Govt could block mine bid without recovery

Receivers say lingering safety concerns means they cannot make recovering bodies a condition of sale for the Pike River mine. Photo / Iain McGregor

The Government could block a transfer of the Pike River mining permit if bidders did not commit to recovering the remains of the 29 men killed last year, Prime Minister John Key says.

A series of explosions starting on November 19 last year killed the 29 men, trapping their bodies 2.5km underground.

Mine receiver PricewaterhouseCoopers (PWC) has said it cannot afford to recover the remains and that responsibility would fall to the mine's purchaser.

The receivers today outlined key considerations of the mine's sale, including that bidders commit to paying to recover the remains.

The response from the bidders would be an important factor in evaluating their interest and final bids, but PWC could not impose a requirement on a potential purchaser to recover the bodies for safety reasons.

Mr Key today said the Government would have to approve transfer of the mining permit, at which point conditions on the purchaser could be attached.

"It's the Government's expectations as we sign off the transfer of that mining permit that a full attempt will be made to recover the remains of the loved ones that were lost in the Pike River mine," he said.

"We don't believe it would be acceptable, either to the families or to the wider New Zealand population, to have somebody credibly re-enter the mine with the purposes of taking coal out and not undertaking a credible recovery of the remains that are there."

If a purchase bid was economically viable but lacked a recovery plan, the Government could block a permit transfer.

"That's likely to be the case. There are always conditions that might omit that, but that would mainly be if it wasn't safe or credible to get into the mine," Mr Key said.

The Government was still open to helping fund a recovery effort.

"But at this point what we are discussing is a sale and purchase agreement headed by the receivers, and what the Government's expectations would be in meeting that sale and purchase agreement."

The Mines Rescue Team last week entered the mine for the first time since the series of explosions began in a bid to retrieve the remains - a delicate operation which could take months or even years.

However, receivers and mine experts did not currently have the information to confirm whether a recovery was feasible.

Receiver Malcolm Hollis said they anticipated potential purchasers would share the objective of re-establishing the mine as a successful business and a significant employer in the West Coast region.

"As part of this we expect potential purchasers will, on a best endeavours basis, both be required (under the Sale and Purchase Agreement) and wish to take all steps reasonably possible to recover the bodies."

Lawyer for the families Nicholas Davidson, QC, said a "best endeavours" clause in the sale contract offered no guarantee the bodies would be recovered but it was not without meaning.

"The families expect further discussion with the receivers in this regard and welcome the opportunity to speak with any would-be purchaser if that arose," he said.

The Royal Commission into the Pike River Mine tragedy will begin hearing evidence next Monday.

It will hear oral evidence from 12 witnesses, including the Department of Labour and Pike River Coal chief executive Peter Whittall, over the next two weeks at the Greymouth District Court.

- NZPA