Pike River receivers may not be able to claim full insurance

By Hayden Donnell

Pike River Coal's stock pile at Ikamatua. Photo / Mark Mitchell
Pike River Coal's stock pile at Ikamatua. Photo / Mark Mitchell

Receivers say they may not be able to claim a full $100m insurance payout to reimburse creditors of Pike River Coal.

PricewaterhouseCoopers receiver John Fisk told Radio New Zealand this morning it may not be possible to claim the total amount of two "business interruption" policies held by the company.

That could affect the amount of money available to give to creditors still owed millions by the company, he said.

"The maximum amount of their policy is $100m but the actual amount that could be claimable could be considerably less than that."

Mr Fisk said receivers were still waiting for calculations to show the exact amount of the insurance claim for Pike River Coal.

The company announced it is going into receivership on December 13, after explosions killed 29 workers in its Pike River mine.

It still owes $80m to secured creditors BNZ and New Zealand Oil and Gas.

Another estimated $10 to $15m is owed to contractors, including some of the men who lost their lives in the disaster.

It remains to be seen whether there will be enough money to pay back those unsecured creditors, said Mr Fisk.

They will remain behind the company's redundant workers and secured creditors in the hierarchy of payments, he said.

"That's the risk that people take when they trade with a company."

Mr Fisk said he was talking with secured creditors about the possibility of a package to pay out some contractors.

"We have discussed it but we need to understand what the extent of the situation is.

"They don't have any legal obligation to do anything but what they've asked us for is to quantify the situation and that's what we're working through at the moment."

Nitrogen machine to aid recovery

Meanwhile, a 20-tonne nitrogen generator has arrived to aid the operation to recover 29 bodies from Pike River Coal mine.

The machine from Brisbane, Australia is designed to cool down the mine after a fire that raged inside since an explosion on November 19, a police spokeswoman said.

It is hoped the "huge and expensive" machine will be in use at the mine site this weekend, she said.

"The GAG will put out the fire and then the nitrogen will cool the environment.

"This is just the next step in the process. Hopefully there's not too many steps after it."

The nitrogen pumping unit will add to the work of the GAG jet engine in suppressing the fire in the mine, she said.

Superintendent Gary Knowles said today the machine could be used at two new bore holes being dug at Pike River.

He said work to drill a bore hole into a point deep in the mine could be completed soon and another bore hole is being commissioned.

The holes will also allow gas sampling deep in the mine, he said.

"Establishing new sampling points will help build a picture of what's going on underground and... provide possible entry points for the nitrogen."

There was no clear timeframe for completing the drilling yet, he said.

"Because of the terrain drillers are working in it's never straightforward to put in a bore hole in and the work is weather-dependent."

Receiver John Fisk told Radio New Zealand this morning the costly recovery effort at Pike River Coal mine had "weeks, rather than months" left.

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