The Pike River Coal mine may have to be temporarily sealed after a fourth, powerful explosion sent large amounts of smoke and flames spewing from underground.
"There is quite a large amount of smoke coming out of the mine. This smoke has changed, it's no longer a gas fire, it's obviously now a coal fire," chief executive Peter Whittall said.
Families were told the news at 5pm.
"Where that coal fire is or how big it is, we don't know."
The worst-case scenario was that the coal seam would start to burn.
A gas fire was easy to put out, but a coal fire in a seam would be a "very different beast", Mr Whittall said.
Flames coming out of the top of the mine shaft had not been there earlier, which meant the nature of the fire had changed, he said.
Mr Whittall said he could not give assurances bodies would be recovered by Christmas, and the police officer in charge of the recovery phase of the operation, Inspector Mark Harrison, admitted the fire meant bodies may not come out intact.
"There's no time that can be put on this," Mr Harrison said.
"Things are changing in the mine, and we're getting the experts to give us continuous advice on what this means for the operation and whether any entry can be made to the mine safely."
Mr Whittall yesterday said the Pike River company and the recovery team were still looking at using a GAG jet engine to "inertise" the mine.
But he said flames meant the need to seal the mine had moved up the list of options.
The risk assessment team members were still considering the best option.
New South Wales Mines Rescue general manager Paul Healey, who will oversee the GAG machine, told Radio New Zealand today the machine was set up overnight and this morning the position of the machine would be decided.
Mr Healey was confident the machine, a Polish jet engine which injects inert gas into the mine, would put out the fire, although it would take a "number of days" for the gas to fill the mine.
"The GAG will extinguish the coal fire but there is a question of whether it can control it afterwards."
He said it was possible the fire could reignite and it is likely the mine will have to be sealed temporarily.
The jet engine pumps non-volatile gases into the mine to displace the oxygen which keeps fires burning.
Sealing lets the fire consume the oxygen rather than take it away.
Mr Whittall said the explosions may have damaged the roof of roadways in the mine and "rubbish" coal may have dropped down so there would be a lot of fuel in the mine.
Mr Whittall said he thought yesterday's explosion, at 1.55pm, would have been stronger than the previous three.
Unlike the previous ones, it went up the mine shaft "quite violently", rather than out the entrance tunnel.
It was the fourth explosion in the mine since a blast on November 19 trapped 29 men. The second, on Wednesday dashed any hopes that they might be found alive.
Mr Whittall would not comment on the attempts by a robot to enter the mine, its likely state or how the bodies of the 29 men would be recovered.
Families had taken the news of a fourth explosion quietly, he said.
People were exhausted from the first stage of their grief and wanted to know when their loved ones might be brought out.
"People have come from overseas, they've come from Canada, they've come from Great Britain, from Queensland, from Northern Ireland - how long do they have to wait in Greymouth to find out what's going on?"
The company would meet them every day and update them, he said.
Asked about the likelihood of people being charged over the tragedy, Mr Whittall said: "Well, that's an inevitable possibility of any investigation into any event.
"I've worked in this mining industry all my career, I understand that when incidents occur investigations occur. When the investigation [finds] someone's done something wrong then there should be consequences to that."
GAG JET ENGINE
* Weight 700kg, length 12m. Total weight including support equipment is 6.8 tonnes.
* Carried by truck and takes about three hours to assemble.
* Capable of producing 7m3 per second of gas. At that rate it could take one to two days to fill the Pike River mine.
* Works by pumping gas (nitrogen, carbon dioxide, water vapour) with very low concentrations of oxygen that will not sustain a fire in a mine. This starves the fire of the oxygen it needs to burn and eventually smothers it.
* First used in 1999 to extinguish a large fire which had been running for 54 years in Blair Athol mine, Queensland.
* The jet engine is one of two units bought for use in Queensland mines for $1.6 million.