Mayor excited about Hawkdun prospect

Central Otago Mayor Malcolm Macpherson is welcoming the prospect of a potential lignite mine near St Bathans and says if it proceeds, it will have "enormous" economic benefits for the country and the region.

•  Society will watch plans

"As far as jobs go, it would be the equivalent of another hydro project, only lasting longer," he said.

The L and M Group said the Hawkdun lignite deposit was one of five projects it was exploring in the Otago and Southland region.

L and M exploration director David Manhire said yesterday the Hawkdun was a "potential" project and no decision had been made on whether a mining permit would be sought.

"It's one of a number of projects we're looking at and we're still in the exploration stage, so it's too soon to say if this one, or any of them, will proceed to the next stage."

Dr Macpherson believed the project was "more than just an idea they are toying with and more than just an outside prospect".

The Central Otago lignite deposits had been investigated since the 1980s and the establishment of a plant to convert the lignite into fuel was becoming more and more likely as technology improved and fuel prices increased.

At a business forum in Alexandra last week, L and M financial controller Shirley Herridge outlined details about a possible mining operation based on the Hawkdun deposit.

It was expected to yield 775 million tonnes of lignite, worth $120 billion over 25 years.

During the three-and-a-half year construction phase, 2700 jobs would be created and once the plant was operational, it would employ 675 staff.

The maximum daily production was expected to be 51,000 barrels of fuel, which met all of this country's daily diesel requirements.

"The spin-offs from a project this big are enormous, for the Otago and Southland region and nationally," Dr Macpherson said.

"The number of jobs involved means almost every contractor in Otago and Southland would be involved."

The volume of diesel which would be produced was nationally and internationally significant.

L and M had a good track record in Otago for the way it managed the environmental impact of its projects, he said.

The company has a alluvial gold mining operation under way at Earnscleugh and completed a gold mining operation at Island Block several years ago.

"They've shown us there's no need to fear long-term mining."

Alluvial gold mining was similar, in a sense, to open-cast mining, and the company had proven it could manage the impact on the environment.

The potential Hawkdun site was well away from the highway and the Otago Central Rail Trail but visible from parts of the Oteake Conservation Park.

However, the Project Hayes wind farm proposed by Meridian Energy had been turned down by the Environment Court because it was located in an area deemed to be valued for its landscapes.

Any application to mine was unlikely to be heard by the Central Otago District Council.

It was more likely to be handled by the Environmental Protection Authority (EPA), set up last year when the Resource Management Act was amended.

The EPA was established to make planning decisions on "nationally significant proposals".