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A 30 per cent shareholder of the Pike River Coal mine says it might still recover some of the $150 million invested in the failed mine company.
New Zealand Oil and Gas (NZOG) say the mine may still have a future, with some of the money possibly coming from the potential insurance payout of $100 million and some value expected to be recovered from the mine itself.
However, NZOG said it might take over a year to figure out how much it might get back.
Up to $100 million in insurance claims could salvage some of the $64 million NZOG loaned to Pike, but ASB said it had “little hope” for that because the receiver’s fees are paid first.
Following the 19 November blast that killed 29 men inside the mine, the Pike River company collapsed, losing more than $400 million and in the middle of December, NZOG appointed a receiver for the mine.
NZOG’s quarterly report yesterday stated it would make a big accounting loss for the December half due to the failure at Pike River and while it was still figuring out exactly how much they lost at Pike River, it may not be the ‘entire’ $150 million invested.
"The terrible events at Pike River dominated the quarter,” NZOG chief executive David Salisbury said.
Police ended their recovery efforts at the mine last month, devastating the families of victims.
However receivers of the mine, PricewaterhouseCoopers said they would continue efforts for up to eight weeks.
When asked if the mine has a future, Salisbury response was “I would like to think so.”
He said NZOG did not want to take full primary responsibility for the re-development of the coal seam and said they wanted to sell out of Pike long before the tragedy.
The primary assets of the business still remain in the coal deposit, the mining permit, access arrangements with the Conservation Department and transport arrangements with Solid Energy, which are all still in place.
“There are people expressing interest in the coal mine assets, but it is early days,” Salisbury said.
He said there was a lot of work to be done before it could be determined if the coal seam could be mined again and it would not happen in the short term; and it was “pure speculation” whether open cast mining was possible, following speculation the coal could be mined a different way.
It will take time for the company to conclude how much money might come back to NZOG and whether it will only come from insurance claims.
This would be the case if the Pike River business and NZOG’s $150 million were written off.
After the explosion at Pike River Coal, NZOG’s share price fell 32 per cent, which it says was more than the total value of its $150 million investment.
In a recent report, ASB Securities said NZOG’s shareholdings in Pike were now “worthless” and Salisbury said it was concerned about it’s“languishing share price”.
"Our share price has fallen too much, taking into account the events at Pike River," Salisbury said.