Solid Energy bidding for Pike River

March 14th, 2011 at 2:24 pm by David Farrar

Hayden Donnell in the NZ Herald reports:

State owned mining company has revealed it wants to buy the mine, pay off its unsecured creditors and recover the bodies of 29 men still trapped inside. …

Solid Energy, which operates several West Coast mines including the nearby Spring Creek Coal Mine, today announced it was one of those looking to buy the rights to extract the $6 billion of coal still at Pike River through a mixture of opencast and underground mining.

Chief executive Don Elder said recovering the 29 bodies still inside the mine would be a priority in that proposal.

It was committed to addressing the “many challenges” of making the mine economically viable while respecting the wishes of the families of the dead, he said. …

“As a non-negotiable part of that, the wishes of the families have to be a priority in considering all options including potential recovery, if feasible, of the 29 miners’ bodies. The same applies to the unsecured creditors on the West Coast; any solution to invest in and work the mine needs to address that issue as a top priority.”

That’s possibly the best news the Coast has had, since the explosion.

Elder said the company’s plan would include opencasting parts of the mine.

Somehow I suspect the usual suspects won’t oppose this mine being opencasted.

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28 Responses to “Solid Energy bidding for Pike River”

  1. brucehoult (199 comments) says:

    Open cast?

    We are talking about a mine that is under conservation land, so that:

    1) they had to make the entrance outside conservation land, with the entry tunnel (extremely unusually – maybe even uniquely) long and uphill, which was very likely a major contributor to the disaster.

    2) they weren’t even allowed to build a road to the ventilation shaft, but had to access the site only by helicopter

    Most interesting.

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  2. Jimbob (641 comments) says:

    Very good news, and as soon as they can get an army of CAT dozers down there the better. It will also be easier for the recovery of the 29 miners’ bodies.

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  3. Sector 7g (241 comments) says:

    Should have happened before 29 mens lives were lost.

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  4. Lance (2,620 comments) says:

    Oh the poor snails
    Think of the snails!
    Oh the humanity

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  5. vto (1,128 comments) says:

    Pike River Coal should have designed a safe mine. And if they couldn’t do that then they should not have compromised the safety of the men and mined at all.

    Bloody negligent mine owners with blood on their hands.

    oh the lust and greed of man, let nothing stand in its way.

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  6. backster (2,142 comments) says:

    I would imagine the substantial Indian steel company which owned about 30% of the shares and contracted to buy all the coal may also want to make a bid.

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  7. Viking2 (11,367 comments) says:

    So all the West coaters will nowvote ACT along with all the other sensible people. Good news.
    Make Rodney Minister of mining instead of the builder fellow from CHCH. He’s got his hands full anyway trying to allocate dunny’s.
    Mind you Key will probably have to send the mad Nick Smith to somewhere else on the globe as well. Japan perhaps?

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  8. Luc Hansen (4,573 comments) says:

    At some stage, the international community will move away from coal as fast as it can. This is because the quickest stopgap fix to our warming problem is to stop burning coal. It will be accompanied by a huge shift of technology eastwards.

    And the world will be cleaner, quieter and healthier.

    Solid Energy is on the wrong side of history.

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  9. brucehoult (199 comments) says:

    Luc Hansen is exactly right. The sooner we can move away from coal the better.

    I don’t know whether he will like the fact that the only viable alternative is nuclear.

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  10. Morgy (172 comments) says:

    Luc, just ask the Japanese folk that live around Fukushima whether they would prefer coal.

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  11. nasska (11,154 comments) says:

    V2 @ 3.23pm

    Peter, Wendy & Tinkerbell with Nick Smith will give a press release on the fate of the snails after the Minister returns from a fact finding trip to Japan to assess the damage caused by the burning of fossil fuels.

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  12. Shunda barunda (2,977 comments) says:

    So solid energy wants the biggest war with environmentalists the country has ever seen? Good luck with that.
    Underground mining is by far the best way to mange this resource, it would be interesting to see whether partial opencast would hinder the possible development of the coal seems lower down.
    The Open cast plan Solid energy has probably revolves around a small section of the seam that is closer to the surface in a stream valley, access will be hotly contested though.
    It should be noted that Solid energy’s only other open cast mine in this terrain has been an absolute environmental disaster, it has cost millions to try and stabilise the hillsides and to put out the underground fires, so far they have not been successful.

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  13. gazzmaniac (2,319 comments) says:

    Good luck to them. I don’t see this ever making money, so to me it’s just a government bailout. I refused to buy into Pike River when it was a private company, yet now the government is happy to make a bad investment on my behalf.

