The
Otago and Southland lignite deposits represent by far the largest known fossil
energy resources in New Zealand.
Despite their size they have remained virtually untouched since exploration in
the 1970s and 1980s defined their extent. In total there is an estimated 10.9
billion tonnes of lignite in 13 defined fields in Otago and Southland. Much of
the exploration work only targeted seams at shallow depth and it is highly
probable that there are further resources at depth in the fields that have been
explored to date.

L&M
Lignite Limited (L&M) holds exploration permits over a number of lignite
deposits and is currently engaged in pre-feasibility studies to investigate the
potential of the lignites for gasification. L&M is focussing its studies on
the Hawkdun and Ashers-Waituna deposits. Coal quality in these deposits,
particularly Ashers-Waituna, is highly suitable for gasification. In total the
two deposits contain 1647 Mt of potentially recoverable lignite. L&M has
engaged a variety of consultants to progress this project. The Hawkdun and
Ashers-Waituna deposit databases have been re-evaluated and the resources
remodelled. Further drilling has been carried out and the coal quality database
has been expanded. The baseline project is to develop a mine to feed a plant
that will produce liquids, specifically low-sulphur diesel and naptha, using the
Fischer-Tropsch process. The project anticipates a staged development of
10
000 barrel per day units, each requiring mining at the rate of 12 700 tonnes of
lignite per day. The production of other products including ammonia-urea,
methanol, hydrogen and electric power is also under study.