Mine obstacles leave NZOG undaunted

By CHRIS DANIELS

Setting up a new mine in West Coast bush is not for the faint-hearted, but New Zealand Oil and Gas is confident of getting permission to start digging for coal.

The company wants to build a mine at Pike River, which is on land the Department of Conservation manages in the Paparoa Ranges, 40km north-east of Greymouth.

The department is preparing a draft report, and a spokesman could not say how long the application procedure might take.

In July, the state-owned enterprise Timberlands West Coast gave NZOG permission to cut a road through 21ha of its land.

All that remains now is for DoC to allow a road to be built through a further 9ha that it administers.

NZOG owns 72 per cent of the Pike River Coal Company, which raised around $1.4 million this year to start developing the mine.

Private investors own the balance of the coal company.

NZOG financial manager and Pike River project manager Gordon Ward said he was confident of a positive reaction from DoC in the first quarter of next year.

The road was needed to go up to the mine opening. It would have a pipeline and power lines running along it, but would otherwise have little impact on the surrounding environment.

Any buildings would be on Timberlands land, or Pike River Coal Company property further down the hill.

Mr Ward said two-thirds of the road would go through forest that had been logged once before, in the 1900s.

The remaining third was virgin bush.

The Pike River mine will produce coking coal, a premium coal that is used in the steel manufacturing industry.

NZOG wants to truck the coal to Greymouth, then barge it to Shakespeare Bay, near Picton, for eventual export.

Mr Ward said the company had the ability and knowledge to mine for coal underground on the West Coast without causing environmental damage above ground.

Once the mine is operating and producing coal, NZOG is expected to spin it off, offering shares in the company and listing it on the New Zealand Stock Exchange.

A similar move has nearly been completed by NZOG with its Australian subsidiary, Pan Pacific Petroleum.

Every NZOG shareholder on the register on Friday gets one Pan Pacific share for every NZOG share owned.

Pan Pacific explores for oil and gas off the western coast of Australia and is listed on the Australian Stock Exchange. Shareholders approved the move at a special general meeting this month, and it was given final approval by the High Court at Auckland last week.

Separating ownership of the two companies was designed to allow NZOG to spend its money on its own activities, without restricting Pan Pacific from raising new equity capital.

Although NZOG attracted the ire of some shareholders for not actually doing any drilling over the past year, it is once again exploring for oil.

Drilling at the Makino 1 site off Taranaki began on December 10 and is expected to reach its target depth of 4500m by late next month.

"Mapping of the seismic indicates a trap extending over some 15 square kilometres, with mid-case potential of some 31 million barrels of recoverable oil," the company said last week, in an announcement to the Stock Exchange.

The exploration is a joint venture with four other companies.