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.
The New Zealand Scene
New Zealand coal production in 2010 was 5.33 million tonnes (Mt), 17% up from 2009 production of 4.6Mt. Of this production, approximately 2.60Mt was bituminous, some 2.44Mt was sub-bituminous, and approximately 0.295Mt was lignite. Opencast mines supplied 3.98Mt, with the remaining 1.35Mt from underground mines.
Five underground and 16 opencast mines were operating in 2010. Solid Energy, owner of the two largest West Coast mines, was responsible for over 82% of the national production. Production is centred on the Waikato (2.04Mt), the West Coast (2.71Mt), and Otago/Southland (0.54Mt). Over 59% of national production was from two large opencast operations, at Rotowaro and Stockton.
Although lignite makes up some 80% of national coal resources, it accounts for only around 5.5% of total production with nearly all lignite production in the past year from Southland mines (291kt). However, New Zealand’s lignite fields are likely to be developed in the near future for a range of products, including briquetting, urea production, feedstock for various products, and liquid fuels.
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.
Exports of bituminous coal, produced entirely from the West Coast, were approximately 2.4Mt for the year ended December 2010. 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.
Approximately 0.25Mt of coal was imported for the year ended December 2010, mostly for use at the Huntly power station. This was 62% lower than 2009, as the power station’s stockpiles were being replenished in 2009, spiking the figure for that year, in addition the station has reduced coal-fired generation, further lowering the demand. A small amount of bituminous coal was also imported by Golden Bay Cement for its plant at Portland in Whangarei.
In 2010, New Zealand consumed some 2.7Mt of coal, again down on the usage of the previous year due to reduced coal-fired generation at Huntly. Just over 0.25 million tonnes of which were imported, mainly for use by Genesis for electricity production, with the remainder coming from local production.
Coal supplied around 5% of New Zealand’s consumer energy demands. The biggest domestic users are again the Glenbrook steel mill (0.8 Mt) and the Huntly power station (0.6 Mt). Electricity generation (including cogeneration) accounted for 37.5% of domestic coal use and transformation (mainly steel making) accounted for 19%. The industrial sector, mainly cement plants (Golden Bay Cement near Whangarei and Holcim’s plant at Westport), lime and plaster, meat, dairy factories (particularly those at Clandeboye in South Canterbury and Edendale in Southland), wool, timber, and pulp and paper products, accounted for 37% of coal use, and the commercial sector - heating accommodation and service buildings in central and local government, hospitals, rest homes, and educational institutions – accounted for 2.5%. The remaining 4% was used by the agricultural, transport, and residential sectors.