the reign of old King Coal is nearly over

A coal train east of the Southern Alps (Darryl Bond)

The announcement yesterday that NZ's Solid Energy has gone into voluntary administration is no surprise and reflects a trend that is occurring world-wide with coal mining.  It was the energy form with which the industrial revolution began in the 18th century, but it is dirty energy and major industrial users of it are switching.  In China which has been a major importer, new coal fields developed in Mongolia mean that it needs to import less, so the international coal price has plummeted.

In the case of Solid Energy there was also bad management, which is nothing unusual in NZ, particularly with businesses owned by the taxpayer -- NZ Post is another example. And the taxpayer is the big loser here  -- the Solid Energy shareholder value of $3.5 billion 5 years ago is now zilch.

The other loser here is KiwiRail which shortly will have little coal traffic over the Westland and Midland lines.  There is, of course, the potential to replace it with intermodal general freight traffic, but that won't happen under the present government.