12 Jul 2011

Energy boss accused of talking down Pike mine's value

8:18 pm on 12 July 2011

The lawyer representing Pike River Coal Ltd executives has accused the head of state-owned Solid Energy of talking down the value of the coal mine to improve his company's chances of buying it.

The Royal Commission headed by Justice Panckhurst began at the Greymouth District Court on Monday and will try to establish what happened at the West Coast mine where 29 men were killed in explosions in November last year.

Pike River Coal Ltd went into receivership in December.

On Monday, Solid Energy chief executive Don Elder said the Pike River Coal project was overly optimistic, and production and financial problems had the potential to create many safety risks.

During four hours of heated cross-examination on Tuesday, Dr Elder's evidence was challenged by Stacey Shortall, the lawyer representing Pike River chief executive Peter Whittall and others.

Ms Shortall said Solid Energy was making a bid for the mine and suggested to Dr Elder that it was in his company's interests to talk down the value of its assets and to discourage other bidders.

Dr Elder said he was offended by that, saying he was interested only in assisting the Royal Commission to find the truth about the disaster.

Ms Shortall questioned his evidence that the Pike mine's geology was difficult and the analysis of coal reserves inadequate.

Geologist had concerns over mine data

A geologist says had concerns over the adequacy of data about the mine's site and distanced herself from Pike River Coal Ltd.

Jane Newman is an expert on the geology of the Brunner coal seams where the Pike River mine operated.

Dr Newman told the hearing on Tuesday she thought the geological data was sketchy and had put those concerns in writing a decade ago.

"It felt to me as though I was endorsing an approach to the geology that I considered was - I'll try to find a polite way - inadequate, really. So I really heard very little after about July 2009, because I had somewhat distanced myself."

Dr Newman says she proposed a two-phase plan for investigating the geology, but the second phase did not happen.