Gore district mayor Tracy Hicks says the possibility of a lignite factory opening in Mataura is good news for Southland.
Solid Energy has signed up with Colorado-based GTL Energy to look at establishing a plant designed to extract moisture from lignite and compress it into briquettes for home heating.
Planned for an industrial estate, the former Mataura paper mill, the plant could be operational late next year. Solid Energy says it would create about 10 jobs.
Mr Hicks says it would be good to utilise the former paper mill, as it's been sitting idle for some time.