NZOG to receive $5m from Pike River sale

Smoke billows from the ventilation shaft after the fourth explosion in the Pike River coal mine, on November 28, 2010. Photo / Supplied
Smoke billows from the ventilation shaft after the fourth explosion in the Pike River coal mine, on November 28, 2010. Photo / Supplied

New Zealand Oil & Gas will receive a $5 million payment from the receivers of Pike River Coal after it was sold to Solid Energy in May.

A further payment of up to $2.5 million is expected before the end of the year.

Solid Energy will also pay a further $25 million by installments if and when extraction from the mine permit area reaches over 250,000 tonnes over a 12-month period or total extraction over any period reaches 1.25 million tonnes, whichever occurs first.

Once the trigger date is reached, the state-owned mine company will pay $2.5 million annually until the amount has been paid in full.

Christchurch-based Solid Energy has entered into an agreement with the government outlining the role each will play in recovering the bodies of the 29 miners, which still remain trapped in the mine, following a series of explosions in 2010.

The explosions forced the closure of the operation, leading to a Royal Commission of Inquiry and NZX-listed Pike River Coal was pushed into receivership.

- BusinessDesk

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n1 at 17 Apr 2014 19:44:01 Processing Time: 1159ms