Government Liabilities for Rehabilitation of Stockton Mine

In 2016, Stockton Mine was offered for sale, complete with historic environmental liabilities. The government's sales agent referred potential bidders to the Ngakawau Restoration Project as a potential solution for management of AMD liabilities. In 2017, the mine was sold to BT Mining, but with the government retaining all environmental liabilities (AMD and land rehabilitation) incurred prior to the September 2017 settlement date. The government's accounts to June 2022 record:

A current provision of $3.058 million (2021: $7.850 million) and a non-current provision of $74.160 million (2021: $71.760 million) represents the discounted present value of the forecast cost of meeting the Crown’s obligations for AMD remediation. This represents a long-term obligation under current treatment methods. The Treasury is exploring alternative treatment options to manage the Crown’s future liability

In 2017, Treasury was tasked with recommending to Ministers long-term solutions to manage the government's liabilities for AMD rehabilitation of Stockton Mine. In 2017, the Treasury undertook a Market Sounding. HDL (through its agent Geotech Ltd) submitted the Stockton Plateau Hydro Scheme in the Ngakawau Restoration Project configuration in response to the Market Sounding. In 2018, HDL made an application to the Provincial Growth Fund (PGF) to assist with the development funding estimated to achieve financial close with the government. The NRP Project Outline and NRP Development Plan and Funding Structure attached to the application describe HDL’s proposed development plan for the Ngakawau Restoration Project. The principles proposed in 2018 remain relevant, although implementation will now be affected by the possible exit of the miner when the coal mining licences expire in 2027.

The PGF deferred consideration of HDL's application while the Treasury considered responses to its Market Sounding. HDL continued to work with BT Mining to propose an NRP HDL-BT Development Strategy that could serve the needs of BT Mining and the government. In 2021, the Treasury issued a Request for Information (RFI) which BT Mining withdrew from as it became an advisor to the Treasury. Westpower joined with HDL to propose the Stockton Plateau Hydro Scheme and Ngakawau Restoration Project in a joint RFI submission.

The Treasury has advised that it has established a Special Advisory Group to assess and compare the submissions to their RFI , with BT Mining and Ngati Waewae as partners in the assessment. A single-stage ministerial decision process is being applied to the Treasury's business case for a long-term AMD rehabilitation solution in accordance with Cabinet decisions. While the Treasury has presented a shortlist of AMD management approaches to the Minister of Finance, the Minister has not been asked to endorse the progress made and won’t be asked to do so until the business case process is complete. Only then will Ministers be asked to decide on a preferred option. It is quite possible that there will be no RFP issued for the preferred option until there is more certainty around BT Mining’s planned date of exit.

The Treasury has confirmed its latest “Investment Objectives” and “Critical Success Factors” for preparing the shortlist. HDL observes that the investment objectives have been amended to "maintain those health levels that exist at mine closure". Further the Treasury advises; "in selecting the preferred AMD remediation option, the environmental outcome versus cost trade-off will be a key consideration."

HDL’s expectation is that lime-dosing will be continued by the miner on behalf of the Government until such time as the miner quits the site.