Solid Energy

The failure of New Zealand's coal miner.

Chapter 2

Solid Energy was being dismantled in the late 1990's as the owner, the government, saw it had no future.  The CEO assigned to complete this task, Don Elder, saw a different future for the coal producer and resurrected a business destined to be broken up and sold off.  In the decade after this, Solid Energy performed exceptionally well delivering great returns to the government, employment for over 1000 people and supplied coal to many entities within New Zealand and abroad.  Unfortunately, in 2012 the business found itself in serious problems ultimately failing.  Remaining solely as a miner of coal was always going to limit the future of this business.  It borrowed heavily (for the first time in its life) to pursue new , high risk and costly ventures.  All went well while the amount of coal the company produced and the price it attracted for that coal remained strong - this was betting on a future that could not be guaranteed.  When the price of coal dropped a once highly successful business fell apart.  The decisions that led to this outcome were flawed and even with hindsight do not make complete sense.