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Plans for Solid Energy's demonstration briquette plant, confirmed yesterday, is a step in the right direction but not sufficient to revitalise Mataura, Southland Chamber of Commerce chief executive Richard Hay says.
Mr Hay said yesterday it was the potential full briquette and fertiliser plant, employing up to 2300 people, that would transform the area's fortunes.
If that went ahead, full production was six or seven years away.
Meanwhile, the construction phase of the demonstration plant would provide a boost and, hopefully, a good chunk of the work would be won by Southland firms, he said.
Moves were afoot among the town's business people to "upgrade" the town with an eye to attracting new residents.
Gore Mayor Tracy Hicks was pleased years of talk about energy development in the Mataura Valley were finally coming to fruition.
Construction of the demonstration plant would provide a economic boost, but the Gore District Council's focus was firmly on the long-term development option.
Mataura, with about 1700 people, and Gore, with nearly 9000, had a lifestyle "second to none" that must be protected.
The long-term possibilities of the energy development were exciting but if it was not properly planned, there could be unforeseen social consequences.
Mataura School principal Susan Dennison was delighted new employment was being created, with the possibility of a bigger development down the track.
She said Mataura's fortunes were already looking up, and there was plenty of other employment in the town's freezing works and the dairy sector.
The school's roll fluctuated between 100 and 120 and did not desperately need more pupils.
The energy development created hope for the district in a time of worldwide cuts and threats to employment, Mrs Dennison said.
Real Estate Institute of New Zealand Southland spokesman Murray Halstead, an Invercargill-based real estate agent, believed spin-offs to Mataura from the demonstration plant would be minimal, as workers would commute from Gore.
There would be little or no effect on real estate prices.
He said just 10 houses sold in the last six months of 2010, with an average price of $125,000.