Pike River purchase complete

NEW Zealand coal miner Solid Energy has completed its purchase of the assets of Pike River Coal (in receivership), with the final $US4 million tranche of the $6 million purchase price paid to receivers yesterday.
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Pike River mine months before tragedy struck in November, 2010. Image courtesy of PRC.

Lou Caruana

Solid took its acquisition of the New Zealand mine where an explostion killed 29 workers in November 2010 as an occasion to congratulate Newmont Mining for successfully rescuing 28 trapped miners at its Trio mine in the island country's northern town of Waihi.

But in meetings with the families of the men who died in the Pike River disaster, Solid Energy said it could see no way to safely carry out a stand-alone re-entry of the abandoned workings as part of a body recovery.

It believed the only way it could be attempted would be as part of a wider commercial mining operation.

“All industries have hazards that must be dealt with to ensure the safety of workers,” Solid Energy chief executive Don Elder said.

“Underground mining poses no more risks to worker safety than any other comparable industry provided that the right systems, equipment, infrastructure and training are in place and effective.

“Every company has the responsibility to ensure its operations meet these expectations.”

In May this year Solid Energy completed due diligence on the former mining company’s assets and agreed a full but conditional sale and purchase agreement with the receivers.

The main conditions were for the successful transfer of permits and land access agreements, reaching government agreement regarding responsibility for recovery of the bodies of the 29 men killed in the November 2010 mine explosion and agreeing on a contribution to costs incurred by the police following the explosion.

Solid Energy has assumed control of the Pike River facilities, the main site near Atarau in the Grey District and the stockpile and rail loading facility at Ikamatua.

Seven people who were working for the receiver had accepted roles at the Pike River site with Solid Energy.

It is likely to be several years at least before the company will be in a position to say whether it has a safe, technically feasible and commercially viable mining plan, since a substantial exploration program to better understand the resource and geology is needed before a safe and economic mining plan can be proposed for development.

Solid Energy will now secure the site, commence planning for an exploration of the mine’s main entry drift and planning to improve knowledge of the resource.

The company said it would continue to keep the men’s families informed about its plans.