What sort of twits at Solid Energy and the Government did not realise this- The same business mind twits in National who Jenny Shipley hangs around with?

coal prices have being declining since the GFC

Coking coal hit a peak of over $300 per tonne after the Queensland floods of 2011. The decline has been in the last 18 months or so, and there has been a rebound in recent months.

The price of coking coal was about $A100 a tonne in 2006-7, after having risen sharply from about $A50/tonne. It’s currently sitting somewhere about $A150-200 per tonne.

I can’t find a reference for this (it’s from memory) but here is a reference to thermal (steaming) coal in Australian dollars over the last ten years.
http://www.indexmundi.com/commodities/?commodity=coal-australian&months=120&currency=aud
Thermal and coking coal aren’t strictly comparable, since they have different end uses. A more useful proxy might be iron ore, since the demand for coking coal and iron ore are tied, however both have different (but linked) supply conditions.

As you are no doubt well aware, the New Zealand Dollar has dropped relative to the Australian dollar in the last five years, so when you look at it in New Zealand Dollars (and you can change the currency very easily) the price difference between 2007 and 2013 is far more evident.

Another bailout on National’s watch. I doubt anyone is keeping track of the billions of tax payer money that National has used, following Labour foot steps, to privatise the profits, socialise the losses.

Of course arguing about privatising Solid Energy separate from all other SOEs is basic unprincipled disconnected thinking. There is no more reason to own Solid Energy than any other business.

The real reason I understand is that no one wished to buy it at a price that Treasury thought was worth selling it at. There were informal market soundings on this a few years ago.

Ironically for the Greens, it is Solid Energy that keeps alive the entire West Coast railway system (which is “solidly” profitable with the coal export traffic through Lyttelton). It’s one of the only three bits of the railway network that actually do make a reasonable rate of return on capital. It keeps a branch line from Invercargill in the black as well, but the Greens are lobbying to end all that there.

Yes, but, the Kiwi dollar has risen tremendously. In addition, costs are up.

As the government were recently saying, companies that couldn’t handle a high dollar shouldn’t be in business. So why doens’t this apply to a state owned enterprise.

Surely national have to get the boot. But, the alternative is not credible either. What to do!

I do feel obliged to point out that the coal price is still higher than it was in 2006-2007 when Solid Energy made record (at the time) profits.

Methinks the same thing is happening here as has happened in certain mines in Australia – the costs began to blow out because of the boom, and the companies moved from lean operations to bloated ones.

Whats going on with that if they’re broke?

How much was the CEO getting paid? I thought the reason for massive salaries was so this doesn’t happen.

I should also mention , the high kiwi dollar is being blamed as a reason.

How many more jobs will be lost ?

Sure they have to run some things, but that doesn’t mean that they ever run anything well. Just look at all the things they run – clusterfuckups every single one of them.

That’s why selling Solid Energy is “maybe” ok, but power companies are absolutely not. And why Air NZand Orcon are probably ok.

This government is on a hiding to nowhere on asset sales. Why? Because it is driven blindly by ideology whereas the electorate is driven by pragmatism. Even if the government only sells assets that you and I think can reasonably be sold under your criteria, history shows that they will fuck up the all-important details so that our downstream industries and consumers will suffer.

I’ll share the cost of printing out your criteria and providing a copy for every MP’s office wall.

One word answer to that: Australia.

In reality the crown, as owner of the product to be mined, is best placed to profitably run a mining operation. Granted they need to get people that are actually good at it, but given the simple fact that they already ‘own’ the product they should be able to turn a bigger profit.

Ah but the market rules. Yep to the detrement of us all is obvious.

I’d venture that getting rid of the market has proved to be more detrimental where it’s been attempted.