18 Jul 2012

Pike River mine sale goes through

7:41 am on 18 July 2012

The sale of the Pike River coal mine to Solid Energy has been confirmed.

The mine has been in receivership since the explosion that killed 29 men in November 2010 and is still considered too dangerous to enter.

Details of the sale price can now be revealed.

Solid Energy paid $7.5 million for the mine with a promise to pay another $25 million if it mine resumes producing coal.

The money will go to the secured creditor, New Zealand Oil & Gas, and the the receivers, which pick up $2.5 million in fees.

No money will be paid to the 220 unsecured creditors - including former employees, contractors and suppliers - who are still owed $30 million.

Receiver John Fisk says all receiverships involve loss in the form of jobs and money but this process was made all the more challenging by the fact it involved the loss of life, which was an "absolute tragedy".

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

Seven people who worked for the receiver have accepted roles at the Pike River site.

Body recovery 'only if safe'

The sale is conditional on the recovery of the bodies but only if it is safe and economically feasible to do so.

In recent meetings with the men's families, Solid Energy explained that it can see no way to safely carry out a standalone re-entry of the mine and believes it could only be attempted as part of a wider commercial mining operation.

The spokesperson says it is likely to be several years at least before the company would be in a position to say if it had a safe, technically feasible and commercially viable mining plan.