Financials and operations
Operating highlights by site
Rotowaro (65 percent equity share)
Rotowaro is an open cut mine located in the Waikato region
of the North Island. The mine produces a low-ash, low-sulphur
thermal coal for local steelmaking, electricity generation, and
other food and agricultural industries.
Adverse weather presented a major challenge for our operations
at Rotowaro during the first half of FY20, causing downtime
of an average of 40 percent, versus budgeted downtime of
27 percent. Whilst this did not materially impact sales and
production volumes, planned overburden stripping volumes
were significantly affected.
This deficit was unable to be recouped in the second half
of FY20. Being our largest domestic mine site, in order to
operate safely during the lockdown we reduced overburden
volumes to minimum levels required to maintain immediate
coal supply. Mechanical issues experienced in the mobile
plant also affected machine availability and increased plant
hire and maintenance costs.
Whilst these factors did cause a marginal flow on effect on
planned production, sales targets were achieved by drawing
down on stockpiles.
We engaged contractors to help with stripping levels and
these will continue into FY21 to ensure contracted sales are
met. The majority of overburden stripping is planned in the
Waipuna West pit.
Maramarua (65 percent equity share)
Maramarua is our smaller Waikato mine, producing similar
coal and selling into the same market as Rotowaro.
FY20 was a solid year for Maramarua. All key operational and
financial targets were met, largely unaffected by the lockdown.
This was despite the challenges from geotechnical issues which
required proactive management to ensure operations were not
In contrast to the Rotowaro operations, downtime caused from
adverse weather was less than expected, enabling operations
to get ahead on overburden stripping volumes. This has left
the mine well positioned heading into the next financial year.
Stockton (65 percent equity share)
Stockton is an open cut mine located on the West Coast of the
South Island, producing a low-ash metallurgical coal that is
exported overseas for use in steelmaking. Our primary markets
are in India, Japan, South Korea and Australia.
The 4.5 week shutdown of the mine across March and April
during the lockdown had an impact on the mine’s operational
and financial targets. Productivity improvements implemented
to help counter these impacts have now been permanently
adopted, and we are well set to meet contracted FY21 sales.
We commenced the construction of a water treatment sump and
lime dosing plant in the latter part of the year. These facilities
will significantly reduce water treatment costs and provide for
future mine expansion.
A key engineering focus for the mine was the de-risking of the
Cypress pit. This saw an increase in high-wall stability costs, and
the opening up of additional coal face areas to ensure continued
access to coal.
We engaged external consultants to identify ways that we could
work smarter, which identified several areas for improvement
and these are being progressively implemented.
Our efforts to protect local indigenous bird populations was
placed as a finalist in the Minerals Sector Awards 2020,
recognising the great work being done to minimise our impacts
on native birdlife including the iconic great spotted kiwi (roroa).
Canterbury (100 percent equity share)
Operating 70 kilometres west of Christchurch, our Canterbury
mine produces low-sulphur coal for local food manufacturing
industries. Our mine is managed against long-term contracts
and is located very close to its major customer.
This year saw solid results, with all operational targets met and
financial targets exceeded, benefiting from coal with a higher
calorific value which translated to a higher price received.
The announcement of our success as a finalist in the Minerals
Sector Awards 2020 in addressing legacy acid mine drainage
(“AMD”) issues and preventing future AMD, is welcome
recognition of longstanding efforts to reduce AMD at the mine.
We have made significant investment over the last five years
in understanding the source of the AMD, and how the waste
materials and landforms unique to the site help contribute to
the occurrence of AMD.
We have had challenges, with infringement notices issued in late
2017 and a prosecution in 2018 relating to sediment discharges
which occurred during heavy rain periods while water control
structures were incomplete, for which we were later convicted
and fined. But we have adapted – changing our mine plans
and practices, and implementing processes to proactively
plan for significant rainfall events by increasing capacity
of water management infrastructure and improving water
As a result, we have seen a substantial improvement in water
discharge quality, and the removal of legacy AMD that had been
caused by a previous mine owner.
Takitimu (100 percent equity share)
Located north of Invercargill in Southland, our Takitimu mine
produces thermal energy coal which is highly sought after by local
agricultural, health and other food manufacturing industries.
With the final coal mined from the Coaldale East pit in November,
operations are now solely focused on the Black Diamond pit
which contains historic multi-seam underground workings.
We have proactively managed and monitored the complexities
specific to this pit, which include underground coal heating,
and potential for minor spontaneous combustions.
Key operational and financial targets were achieved, with
operations proceeding largely as expected.
We continue to look ahead, with drilling programmes completed
during the year to give a better understanding of coal resources.