The company at the centre of last month’s deadly mine explosions in New Zealand has been dealt another blow as it was placed in receivership.
Pike River Coal says it is in a precarious financial position and is unlikely to be able to repay its loans.
The mine’s biggest shareholder and major creditor, New Zealand Oil and Gas Ltd, has appointed PriceWaterhouseCooper as the receiver at the request of the mining company’s board.
NZ Oil and Gas says it is evident that mining will not resume for an extended period and Pike River Coal is rapidly facing insolvency.
A series of explosions rocked the underground mine near Greymouth on the west coast of the South Island in November, killing 29 miners and contractors.
Both Pike River Coal and NZ Oil and Gas say they are committed to the recovery effort and securing worker entitlements.
But the New Zealand union representing workers at the ill-fated mine says it is worried employees will not be paid what they are owed, including holiday pay and bonuses.
The union expects as many as 90 per cent of the mine’s 160 workers will be made redundant this week.
Andrew Little, the general secretary of the Engineering, Printing and Manufacturing Union, says news of the receivership is a cruel blow to workers less than two weeks before Christmas.
Meanwhile, prime minister John Key announced Queensland Commissioner for Mine Safety and Health, Stewart Bell, and former NZ Electoral Commission chief executive, David Henry, as royal commissioners in the inquiry into the tragedy.
Justice Graham Panckhurst, a Christchurch-based high court judge, was last month selected to lead the inquiry.
It will examine the cause of the explosion, the subsequent deaths of 29 men, rescue operations and safety regulations.
