-
Source: ONE News -
Watch Video
Farmers are welcoming plans by Solid Energy and Ravensdown to mine urea that will be used to make fertiliser worth billions of dollars a year.
The urea extraction plant would be based on the huge coal reserves around Mataura in Southland and could become the country's biggest coal mine.
Ten billion tonnes of lignite coal has been lying dormant under Southland soil and Solid Energy owns over a billion tonnes of it.
Urea is a nitrogen fertiliser used to enhance grass growth and three mines near Mataura currently hold the blackened treasure trove trapped in the coal.
"It could create an export industry almost overnight that's worth one to two billion dollars a year, which is bigger than the wine industry and bigger than the wool clip," says Solid Energy chief executive Don Elder.
New Zealand has a huge demand for urea and Rodney Green from fertiliser company Ravensdown says the country is currently importing around 500,000 tonnes, mostly from the Middle East and China.
Last year the international urea price spiked dramatically, soaring from $US200 to $US800 a tonne and the New Zealand proposal has local farmers applauding.
"Those sort of spikes get taken out...we won't be dependant on the US exchange rate," says Green.
While some environmental groups are already questioning the impact of the plants, Solid Energy says the effects will be minimal.
"This is just replacing an import with a New Zealand-produced product and keeping all that money in New Zealand," says Elder. "That's a great thing."
The plant would cost more than $US1 billion ($1.41 billion) and the study will consider the economics and possible location of a plant producing up to 1.2 million tonnes a year from up to 2 million tonnes a year of lignite.
Up to 500 new jobs could be created.
Subject to consent and financing, building could start by 2012 with the plant possibly operational by late 2014. A lignite-to-urea plant would be fully carbon compliant from day one, Elder says.
