Tuesday, 14 December 2010

Pike River Mine goes into receivership

It’s been announced today that Pike River Coal Ltd has been placed into receivership. Unfortunately this has been on the cards ever since the explosion due to the fact that the mine operation was already in considerable debt and has not been able to earn significant income since that time, and has been faced with ongoing expenses and the prospect of being closed for a considerable period.

It is likely the mine cannot re-open until the Royal Commission has ruled which is many months away – a year or more. It therefore remains to be seen what options the receivers will have for the mine – whether they try to sell it at a rock bottom price, or scrap the existing assets (which would realise far less money than their construction cost), or wait until the outcomes are more certain to enable a better market price for the mining operation.