Solid Energy seeks to acquire Pike River assets

05 May 2011

Solid Energy seeks to acquire Pike River assets

Solid Energy has today submitted to the Pike River receivers an expression of interest to acquire the assets of Pike River Coal’s West Coast mine.

Solid Energy Chief Operating Officer, Barry Bragg, says Solid Energy has a natural interest in Pike River Coal given its long history and experience of coal mining on the West Coast. “We believe we have the knowledge, experience and track record to mine the resource safely and economically.

“Through our long-term agreements with KiwiRail and Lyttelton Port of Christchurch we have the capability to transport the coal from the West Coast to the port for export. We also have an agreement in place to rail coal from the Pike River mine to Lyttelton, which was put on hold following the explosion at the mine last November.

Solid Energy recently leased the land at the Pike River rail loadout at Ikamatua to complement its development projects in the Reefton and Greymouth area (as it is the only site locally which can quickly load longer trains and provide additional stockpile capacity).

“We believe Solid Energy is uniquely positioned to develop and implement a sound mine management plan that would allow the mine to be successfully operated, but we know that there is no short term fix to get the mine up and running again,” says Mr Bragg. “It will take a long-term commitment of considerable resources and capital over several years, as well as working with key parties including the families of those who died in the mine and the West Coast community.

“Solid Energy remains committed to recovering the bodies of the 29 miners, if possible, and to address the situation of the unsecured West Coast creditors. We expect that any company seeking to acquire the assets should be held to the same expectations. The worst that could happen for the families and the West Coast is that a speculator acquires the assets and banks them in their resource portfolio. That really would be the worst possible outcome for everyone.” Mr Bragg says.

“While Solid Energy is keen to acquire the Pike River assets, we are cautious about the prospect as we don’t believe the resource and its quality are characterised, or the geology understood, to anywhere near the level required in these types of challenging conditions, even in the areas that have been mined. There was also considerable damage to the mine from the explosions so we also have doubts about how much of the existing infrastructure will be useable.

“However, we are keen to work with the receivers of Pike River Coal to see if an acceptable proposal can be put together for Solid Energy to acquire the mine and bring it back into safe production as soon as possible so that it can once again provide jobs and contribute to the West Coast economy.”

ENDS

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