Pike River Coal Limited (In Receivership) Update

4 July 2011
News Release

Pike River Coal Limited (In Receivership) Update

The Receivers of Pike River Coal Limited today outlined the following key considerations in relation to body recovery plans in the context of any potential sale of the mine.

During the due diligence process associated with the sale process for the mine that is currently underway, potential bidders were advised of the outcome of the meeting with stakeholders in Christchurch on 23 May and specifically that the Receivers would use their commercially reasonable endeavours to secure a continuing commitment from any purchaser that ensures access and recovery of the bodies of the 29 deceased miners is not impeded by a sale. All potential purchasers have acknowledged this in the indicative bids that have been received.

This undertaking and the response of bidders to it will be an important factor the Receivers will take into account in evaluating and responding to expressions of interest and final bids.

Safety is paramount. For safety reasons the Receivers cannot impose a requirement on purchasers to recover the bodies. In addition, the Receivers and their mine experts do not have all information at this stage to confirm if any recovery is actually feasible. We understand the Crown endorses the Receivers’ view that safety is paramount.

The Receivers anticipate that potential purchasers will share the objective of re-establishing the mine as a successful business and a significant employer in the West Coast region. As part of this we expect potential purchasers will, on a best endeavours basis, both be required (under the Sale and Purchase Agreement) and wish to take all steps reasonably possible to recover the bodies. It is expected this will be communicated to New Zealand Petroleum-Minerals when an application to assign the Mining Permit is made by a purchaser of the mine.

Malcolm Hollis, receiver from PwC states: "The Receivers agree that nobody wants a sale of the mine to impede the potential recovery of the miners’ bodies. Equally however, we are confident that the paramount importance of mine stabilisation and the safety of potential recovery operations is recognised and that we must all take this process one step at a time. "

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