Pike River listed on the Australian and New Zealand stock markets earlier this year and is developing the Pike River Coal Mine, an underground mine near Greymouth on New Zealand’s South Island.

 

The development budget is $185 million, to accommodate the extra tunnelling costs, with nearly all other development costs either on or under budget.

 

The tunnel is more than 60% complete and it appears the nature of remaining rock will be more costly to mine than expected when the initial public offering prospectus was issued in May.

 

"Progress has been maintained at a consistent rate, although rates of tunnel advance will vary from week to week depending on the rock type encountered, as is usual for projects of this nature," the company said.

 

The tunnel is expected to intersect first coal by the end of April 2008, one month later than previously forecast.

 

Market observers are expecting hard coking coal prices in the next Japanese Fiscal Year (commencing April 1, 2008), to settle at around $US115 per tonne, compared to Pike River's initial forecasts of around $96/t.

 

"Overall, the benefit to Pike River of higher coal prices is expected to more than offset the increased mine development cost, resulting in an increased project value since the IPO prospectus," the company said.

 

Meanwhile, the administrative and engineering buildings at the mine site have been completed and are occupied by the Pike River staff and project team.

 

The coal preparation plant is on track to start construction in the final quarter of 2007, to be completed in time for first coal in 2009.

 

The plant will receive all of the raw coal from the mine through a 10.6km coal slurry pipeline and “wash” the coal to remove diluting rocks and deliver a clean, dewatered product into stockpiles for haulage to the port at Greymouth.

 

The first piece of coal mining equipment, a roadheader manufactured by Waratah Engineering in Australia, is set for delivery to the mine site in November 2007.

 

The two continuous miners, also being manufactured by Waratah, are en route from Germany to Waratah’s workshop in Newcastle, New South Wales, with delivery to the mine site scheduled for February 2008.

 

The mine has also taken possession of its first two flameproof load haul dump machines in early September with two personnel transporters and a general purpose underground tractor on the docks in Christchurch awaiting delivery to site.