Grey District Mayor Tony Kokshoorn believes there is still a future for Solid Energy and the coal industry in New Zealand.
About midday today the struggling state-owned mining company will make an announcement on its future, with expectations it will go into voluntary administration.
Solid Energy has $320 million of debt, partly thanks to falling international coal prices, and has been shedding jobs over the past few years – most recently 113 at its Stockton mine in May.
In April Finance Minister Bill English ruled out further Government assistance.
"The Government refuses to react, the company did not react, and as a result we are where we are," says Labour state-owned enterprises spokesperson Clayton Cosgrove.
"There's one rumour going around today that it could be a positive announcement – I hope for the workers it is. There's another rumour going around this is D-day."
Mr Kokshoorn expects the company to go into voluntary administration.
"Ever since the chairwoman of Solid Energy told Cabinet six months ago that they can't trade on with over $300 million worth of debt, this writing has been on the wall," he said on the Paul Henry programme this morning.
"We have to sit down with the administrator that we think will be probably put in place today, the Government and our councils and make sure that we make that transition as painless as possible for Coasters."
Ideally the company will get new owners and management, says Mr Kokshoorn.
"There is a future for coal still, but under new management is probably the most likely outcome… Even though the coal prices at the moment are very low, the Stockton mine – which still employs 300 or 400 workers – has high-quality coking coal. That can be sold. Up in the Waikato, they still supply coal to the domestic markets. And down here in the Grey District, Spring Creek – which has a really high-quality coal – can be used for making surgical equipment.
"So there is hope out there, but the problem is what they do with the over $300 million worth of debt."
Whatever happens, Mr Kokshoorn says the company has an obligation to treat its employees fairly.
"They've got to look after the workers here. They've got to try and make sure that there are markets for the coal, and that the existing workers stay on in their jobs. But this problem now turns to a domino effect. If the coal tonnages drop down too low, we've got to ask ourselves is the midland railway line viable?"
Mr Cosgrove also has fears the rot could spread.
"This would affect, if they close down, KiwiRail; this would affect all the ancillary businesses directly and indirectly, and the jobs associated with them not just simply on the West Coast, but right around the country."
Mr Kokshoorn however is confident the local economy will adjust, in time.
"We have made a really painful transition from extractive industries to sustainability over the last five years – that is ongoing, but we'll get there as Coasters. We are resilient, we can change – we just need some opportunities."
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