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Fonterra's new coal mine plans

Dairy giant Fonterra wants to open a new coal mine in Waikato to fuel its processing plants.

In an emailed statement, Fonterra's national consents manager David Wright says its mining company, Glencoal Energy, intends to lodge resource consents to build a mine near Mangatangi, about 50 minutes south of Auckland, off State Highway 2 towards Paeroa.

Without giving details, Mr Wright says the mine's footprint will be "very small" and will have a life of less than 10 years.

The land is owned by Fonterra and the mine will be open cast, he says, extracting 120,000 tonnes a year at its peak.

Consents could be lodged in a few months, after community consultation, with the intention of starting mining by the end of 2014.

Fonterra’s Waitoa, Hautapu, and Te Awamutu milk processing factories get their coal from the Kopako 3 mine, at nearby Maramarua, which is nearing the end of its life.

Last week, Solid Energy announced sweeping cuts to operations and staff, blamed on falling international coal prices.

More by NBR Online staff

Comments and questions

We seem to have enough coal being produced by other mines, tell them to buy some.

Like you would buy something when you could produce it yourself more economically!!!!!!!!!!

Ok then why don't they buy a shipping line too??? I'm joking....they should stick to their knitting....

They have a joint venture ocean freight company called Kotahi (JV with Silver Fern Farms).

NZ is a small market and often there are only a few suppliers of these services, so while the average business becomes a price taker, those with the size to do so may find it cheaper to circumvent the market.

And there is the issue of price volatility, so they are reducing risk by taking this option (although there are other instruments available to also do this).

But in the case of international shipping, Fonterra is the small one, there are all sorts of efficiency considerations like routing and return leg capacity utilisation Fonterra just would never be able to achieve by itself.

All very well to say that they could could do it more economically if they mined their own coal, but the question remains, why are they burning coal in the first place? What happened to 100% Pure NZ?