HWE in NZ coal dispute

HENRY Walker Eltin (HWE) administrators have begun legal action against New Zealand coal producer Solid Energy, after the latter terminated its contract with HWE for failing to meet

Ben Oliver
HWE in NZ coal dispute

Solid Energy assumed control of operations at the mine on Friday through specifically created subsidiary Waikato Contracting and Mining, after earlier cancelling its coal extraction and overburden shipping contract with the stricken contractor.

The majority of HWE staff, employed at the mine since 1998, were offered contracts with the new subsidiary.

Solid Energy claim production at the mine had fallen behind schedule, leaving the New Zealand group no alternative but to strip HWE of its contract.

"Given the uncertainty surrounding Henry Walker Eltin's future, and its long-term ability to meet its contractual obligations, Solid Energy has taken this step to ensure that we can meet our own contractual obligations to our customers," chief operating officer Barry Bragg said.

"This is the only responsible action we can take to ensure the continuity of coal supply to our customers."

Solid Energy issued a statement on Monday, however, stating HWE administrator McGrath Nicol & Partners (MNP) had sought a legal injunction to allow staff back on to the coal mine. HWE personnel are understood to have re-assumed production responsibility over the weekend.

"The issues relating to Solid Energy's termination notice are expected to be heard by the court prior to Easter," Solid Energy said.

Calls to the administrator were not returned.

HWE fell into administration on January 31, 2005 after the withdrawal of a $100 million lifeline from Swiss-based commodities house Glencore.

Last month, administrators MNP said it would convene a second meeting of creditors of the failed contractor by May 23 after being granted more time by the Federal Court of Australia.

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