Fonterra, the global dairy company, is planning to develop a major coal mine in New Zealand.
According to the company it will be cheaper to mine its own coal than buy it from embattled New Zealand miner Solid Energy, Stuff.co.nz reports.
It comes as Solid Energy announces it will slash jobs and close one of its major coal mines – the Spring Creek mine.
Fonterra's mining subsidiary Glencoal is looking to apply for licences to develop an opencut coal mine on farmland it owns at Maramarua, south of Auckland, on New Zealand's North Island.
The new mine is expected to replace its existing Kopako 3 (K3) mine, which is winding down.
David Wright, Fonterra's national consents manager, explained that in searching for a replacement supply for K3, the company talked to another of coal miners, including Solid Energy.
He went on to say that it chose to develop its own mine as Fonterra wanted to ensure the cost of coal, and security of supply.