Pike River Mine - Economic Aftermath

Economic Aftermath

On 13 December 2010, Pike River Coal Ltd was put into receivership, with three partners in PricewaterhouseCoopers appointed as receivers. On 15 December 2010, it was announced that about 114 of 157 staff in the company would be made redundant immediately, with some severance benefits paid out of the remaining company funds. It was also announced that it would be unlikely that the further numbers of contracting staff also unemployed or unpaid due to the mine accident would receive any money, as they legally ranked low in the order of creditors.

Pike River Coal originally stated that they hoped to be able to reopen the mine, hopefully before the completion of the inquiry. There is also some concern about the direct economic consequences of the current mine closure, as contracts for work related to the mine have been cancelled or are stalled. The mine remains closed as of the end of 2010, with no indications when or if it would reopen. Most staff have been made redundant, and many contractors are also unemployed or remain unpaid for earlier work.

In early 2011, it was reported that the receiver was considering different ways of treating the remaining assets of the Pike River Mine Ltd company. While it was possible that the mine would be sold, the option of fencing the area and returning it to the Department of Conservation was a 'worst case' possibility. On 9 March 2011, the receivers took over full control of the mine from the NZ Police.

In March 2011, Solid Energy was looking at purchasing the coal rights and access arrangements. The company said that any proposal to buy and reactivate the mine would include recovery of the dead miner's bodies, if feasible. They also noted that they saw the potential need to combine underground with opencast mining at the site. With the site sitting on conservation land, this is likely to be controversial. Open-cast mining in a national Park is banned by the Crown Minerals Act. The Pike River mine reaches the Brunner coal seam at depths of 150 to 200 metres below ground level. This is deeper than other NZ open-cast coal mines and likely to be uneconomic.

In August 2011, KiwiRail blamed the Canterbury Earthquakes and "loss of Pike River Mine volumes" for its poor end of year result in 2010 – 2011.