From the early 1980s there was a slow revival in coal mining, which picked up dramatically in the 1990s. By 2003 there was a national production of over 5 million tonnes, which was double the 1990 figure. In 1987 State Coal Mines was transformed into a state-owned enterprise, Coal Corp, and by 2003, rebranded as Solid Energy, was producing 80% of the nation’s coal.
As the price of oil rose, coal proved more economic for local industries, especially electricity and steel. In 1983 the dual-fuel 1,000MW Huntly power station was commissioned, and it initially ran mainly on gas. However, as gas supplies tightened in the early 2000s, it used over 1 million tonnes of coal a year, sourced from several Waikato mines and some imports. Running at maximum capacity on coal, the Huntly power station can use over 2 million tonnes of coal a year.
The second major domestic market was the steel mill at Glenbrook, south of Auckland. This used iron sand from the west coast of the North Island and coal from the Waikato to produce about 600,000 tonnes of flat-steel products for domestic and export use.
The dairy industry, one of New Zealand’s biggest export earners, used coal extensively. Fonterra Co-operative Group operated a subsidiary coal mining company, Glencoal Energy, to supply coal to its dairy plants and the Huntly power station. The cement, timber, meat-processing and health sectors used coal, either for direct heat supply or cogeneration. Cogeneration produces both heat and electricity, and it increases the efficiency of burning coal by up to 90%.
Some New Zealand coals have properties that are in demand internationally, and a strong coal export industry developed following the trial shipments to Japan in 1976. All export coal came from mines on the West Coast of the South Island. Solid Energy was the major exporter, shipping 2.14 million tonnes in 2004. Most exports were of premium-quality coking coal for steel making, sent mainly to Japan, and also to India, South Africa, China and Brazil. There was an increasing export market for thermal coal for steam raising and power generation. In 2005, New Zealand was still a small contributor in the international coal market (less than 0.5% of all coal shipped), but it was clearly growing.
In the early 2000s there were about 45 coal mines in New Zealand, although some produced only a few thousand tonnes a year. About 40% of production was from the Waikato region, where the two major mines were Rotowaro (an opencast mine) and Huntly East, the only underground mine in the North Island. The Glenbrook steel mill and the Huntly thermal power station were the main users of Waikato coal.
Because underground mining leaves a part of the seam still in the ground, some modern opencast mines work in areas previously mined underground.
The most spectacular growth in mining in the early 21st century came on the West Coast. At Stockton in the Buller coalfield (the country’s largest operation with an annual output of over 1.5 million tonnes) a 2.2-kilometre aerial ropeway was used to bring coal down from the Denniston plateau. Near Greymouth, the Strongman 2 underground mine was productive for nine years (1994–2003), and was replaced by the Spring Creek underground mine. The use of high-pressure water-jet cutting and hydraulic transport of coal revolutionised the productivity and safety of underground mining. By 2003 the West Coast area was contributing close to half of New Zealand’s coal production, whereas in 1990 it had mined under 30%.
The one area where growth in mining was limited was in the lignite fields of Southland, New Zealand’s largest coal resource.