Former Solid Energy chief executive Dr Don Elder arrives to
deliver the news of the company's sweeping restructuring,
at Dunollie, near Greymouth last September. The local
Spring Creek mine and adjacent processing site lost 220
jobs. Photo by the Greymouth Star.
In a shock announcement yesterday, the longtime chief
executive of beleaguered state-owned enterprise Solid Energy,
Don Elder, tendered his resignation, effective immediately.
Dr Elder, who has been at Solid Energy's helm since 2000,
said discussions had been ''under way for some time'' and,
while stepping down immediately, he was available for a
period to assist with the transition.
Garry Diack, previously Solid Energy's group manager
organisational development and performance, becomes the
interim chief executive.
Dr Elder has been a passionate and outspoken proponent of
coal and lignite extraction, and of the potential to turn
billions of tonnes of southern lignite into briquettes,
diesel and fertiliser.
A sustained anti-lignite and coal campaign by
environmentalists has been gaining public attention during
the past two years.
Since last August Solid Energy has been under increasing fire
after global coal prices slumped more than 40% and the
revelation of the likelihood of a $200 million decline in
Solid Energy's revenue this year.
Dr Elder, on a $1.1 million salary last year, was criticised
for not foreseeing the coal price collapse, and spending
millions on Solid Energy's failed biofuels business.
Environmental group Coal Action Network Aotearoa, which has
called for Dr Elder to be sacked in the past, welcomed his
resignation yesterday and called on the company to shut down
its lignite operations in Southland, where it has a recently
commissioned $25 million lignite briquetting plant.
Coal Action spokesman Tim Jones said in a statement Solid
Energy should cut its losses, walk away from the lignite
project and ''leave Southland's coal in the hole'' - the
group's rallying cry.
''Don Elder has pushed forward with his uneconomic and
environmentally ridiculous plans for exploiting the dirty
lignite proposals in Southland, which have been hampered by
delays and the departure of key partners,'' Mr Jones said.
The global price slump sparked a widespread restructuring at
Solid Energy, which cost 445 jobs across the country by
October and the mothballing or closure of several mines, with
thousands more service jobs affected in the wider
The board has been working through a quiet cleanout since the
closure of Spring Creek. By November, deputy chairman John
Fletcher had resigned with six months of his term still to
run, while Michelle Smith left a year early. The first to go
was former chairman John Palmer, who was replaced by Mark
Ford, leader of the Government's Auckland super-city merger.
Solid Energy's predicament saw it moved to the rear of the
Government's proposed sale of state-owned enterprises,
highlighting for would-be investors the dangers of commodity
suppliers' reliance on global prices.
Dr Elder said in a brief statement yesterday 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. Last November Solid Energy finished a
forgettable financial year, its after-tax profit plunging
146% to a loss of $40 million and no repeat of last year's
$30 million dividend. Revenue for the year to June was up 18%
at $978.4 million, cash flows were up 10% at $142.2 million
and coal sales up 13% at 4.6 million tonnes, but to counter
plunging coal prices, Solid Energy booked $110 million in
impaired asset charges (on its closed or restructured
assets), which slashed the previous full year's profit of
$87.2 million to a loss of $40.2 million.
- Additional reporting Greymouth Star