Spring Creek to stay closed during internal audit

IT WILL take longer for Solid Energy to restart operations at its Spring Creek mine in New Zealand after receiving a prohibition notice by the NZ Department of Labour, because the company will need to review its underground systems to ensure that they meet internal standards.
Spring Creek to stay closed during internal audit Spring Creek to stay closed during internal audit Spring Creek to stay closed during internal audit Spring Creek to stay closed during internal audit Spring Creek to stay closed during internal audit

Solid Energy's Spring Creek underground mine.

Lou Caruana

While Solid Energy is confident that it can take all the steps necessary to have the notice lifted by the Department of Labour, its chief operating officer Barry Bragg admitted the company has to carry out further investigations over the three incidents that prompted the notice.

The company has a clear understanding of the steps it needs to take to satisfy the Department’s requirements and have the notice lifted, he said.

“For us, that’s a start but it’s only the first step,” he said.

“We have our own expectations and standards that need to be satisfied. I said yesterday we are very disappointed and believe these incidents should not have happened.

“For our senior management and board to be satisfied that work can re-start, we will need to complete our investigations into each incident and have made any changes which result from those inquiries.

“That could take quite a bit longer.”

On the morning of 20 February the Department’s Mines Inspectorate issued Spring Creek with a prohibition notice following the three safety incidents.

The effect of the notice is that all underground operations have ceased, except for regular inspections by staff and any actions required to ensure the ongoing safety of the underground environment.

Bragg said the incidents occurred due to breakdowns in systems at the mine although “in each case there were multiple safety controls in place which proved effective”

Firstly, there was a failure of notification to staff and management when one of the two main ventilation fans at the mine went down.

The second incident came about when power was not cut to a piece of equipment when a development fan stopped working, and the third incident involved overheating of a surface compressor.

Solid Energy management yesterday discussed the notice with inspectorate officials.

The stoppage is not expected to have any material impact on the company’s 2012 full year result.

This is because the mine is currently in development, preparing the next block of coal resources for extraction, and this phase is expected to continue for the remainder of the 2011-12 year.

Spring Creek employs about 230 mineworkers, tradespeople and professional specialists, with about 40 people working underground at any given time.

Spring Creek is moving towards a strong development focus, with the construction of roadways and underground infrastructure providing access to 3 million tonnes of coal in the Rapahoe sector to the north.

Spring Creek, which produced 89,000t of coal in the December 2011 quarter, up 19% year-on-year, was now 100% owned by Solid Energy after shipping and marketing group Cargill exited its joint venture partnership with Spring Creek Mining, Bragg said.

Cargill entered the joint partnership with Solid Energy in March 2007 with a 47% stake in the mine and supported a development program that provided four years of production.

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