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  14. KiwiGreg (3,247 comments) says:

    Because this country really needs more state-owned businesses?

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  15. toad (3,674 comments) says:

    Idiots!

    Well, maybe not – maybe it is all a PR ploy. Open cast is not economic at Pike River, and never will be. Pike River Coal said that themselves. There is just too much rock to remove before you get to the coal.

    This is just Don Elder blowing more wind out of his arsehole.

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  16. mavxp (496 comments) says:

    Luc, while not burning coal for electricity may be a nice and “green” thing to do, the coal at Pike River was not mined for electricity generation – unlike the low quality cheap brown crap they burn in Australia for power generation.

    It was very high quality black coal used for coking – an important part of the steel making process. It absorbs the oxygen off the iron oxide, leaving behind raw iron which can be smelted into steel. Hence the major investment by the Steel industry. Don’t want Pike River? don’t use Steel products, like cars, or quake safe buildings with reinforcement in them.

    Which explains why they would bother to go through the hoops of mining in this conservation estate with all those restrictions in the first place.

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  17. gravedodger (1,545 comments) says:

    Of course there was absolutely no truth in the suggestion that the bloody snails were moved to the critical location before the campaign to “save” them was launched to frustrate the establishment of the mine.
    And no truth to the other rumour that many, if not all the “saved” snails died following a malfunction of their storage container cooling system resulting in them being frozen to death.
    I dont get out much of course.

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  18. dime (9,806 comments) says:

    love it when toad tells us if something makes economic sense or not.

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  19. Viking2 (11,367 comments) says:

    Bye Bye greenies. Until you can open and operate at an unsubsidized profit industries of your own making that employ people and earn over sea’s funds for NZ then you are just jack shit noise making communists. Go somewhere else to live. We don’t want you anymore.

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  20. gazzmaniac (2,319 comments) says:

    gravedodger – DOC got the snails after Solid Energy paid to have them collected, then stored them in a fridge at Hokitika for a few months before releasing them on the Stockton Plateau. From all accounts the project was a success, although they found something like 4000 snails when they stopped; there were only supposed to be 400 in existance.

    dime – you might be shocked (I am), but toad is actually correct. Even if it was wasteland above Pike River, the open cut stripping ratio is something like 60-100:1, where an economic stripping ratio for nice easy coal is in the order of 20:1. So it’s unprofitable even before the complex geology is taken into account. The only way Pike River was ever going to be profitable was as an underground mine, and I don’t see why the government are supporting an unprofitible venture.
    The Greenies didn’t make Pike River an underground mine because it’s in a national park, the numbers simply didn’t stack up for an open cut mine.

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  21. gazzmaniac (2,319 comments) says:

    I wish to retract part of what I’ve said, now I have actually read the Herald article. Don Elder wants to do part open cut and part underground, but more importantly wants to properly define the resource before they mine it. As long as the resource is defined properly and all due diligence is undertaken, this project might succeed. In that case, Solid Energy should be looking to raise equity to build any mine or resource, and not ask the government to fund it – perhaps as a joint venture listed on the NZX. Any project should be able to withstand investor scrutiny and stand on its own two feet without government assistance.

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  22. mattyroo (1,020 comments) says:

    What a surprise the two stupidest comments on this post have been made by two of the biggest idiots that frequent this place….. Luc Hansen and the little green toad.

    Hansen because he suggests that the coal shouldn’t be accessed, because coal is dirty. Nevermind the fact this coal is used for steel making. Hansen’s not smart enough to educate himself prior though, so hardly surprising he says something dumb. Won’t be the last time either will it Luc?

    And then toad, suggesting that Don Elder doesn’t know what he is talking about, when he suggests opencast. I suspect that toad actually knows that Mr. Elder only means a very small open cut, but being a green he is going to spin it in a bad light. What’s the bet when this gets some more publicity, the greens ramp up the volume on the “opencast” misinformation.

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  23. Shunda barunda (2,977 comments) says:

    The problems with ‘open cut’ in that location are many.
    There is six and a half meters of rain per annum which will create a significant acid mine drainage problem and could lead to elevated heavy metal concentrations downstream in the Grey river, which supplies several towns with water and is popular with fishermen and boaters.
    The access would be technically very difficult as the terrain gets a whole lot steeper up from the current portal and the coal is right on the main divide of the Paparoas. It would be much more difficult than the current operation on the stockton plateau, which is well, a plateau!
    If anyone can do it underground Solid energy can and should. They have a good track record for underground mining in this terrain and place the safety of their staff as of utmost importance.
    Some of the miners I have spoken to absolutely believe Pike is viable as an underground mine, but not as a private company, I am very interested to see if these guys are right about what they think happened when the inquiry findings are released.

