The Pike River families have their hopes dashed again

By Rebecca Macfie In Pike River Mine Inquiry

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Fire emerges from the Pike River mine in December 2010

If there was any need for further evidence of the sheer dangerous folly of Pike River Coal’s grandiose plan for mining the Pike lease, last night’s news that Solid Energy was paying just $7.5 million to take it off the receivers’ hands provides it.

And for the families of the Pike 29, it is yet another instance of hopes, having been inflated, dashing cruelly against the grim reality of commercial decision-making.

Solid Energy won’t attempt to recover the bodies of the dead miners, other than in the context of a future commercial mining operation at Pike. And the chance of that happening is only about 5-10%, says Solid Energy CEO Don Elder.

Pike River Coal had poured $350 million into its ill-conceived and fatally-flawed hole in the Paparoa Range by the time the mine exploded on November 19, 2010; it had promised investors it would yield a million tonnes of high grade coal a year, but had achieved just a few thousand tonnes in total.

But yesterday’s deal between Solid Energy and Pike’s receivers crystalises the true value of the project.

In return for its purchase price of just $7.5 million, the state coal miner is getting a few bits and pieces of above-ground machinery that it can use at other mines; Pike’s coal load-out facility at Ikamatua, which it wants as a stand-by option if the rail route to its other West Coast mines is knocked out by landslips; the road that winds up the mountainside to the Pike mine portal (of value mainly because it enables the above-ground kit to be moved elsewhere); and the faint prospect that the 2.3 kilometre stone tunnel into the mountain might be of use in some possible future mining operation.

It will pay up to a further $25 million to the receivers only if commercial extraction of coal occurs in the future.

Despite putting its hand up early as a potential buyer of Pike, Elder says on closer inspection Solid Energy found it so unappealing that it had walked away from the sale process last November. It came back to the table in March only after the receivers asked it to have another look when all other potential buyers had fled.

It’s clear that Solid Energy is approaching its new acquisition as a clean-slate prospect. Elder has been damning of the inadequate level of geological exploration undertaken by Pike’s promoters, New Zealand Oil and Gas, and regards this as one of the root causes of the explosion that took the lives of 29 men.

He argues Pike had done only about one-tenth of the amount of drilling that was required to properly understand the geology of the area – and while the residual data from that work will be useful to Solid Energy as the new owner, he says there could be seven or eight years of further drilling and exploration before any decision on a new Pike mining operation can be made.

The tragedy for the families is that – justifiably or not – they saw Solid Energy as their best hope in their quest for recovering the bodies of their men. It was, after all, experienced Solid Energy miners who had tried to drum sense into the bureaucrats running the shambolic search and rescue operation in the days after the first explosion; and Solid Energy was the only potential buyer that clearly stated that it regarded body recovery as a priority.

The only faint hope they are left with is Elder’s comment that work to recover the stone tunnel, up to the point where it has been blocked by a massive rockfall, could continue. This may enable recovery of any bodies on this side of the rockfall – but is little solace for the majority of the families, whose men lie on the far side. As for the prospect of drilling around the rockfall – floated as an option in talks between the families and receivers last year – Elder is utterly blunt. “We think [that] will be a non-starter.”

No wonder the families are, once again, heartbroken.

More by Rebecca Macfie

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