Magnitude 7.4 earthquake strikes Christchurch

Message from Solid Energy CEO Don Elder

6 September 2010

Dear Solid Energy colleagues, and friends:

As most of you will know by now Canterbury had a major earthquake this morning and Christchurch has been severely hit.  We are continuing to have regular strong to very strong aftershocks and are likely to for days yet, and some of these could be strong enough to cause more damage.   Everyone in the city has been affected by water and power loss, broken items and has had to clear up a mess today.  Many in the city also have damage to their homes especially cracked or fallen chimneys, damaged or fallen brickwork, walls and rooves, cracked water cylinders, leaking plumbing and sewage systems, and concrete and driveway damage.  Some have had their homes significantly or severely damaged by the earthquake, or by liquefaction subsidence and flooding.  Areas of the city are closed and are being evacuated including the CBD, to keep people safe from dangerous buildings, gas and plumbing leaks, and flooding.  Early estimates of the damage are in the billions of dollars.

Fortunately the time of the earthquake and quality planning and engineering in recent years have worked in our favour and there have been no fatalities reported and only a small number of serious injuries.  While this might not seem like good news to those in the region faced with daunting losses, many earthquakes of this size and proximity to a city the size of Christchurch on similar susceptible ground have caused far greater devastation, and many fatalities, even in places like Japan and the USA.

The worst damage and problems in Christchurch city itself are from the CBD east out to the sea.  While slightly further from the earthquake epicentre this area is on looser and softer soil with higher groundwater levels and as a result appears to have had both higher intensity shaking and greater liquefaction.  Other than some cracked or fallen chimneys the west side of the city, which is mostly on gravels, appears less affected.  However some of our people live in areas from the western outskirts of the city out through the Canterbury Plains towards the epicentre at Darfield, and the further west from the city the greater the damage as you will have seen from media coverage.

Within the business we have spent much of the day communicating with as many people connected with our business as possible.  At this stage I can advise you of the following:

• Our Christchurch staff and their families have suffered the full range of impacts experienced by the rest of the city but at this stage we don’t have extensive details.
• I have not (at present) received any reports of serious problems among our staff and their families although we can’t rule this out yet.
• Our Rolleston Nature’s Flame / Biodiesel site has had some damage that is still being assessed by Andy Matheson and his team.
• Our mines and other sites around the country, particularly on the West Coast nearest to us, are not reporting any significant damage or impacts – thanks guys for reporting this in very quickly this morning.
• The rail line in Canterbury and through Christchurch, and facilities at the Port of Lyttelton, have suffered some damage but it appears this has been or can probably be addressed relatively quickly.  Thanks to Chris Russell and his team who have been working closely with KiwiRail and LPC, and with our transport partners Francis Mining and Pike River, since 4:30am this morning.
• Our Christchurch office appears structurally undamaged, however it is quite a mess.  Furniture has been moved violently, many loose objects including file cabinets, bookcases, computer monitors and pot plants were tipped over, much glassware and crockery broken and the floors covered with books, files, papers and dirt from plants.  However there appears to be little that can’t be cleaned up in a couple of hours on Monday.  Thanks to Hamish and his team and business partners including our landlord for completing their review very quickly today.
• Our IT and communications systems survived largely unscathed, a testament to the good disaster planning and design carried out by Christine Dormaar, her team and service providers who also completed their systems review very early this morning.
• Thanks to Barry, who was working with his team around the country from 4:30 this morning and was able to give me and others reassurance on the rest of our operations by dawn.
• Thanks also to Vicki who despite her own home damage has kept in touch with many stakeholders for us through the day.

The earthquake has made front page headlines in many places around the world.  Many of our friends from around New Zealand, across Australia and around the world – Solid Energy managers and staff, contractors, suppliers, customers, partners, industry colleagues, and of course family members and personal friends – have contacted us today with their best wishes and offers of support.  We have tried to reply to all of them to reassure them we are OK and to thank them, but this has not been possible in all cases although we will do our best.  To everyone who has contacted me and all my colleagues in Christchurch today, thank you very much for your kind thoughts and for your offers of support and help.

To my Christchurch staff and colleagues:

Your first and only priority at this time is, of course, yourself, your families, your homes and those who need your help.  I know some of you will be facing very difficult situations.  When you receive this, if you haven’t already done so, please just get a quick message, even just a text, to those who work for you to check on them.  Please also make a quick contact with your own manager to let them know how you and your team are, and particularly whether there is anything at all we can do to assist you or anyone in your team.

The Christchurch office will be open as usual on Monday morning.  I look forward to talking with you then if you are able to make it in.  Naturally we expect that if you need to take time to deal with other things you should do this; please just let your manager know sometime on Monday morning, and also please let them know what we can do to assist you.

Please feel free to forward this to other colleagues around the country or overseas.

Thank you, and best wishes, from me, our management team and our Christchurch staff.

Don

Dr Don Elder, CEO, Solid Energy NZ Ltd

PO Box 1303, Christchurch, New Zealand

Ph +64 3 345 6000  Mob +64 21 229 0143