During the 1998/99 Asian crisis Solid Energy's export revenues collapsed from over US$70M to under US$40M. Simultaneously, domestic market uncertainty led to decreases in volumes and prices. A major new underground mine was not technically viable, and was closed, and several other mines were marginal. Less than two years later, Solid Energy and its JV partner closed a second new underground mine. The company was in financial crisis, and reported an $86M loss for 1998/99. After refinancing with stringent workout conditions it still had minimal returns due to low prices, unaffordable transportation costs and huge unrealised FX losses as the NZ dollar fell 40 per cent in value. The obvious scenario was to cash up' - complete extraction at remaining mines, sell off any viable parts of the business, pay off debt and wind the company down._x000D_
In 2002 Solid Energy has completed its recovery. Although margins remain slim and volatile in both export and domestic markets, it is achieving record volumes and revenues. It has paid off its shareholder loan, has minimal remaining FX losses, and cashflow is allowing further mine and infrastructure development._x000D_
The key to the turnaround has been implementation of rigorous planning, analysis and decision-making in all aspects of the business. The company has a comprehensive, rolling 20-year plan used annually to update rolling five year and annual business plans. Solid Energy augments strong line management operations with rigorous standards and processes for mine planning and development, operational decision-making, and functional support. Detailed, quantitative risk analysis is used in all aspects of the business and allows comprehensive integration of opportunity and risk management across all activities in the company._x000D_
Coal mining is widely perceived as an old-economy' industry. But, like other successful old economy' companies, the information systems and management processes used by Solid Energy are as leading edge as any in the high-tech sector. They are the key to managing to add and sustain maximum value for a company that has access to coal resources sufficient for hundreds of years.