Solid Energy completes purchase of Pike River assets

Solid Energy has completed its purchase of the assets of Pike River Coal Ltd with the final US$ 5 million tranche of the US$ 7.5 million purchase price now paid.

The company has assumed control of the Pike River facilities, the main site near Atarau in the Grey district and the stockpile and rail loading facility at Ikamatua.  Seven people who had been working for the receiver have accepted roles at the Pike River site with Solid Energy.

In May 2012, Solid Energy completed due diligence on the former mining company’s assets and agreed a full but conditional sale and purchase agreement with the receivers. The main conditions were for the successful transfer of permits and land access agreements, and reaching agreement with the Government setting out responsibilities around recovery of the bodies of the 29 men who were killed in the mine explosion in November 2010 and on a contribution to the costs incurred by the Police following the explosion.

In recent meetings with the families of the 29 men, Solid Energy has explained that it can see no way to safely carry out a standalone re-entry of the abandoned workings as part of a body recovery and believes the only way this could be attempted would be as part of a wider commercial mining operation. It is likely to be several years at least before the company would be in a position to say if it had a safe, technically feasible and commercially viable mining plan. That is because a substantial exploration programme to better understand the resource and geology is needed before a safe and economic mining plan could be proposed for development.

Solid Energy will now secure the site, commence planning for an exploration of the mine’s main entry drift and planning to improve knowledge of the resource. The company will continue to keep the men’s families informed about its plans.

Adapted from press release by Jonathan Rowland.