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  24. SPC (5,573 comments) says:

    Well a local company is sure going to go beyond its technical requirements under the law in going about the business of mining, but with the receivers being required to sell to the highest bidder we apparently can only hope for the best, or failing that elect a government that will regulate sufficiently to ensure that wider community good is first and foremost.

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  25. mattyroo (1,020 comments) says:

    Shunda, agree.

    Although, that is bullshit that the mine is not viable as a private company, if it is viable as a mine, it is viable to be mined by any of a state, private or public company.

    In my significant experience in working in resource extraction with many many companies all over the world, both state owned and private, I would work for and have trust in the safety processes of a private company long before a state owned company. Some of the unsafe shit that I have seen with SOE’s all over the world would blow your mind, you simply do not get this with private companies (as a rule), because their corporate governance enforces safety policies, due to business/shareholder risk.

    However, I think that when Elder says open cuts, I suspect he means more ventilation cuttings and access tunnels etc. rather than whacking the top of the hill in various places, per se.

    This is actually how this mine should have been from day one, however the fuckwit greens and DoC put up so many restrictions, I believe that PRC went for the minimalist intervention approach, just to avoid the fights with the luddites. Ultimately, PRC will be the ones prosecuted (rightly so), but really, are they ultimately the cause of the way the mine was constructed? In my opinion, No.

    Look, DoC even made them get special permits to drill the inspection bore hole immediately after the initial explosion. These assholes now have blood on their hands, yet they will always blame the corporate, as that is their default position. Unfortunately we don’t have anyone with either the smarts or the balls in the NZ media to take them to task for it. Classic example the little green puke trying to spin it as Elder saying “opencast” further up this thread.

    Contemptible assholes, nothing more.

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  26. Shunda barunda (2,977 comments) says:

    The thing is Mattyroo, Solid energy has built up an excellent workplace culture and has a long history in this terrain, they are a model SOE in this regard. If the stories about Pike are true, they could represent the absolute worst in private ownership where financial pressures trumped safety, also, they didn’t have a strong unionised work force, and sadly this could turn out to be a very “old fashioned” scenario.
    And as to DoC meddling, I just don’t think any of those arguments hold water, as far as I know Pike got every ventilation shaft they wanted and the safety of Pike river’s design was solely that of the company, the DoC stuff was worked out ages ago.
    A miner I spoke to believes that solid energy would have had a different mine plan in that terrain, but he also stressed that the mine still should have been safe as it was.
    Most people down here have a very, very good idea of what went wrong.
    No one here on the Coast believes that anyone but Solid energy can make a go of this mine.

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  27. mattyroo (1,020 comments) says:

    I’m not saying that Solid Energy couldn’t do it, I just wholeheartedly disagree that only they or another SOE could be the ones to mine that seam. Perhaps some of those people on the Coast need to get out more and get some more experience working in different mines all over the world, then their eyes might open a little. In fact most people in NZ could do with a dose of that, and I’m not talking about a sheltered OE to the streets of London, with a few side trips to what they deem 3rd world countries….

    I’m not on the Coast, but I have some very good contacts, who I would bet are a lot better informed than the Coast rumour mill, and what I do know from them, is that both DoC and PRC have a lot to answer for.

    Furthermore, why should anymore taxpayers money go into Solid Energy starting a new mine? I don’t want to invest in that coal seam, and this may be the only place where toad and I agree, I reckon he won’t want to invest in it as a taxpayer either. Though for the little green puke, it is for ideological reasons, mine are purely economic, based on rates of return.

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  28. gazzmaniac (2,319 comments) says:

    Ultimately, PRC will be the ones prosecuted (rightly so), but really, are they ultimately the cause of the way the mine was constructed? In my opinion, No.

    In my opinion, they are, actually. They are the ones who constructed it, and they are the ones who could have said No and pulled the plug.

    I think that if Solid Energy is listed on the stock exchange then that’d be a really good barometer of whether or not they should be building that mine. Let investors decide and let investors fund it, not the government.
    Additionally, As Shunda says, Solid Energy has a really good reputation for mining in tricky areas, so let them operate it as a partially owned venture that is listed on the stock exchange. It could probably even have the Solid Energy logo out the front.

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