Kurt Bayer

Kurt Bayer is an APNZ reporter based in Christchurch.

Pike River mine sold to Solid Energy

Photo / File
Photo / File

The sale of Pike River mine to state owned coal company Solid Energy has been welcomed by the West Coast community as a "giant step" towards retrieving the bodies of the 29 miners, trapped underground since the explosion in November 2010.

Receivers PricewaterhouseCoopers this afternoon announced that Solid Energy had placed a successful bid for the explosion-hit mine near Greymouth.

Receiver John Fisk of PwC told BusinessDesk the assets were exposed to the market for some time, and "all the parties had conditions they needed to work through before they would commit to a deal."

That accelerated in the past week, with state-owned coal miner Solid Energy agreeing to buy the mine's assets, which include a 58.5 million tonne resource of premium high fluidity hard coking coal of which 17.6 million tonnes is estimated to be saleable, subject to due diligence. Fisk said no material assets were excluded from the deal.

Until the bid is unconditional, Fisk said he can't divulge much information, including the sale price, but he will update creditors once he's in a position to.

Creditor New Zealand Oil & Gas said the final terms of the deal are still to be agreed, and will give an update on the distribution of funds once the sale and purchase agreement is signed.

Fisk said there's still capacity to continue with the reclamation plan after some staff were laid off, but any future work will lay with Solid Energy.

An emotional Bernie Monk, spokesman for the families of the Pike River dead who lost his 23-year-old son Michael in the disaster, was "excited" by the sale decision.

He said today it brought families closer to recovering the bodies of the men inside the mine.

"Solid Energy has said in the past that recovery is their main priority and that is a giant step for us.

"The families are very emotional about it. I'm pretty emotional and teary to be honest, but I'm excited. This is the first positive news we've had for 15 months."

Mr Monk said friends from Solid Energy had been alongside him since the day of the explosion, when they broke the news that his son Michael had died.

They had assured him Solid Energy workers would down tools to get the bodies out of the mine, he said.

"I had this gut feeling this would happen eight or nine months ago. It's great to see it.

"There's a long way to go, we can't just open up the mine and walk in, but it's a very positive step. We're finally dealing with people that we can trust."

Pike River Coal, which had been valued at $400million before 2010, went into receivership after the disaster.

It was understood that there were several potential buyers from Asia, South America and Australia interested but Solid Energy, New Zealand's largest coal mine group, were the only ones who signalled clear intentions over recovering the 29 bodies.

Grey District Mayor Tony Kokshoorn also welcomed news of the sale to Solid Energy, which operates the Spring Creek underground mine on the West Coast.

"I always preferred Solid Energy as the buyer. They know the geography of the place," Mr Kokshoorn said.

He said he had been given an assurance that the various parties were still committed to a trust fund being set up for the recovery of the bodies.

Mr Fisk confirmed the sale in a statement released this afternoon. He said: "We, as the receivers, are pleased with this agreement as we consider it the best way forward for all parties.

"As part of the agreement, negotiations will continue with the Crown to establish a trust that will help oversee efforts to enter the main area of the mine and facilitate body recovery - if it is safe and technically feasible.

"In the meantime, work on the tunnel reclamation is continuing. We will provide further updates as appropriate.

"No further details of the transaction or any related matter can be released until the agreement is unconditional."

- APNZ

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