able to see a professional manner you solved that forced me to leap with joy. Extremely happier for the support and even have high hopes you are aware of an amazing job you're providing instructing many people with the aid of your site. I know that you haven't got to know any of us.
supreme clothing http://www.supremes.us.org
Reply lebron 18
9:43 PM on January 8, 2022 
I precisely wished to say thanks once again. I do not know the things that I would have undertaken in the absence of these pointers shown by you about such area of interest. It previously was the troublesome issue for me personally, however , discovering your specialized tactic you treated it made me to weep for contentment. I am grateful for this advice and thus have high hopes you are aware of a powerful job you were putting in instructing many people using your blog. I know that you haven't met any of us.
lebron 18 http://www.lebron18shoes.us
Reply off white jordan 1
9:44 PM on January 8, 2022 
I precisely wished to thank you very much all over again. I am not sure the things I could possibly have used without these basics shared by you regarding such a subject. It absolutely was an absolute traumatic setting for me, nevertheless seeing this well-written manner you resolved it forced me to jump for delight. I'm just grateful for this work and wish you know what a powerful job you happen to be getting into training the others thru your webpage. Probably you've never met all of us.
off white jordan 1 http://www.offwhiteshoes.us.com
Reply ggdb
9:44 PM on January 8, 2022 
Thank you a lot for giving everyone an exceptionally wonderful chance to read from this website. It's always very fantastic plus packed with a good time for me personally and my office mates to search your site particularly thrice weekly to see the latest tips you have. Of course, I'm so at all times impressed with your spectacular tricks you serve. Some 2 areas on this page are particularly the most beneficial I've ever had.
ggdb http://www.golden-gooses.com
Reply curry shoes
9:44 PM on January 8, 2022 
My husband and i ended up being so joyous when Chris could round up his inquiry using the precious recommendations he got when using the web pages. It's not at all simplistic just to find yourself giving away tips and hints which usually people today may have been trying to sell. And we also figure out we've got the website owner to give thanks to because of that. The illustrations you made, the simple site menu, the friendships you assist to promote - it's everything great, and it is leading our son and us reckon that the content is exciting, and that's tremendously indispensable. Thank you for the whole thing!
curry shoes http://www.curry-6.us
Reply yeezy wave runner 700
9:44 PM on January 8, 2022 
I as well as my buddies came checking the great recommendations on the website then the sudden developed an awful suspicion I had not thanked the web site owner for those techniques. Most of the ladies are actually as a result joyful to read through all of them and have in effect in fact been tapping into these things. Thank you for genuinely very accommodating as well as for settling on some important useful guides millions of individuals are really desirous to discover. Our sincere regret for not expressing gratitude to you sooner.
yeezy wave runner 700 http://www.yeezy700.us.com
Reply jordan 1 low
9:47 PM on January 8, 2022 
I just wanted to send a word to say thanks to you for all of the magnificent secrets you are giving at this site. My time consuming internet investigation has at the end been honored with extremely good knowledge to write about with my pals. I would say that we readers are truly endowed to be in a perfect place with many perfect people with useful concepts. I feel rather grateful to have seen the weblog and look forward to tons of more enjoyable times reading here. Thank you once more for all the details.
jordan 1 low http://www.jordan1shoes.us
Reply air jordans
7:32 AM on January 9, 2022 
I want to get across my appreciation for your kindness for individuals that must have help on your subject matter. Your real dedication to passing the solution all around turned out to be astonishingly invaluable and have continuously permitted employees just like me to arrive at their pursuits. Your new informative instruction indicates a whole lot a person like me and substantially more to my colleagues. Warm regards; from everyone of us.
air jordans http://www.cheap-airjordans.us.com