Pike River Coal Ltd has made good progress towards its goal of restoring ventilation to its coal mine on the West Coast of the South Island following a rockfall in February.
The mine is yet to export any coal and delays in its development has caused the company to raise $45 million this year. While production has been delayed the price of hard coking coal has been falling.
The company has employed 110 people out of the total workforce of 150 required for full production.
Pike River said today the first export shipment of 60,000 tonnes of coal to Japan was due in the July-September 2009 quarter.
Coal production with one of the continuous miner machines was to recommence at the start of May, once reaming and lining of a 600mm diameter "slimline" ventilation hole was completed.
Full ventilation would be restored by the end of May with completion of an angled shaft bypass around the main ventilation shaft where it was blocked by a rock fall.
Large-scale production would come with the arrival from Australia of a high pressure water cannon, which would cut coal at a rate averaging more than 2000 tonnes a day.
Hydro mining was scheduled to start during the October-December quarter, boosting production to one million tonnes a year.
The economic downturn has reduced demand for steel and, as a result, premium hard coking coal prices have fallen from the record $US300 ($NZ532.76) per tonne in the 2008 Japanese fiscal year.
Pike River said the recent annual benchmark price-setting process for the year ended March 31, 2010 saw premium hard coking coal priced a $US128 per tonne.
"Pike River anticipates a price at or about this level when it completes its own negotiations.
"That would still be approximately $US30 per tonne higher than forecast for this period at the time of the company's 2007 initial public offer."
Source: National Business Review, NZ
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