Solid Energy has appealed to the Environment Court against being refused resource consent for a hydropower scheme on the Stockton Plateau on the West Coast.
Solid Energy communications manager Bryn Somerville said the company wanted to ensure it could efficiently plan and mine at Stockton, to make sure 650 jobs and the mine's 20 years of resources were protected.
"We believe the project we presented is the best fit for the situation at Stockton, including ensuring it does not compromise our main business of mining, so we're asking the Environment Court to have another look at what we proposed," Mr Somerville said.
The Solid Energy scheme is estimated to cost $230 million and would produce 176 gigawatt hours (GWh) of renewable electricity a year -- enough to power 22,000 homes.
The West Coast regional and Buller district councils rejected Solid Energy's application for 32 consents a month ago, saying the state-owned enterprise had failed to make a convincing case.
The hearing commissioners were mainly concerned about the scheme's environmental impact, particularly on water quality.
"The scheme has the potential to impact on ecological values by affecting water quantity and quality in the lower Ngakawau River and its tributaries, its estuary and the surrounding marine environment," the commissioners said.
Solid Energy's proposals to mitigate environmental impacts were insufficient, they said.
Private company Hydro Developments Ltd (HDL) has resource consent for a hydro power scheme at Stockton using the same water Solid Energy would use, but Solid Energy is appealing HDL's consent.
Mr Somerville said Solid Energy remained hopeful it could negotiate with HDL to find a solution to suit both their needs.
HDL has just received permission from the Environment Court to begin a $1m geotechnical-drilling programme at Stockton for its proposed scheme. It requires permission from the Stockton Alliance to drive through Stockton Mine to reach its drill sites, and hopes to start preparatory on-site work in about six weeks.
The appeal against HDL's scheme is not expected to be heard until early next year.
HDL expects the scheme to cost about $200m and produce 240GWh of electricity a year. However, Solid Energy claims the HDL scheme will cost about $300m.