Solid closed the mine in June this year after deeming the mine uneconomic. Before letting the workings flood and removing the infrastructure, Solid will test the market to see if the mine could be viable for another business.

“The point about the exercise is that some people believe Terrace has the potential to continue to provide a number of jobs and generate earnings for the district,” Solid South Island operations general manager Simon Doig said.

“If that is the case, this exercise should prove it one way or the other.

“We are not estimating a sale price. We know what the portable assets are worth but we look to the market for an indication of what Terrace may be worth to another operator.”

Expressions of interest are due by the end of January and, depending on the number and quality of responses, Solid will make a decision by April 2010.

“We’re doing this reasonably quickly because keeping the mine dry and ventilated is costly,” Doig said.

“If we don’t get any offers which are suitable, the mine will be decommissioned and rehabilitation begun on the surface areas.”

The Terrace mine was established in the early 1900s, producing about 5000 tonnes per annum, and was privately owned until 1988, when Solid’s predecessor, Coalcorp, bought a controlling stake.

Terrace’s annual production peaked at just over 73,000t but its average production since 1999 has been 45,000t.