Pike River contractors owed millions

Millions of dollars owed to the contractors and workers at Pike River Coal may never be paid, as the company falls into receivership.

Millions of dollars owed to the contractors and workers at Pike River Coal may never be paid, as the company falls into receivership.

Creditors,  including New Zealand Coal and Gas and the Bank of New Zealand , have been brought in to assist with the financial troubles after 29 men were killed in the blasts  of 19 November .

Yesterday it was announced that 114 staff would be made redundant, effective immediately, despite initially being told they would be paid until mid-January.

One of the receivers, Malcolm Hollis from PricewaterhouseCoopers said staff would receive a maximum of $18 700 for wages, holiday pay and redundancy.

But workers who had been at the mine for less than a year would only receive wages owed to them, and no redundancy, according to the miners’ union.

Six companies working as contractors at the mine may not be paid by Pike River Coal as they are classed as “unsecured creditors”, according to John Fisk, one of the receivers.

"That is the risk that creditors take when dealing with a business. There is protection for employees, but unfortunately there is not for contractors."

Fisk said he would speak to creditors to see whether they would help unsecured creditors.

Families of contractors have been left out in the cold, and say they are owed the money their loved ones earned.

"My husband, he has worked 15-hour days, he has slogged his guts out to try and help Pike,  and get them out of the position they’re in,” said Anna Osborne, widow of Milton Osborne.

"In the end it took my husband’s life, took his two employees with him and we now will probably not get paid for the work that they did to try and help Pike out.

I have no husband left, my children have no father because of this, and it’s something that should never have happened in the first place and because it has we are now trying to deal with getting what’s owed to us"

Pike River has about $9 million in the bank, but owes $80 million to secured creditors and about $11 million to suppliers.

The availability of Pike River Coal’s $100 million insurance policy is still being ascertained.

Only last night the police said they would continue to fund the recovery efforts at the mine.

Last night the spokesman for the 29 men entombed in the mine thanked contractors for “working their guts out.”

"Some of them worked 18-20 hours a day to try and get our loved ones out and then to be told that they’re in receivership and they’ve got no money – I’m just gutted for them. I’m gutted and I’m going to push the pin and do my upmost to help them now."

He said the receivership would affect the small, close-knit Greymouth community.

"It’s going to affect all the business around here, it’s going to affect everyone. It’s a dramatic time for the area.

"Fisk said he would try to get redundancies paid to workers before Christmas. He could not say how many staff would be retained, but he did say the company wanted 35 to stay for the salvage operation and technical expertise on the mine’s future.
 

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.