23 Dec 2010

Payment for mine contractors whose employees died

6:35 pm on 23 December 2010

Pike River Coal's receiver say it will make a payment to contractors who lost workers in the mine explosion.

The company went into receivership earlier this month after explosions killed 29 men and stopped production at the mine.

Altogether, 114 workers at the mine were made redundant, and were paid redundancy, but a question mark has been hanging over other creditors, including local contractors who are owed between $10 million and $11 million.

PricewaterhouseCoopers says its has reached an agreement with the mine's secured creditors to make a payment to the contractors.

The money will cover the labour costs of the contractors who worked at the site, and should be paid before Christmas.

John Fisk from PricewaterhouseCoopers says $300,000 will be paid to contracting companies that lost men in the mine.

Five contracting companies will be given money to cover wages already paid to workers.

He says an agreement was reached with the mine's secured creditors.

'Right thing to do'

A construction company that lost three employees in the disaster says it appreciates the move to pay the wages of the 13 contractors who died.

Previous payments have gone only to the sixteen mine company employees who died.

Chris Yeats of Chris Yeats Builders says it is the right thing to do. Mr Yeats says he is owed $130,000, and most of that will be paid.

The payout comes as a result of decisions by New Zealand Oil & Gas and BNZ - the two main creditors of Pike River Coal.

Despite the decision, independent contractors to Pike River Coal still have assurance of getting $15 million invoiced for goods and services.