Solid Energy chief quits state mine co
Solid Energy’s long-serving chief executive Don Elder has resigned following a huge rationalisation at the state coal miner last year where a quarter of the staff were made redundant.
Elder’s departure with immediate effect was expected after 450 jobs were axed last October, and the Government dumped and replaced most of the board members in November.
A dramatic fall in international coal prices mid last year was blamed by the company for its $40 million loss for the year to June 2012 and for the company slashing the value of its businesses by $151m.
A review lead to the mothballing of the underground Spring Creek Mine on the West Coast and the loss of about 230 jobs, 63 jobs at the Huntly East underground mine where operations were scaled back and about 150 jobs at head office in Christchurch, about half the staff there.
While the company stressed the fall in global coal prices as the cause of its problems, the annual report reveals burgeoning debt also. Until 2009 the company had very low debt but net debt grew from less than $50m in 2008 to nearly $300m by 2012.
The company’s statement yester- day said discussions about Elder’s resignation had ‘‘been under way for some time’’ but did not elaborate on why.
Solid Energy chairman Mark Ford, who took up the position in September after John Palmer announced his resignation in June last year, would not make any more comments.
Elder will remain available to work for the company to assist with the transition.
Garry Diack, who was previously facing redundancy along with a few others in the Solid Energy executive team, has been appointed the interim chief executive ‘‘until such time as an appointment is made’’.
Diack was the company’s group manager organisation development and performance, appointed in 2010 to lead the company’s coal technology developments.
The only two board members to have survived are Australian mining expert Alan Broome and David Patterson who had only been at the board table for 18 months. Directors who have been replaced were John Fletcher, Simon Marsters, John McDonald and Michelle Smith.
Ford said Solid Energy had grown and developed substantially and achieved many successes under Elder and he thanked Elder for his 12 years of loyal service.
Elder said his decision was consistent with his belief that the company had a strong future once it worked its way out of the impacts of the market downturn.
Under Elder’s tenure Solid Energy expanded about fivefold to 1800 staff at its peak in early 2012. His vision was to create a large, diversified energy business much less reliant on coal sales. Solid Energy’s sales grew from about $150m in 2000 to $1 billion by 2010.
Under Elder and the previous board, Solid Energy branched out into renewable energy projects such as wood pellets manufactured from wood waste and converting rapeseed to biodiesel at considerable costs and little, if any, return. The business case was based on getting premium prices, which did not happen.
Elder also took the company into new areas such as underground coal gasification and coal seam gas.
A question mark hangs over the company’s most ambitious proposal – conversion of vast deposits of Southland lignite to diesel and fertiliser, championed by Elder who believed these could be achieved in an environmentally responsible fashion.