Ohai in limbo as Solid Energy pulls pin

Optimism is high, but disappointment and sadness not far behind in the fall out from Solid Energy's well-signalled decision to close its Ohai coal mine at the end of June.

For many Southlanders and those further north, the name Ohai and coal mining are often uttered in the same breath, but, for now, the historical bond has been broken.

The issues stated by Solid Energy were the loss of a major commercial supply contract in 2007 and rapidly declining reserves meaning demand past the 2009 winter could not be met, chief operating officer Barry Bragg said.

"The last remaining pit currently contains 45,000 tonnes of coal, but most of that is needed to honour commercial supply contracts, leaving us with only 5,000 tonnes of household coal that we hope will last most of this winter," Mr Bragg

For Ohai, the issues are the redundancy of most of the 13 staff and the end of the line for a vital commodity, not only for the town's commerce, but also its infrastructure.

Coal used for heating utilities like the town's hall or pool will now need to be sourced elsewhere.

"I feel really sorry for our wee town," said one Ohai resident.

"I feel [Solid Energy] didn't do their homework right when they put the contract in. There's still heaps of coal, it's not as if we don't have any."

Particularly concerning, she said, was the impact on families, those who used coal burners in their homes and voluntary groups.

However, she did not think it was the end of Ohai.

"You've just got to get up and keep fighting. If we all gave up it would just be terrible. You can't just lie down and die."

Those sentiments were shared by Southland District Council Wallace Ward Councillor Brian Drummond, who said Ohai still had a lot going for it.

"The best thing is they've got a hell of a good volunteer fire brigade that keeps the community together and they've still got a pretty good medical centre," Cr Drummond said.

"It's not shut off completely, people will still stay there."

He said the closure came as no surprise.

"As soon as they lost that contact it was only a matter of time. They weren't making any money out of it."

Cr Drummond said it was unfortunate there was no other industry in the town, but there was hope for those who lost their jobs as there would be other opportunities if they were willing and able to adapt.

"Any business which can service the dairy industry is going to be needed, people just have to adjust.

"It won't be the job of choice, but that's the real world and there's nothing you can do about it."

He said he was still optimistic about the Ohai mine's future.

"I don't think they're out of it forever. It's just the cost at this stage and it'll come again."

Southland District Mayor Frana Cardno said the news couldn't have come at a worse time.

"We have known for some time the mine was possibly going to close, but had hoped that Solid Energy would win other contracts which would allow it to keep the mine with its excellent quality coal open," Mrs Cardno said.

"This would have been the best outcome for the workers and their families.

"I am devastated for the community."

She said Council would put resources into identifying other options which would ensure the economic viability of the Ohai area was sustained.

She was also hopeful proposals to mine some of the vast energy resources Southland had would come to fruition soon.

Following the mine's closure many of the buildings and plant will be dismantled and either redistributed to other Solid Energy sites, or offered for tender.

Five pits will be rehabilitated and seeded with pasture for grazing, a procedure designed to allow for the resumption of mining if a substantial long-term supply contract could provide the economies of scale needed to open a new pit.

Solid Energy staff met with residents and concerned members of the wider community last Thursday when the closure was announced, communications manager, Eammon Conaghan said, with discussion centred around the the company's ongoing involvement in the community and the rehabilitation of the mine.

He said there would likely be a follow-up meeting some time in April.