1 Dec 2010

Businesses lose work in mine shutdown

10:30 am on 1 December 2010

A West Coast engineering firm has lost about a third of its business as Pike River Coal suspends major contracts, in the latest fallout from the disaster in which 29 workers were killed.

The men died following explosions at the Pike River Coal mine near Greymouth which began on 19 November.

As the company battles to put out a coal fire inside the mine, managers have begun met contracting firms who have had staff working underground, and have started a commercial review of all other contracts, including individual labour agreements.

Among the affected firms is Grey Brothers Engineering, which services West Coast mines, and is owned by Brightwater Group.

Chairman Mike Simm says Pike River Coal accounted for roughly a third of its current workload. In the short term the gap can be plugged with work from other mines keeping the 40 jobs at Grey Brothers Engineering safe for now, though he says it may be a different story later on.

Chris Yeats' construction firm built the mine's pump house and shower block, and at the time of the explosion three of his staff were engaged in concreting work underground.

He says that job represented about 10% of his company's workload, and while the firm has enough other work, there's no denying the hit the West Coast economy is going to suffer following the mine blast.

Construction firm McConnell Dowell built the mine's access tunnel and, more recently, has been doing roadway development there. The workload was due to be scaled back and general manager Roger McRae will be contacting Pike River Coal to discuss what happens now.

Solid Energy, which has the contract to freight Pike River coal to Lyttelton Port and beyond, isn't commenting on what the mining disaster will mean for it financially.

Pike River Coal's contracting bill is understood to be worth about $80 million a year, while its wage bill is understood to be about $13 million a year.

Grey District mayor Tony Kokshoorn says the local economy coped before the Pike River Coal mine opened and can do so again.