Blast mine goes into receivership

The New Zealand company that operates the coal mine where 29 miners died in a series of explosions last month has been placed in receivership.

Pike River Coal chairman John Dow said the largest shareholder, NZ Oil & Gas, has appointed accountants PricewaterhouseCoopers as receivers. The mine is expected to announce mass redundancies tomorrow.

The first major methane-fuelled explosion ripped through the mine more than three weeks ago, and the 29 miners were declared dead after a second major blast five days later.

Their bodies still have not been recovered because of a fire burning in a coal seam.

Mr Dow said the mining company was in a ``precarious'' financial position following the disaster that has left it unable to repay its loans to NZ Oil & Gas and its bank.

NZ Oil & Gas, which owns 29.4% of the company, said Pike River had “substantial” debts.

The company faces “an extended period before any resumption of mining can be contemplated, and with (Pike River) rapidly facing insolvency, receivership is an unavoidable step,” NZOG chief executive David Salisbury said.

The receivers would “give particular regard to” recovering bodies from the mine tunnels, making the mine safe, the financial entitlements of employees, co-operating with official inquiries and preserving the company’s value, he said.

Pike River Coal has been operating for about two years. It sells coking coal to offshore steel producers and is New Zealand’s second-biggest coal exporter.

The company recorded an annual loss of £18.5m (€22m) in the year ended June 30, according to an annual return filed to the New Zealand Companies Office on November 3. Revenue for the year was listed as £1.6m (€1.9m) and net assets totalled £124m (€148m).