Pike River in perspective

Depending on how you count them, there were at least 25 delays, setbacks or serious miscalculations leading up to the deaths of 29 miners and contractors at the Pike River high grade coking coal mine near Greymouth on the west coast of New Zealand?s South Island on 19 November, 2010.

First visualised a quarter of a century ago, the entire project had become a byword for over-selling and under-performing by the listed Pike River Coal (PRC) company before a series of explosions ripped through the mine.

The litany of managerial mayhem began when there were no fewer than four delays to the initial public offering, which finally saw the light of day in May 2007.

That was followed over the next three and a half years by at least seven changes ? by this writer?s estimates ? to the forecast full production date, five returns to the long-suffering shareholders and three to parent company NZ Oil and Gas for more capital, two postponements each to the first and second shipments of coal, plus a delay each to the originally announced coal-seam intersection and the start of hydro-mining. Not included in this total were numerous rises in the estimated development costs.

These signs of critical management deficiencies were not enumerated by the royal commission in its report of November last year, but it otherwise savaged

PRC?s management. In particular, the report noted the revolving door that saw the incredible turnover of 26 managers in six months and contractors left to work in virtual isolation towards a hydro-coal production operation with the risks, the report said, ?not properly assessed?.

Then there was the almost laughable standard of health and safety management, for which no clear strategy was ever devised. Some of the most elementary safety measures were non-existent and the most alarming of warnings were ignored.

Examples of these were highlighted by the commission, which found that:

?    A backlog of incident and accident reports that had not been investigated were written off in October 2010 and little action was taken over later ones.
?    Placing a fan deep inside the mine, instead of at the surface as is usual practice, was a ?major error? in a ventilation plan that was otherwise ?insufficient?.
?    No action was taken on an inspector?s 2010 report saying the vertical ventilation shaft, with its 110m ladder, was not a suitable emergency exit.
?    High methane levels, recorded almost daily, were never properly assessed and an upgrade of a gas drainage pipeline was put on hold.
?    Management apparently failed even to read an insurance risk review in 2010, which pointed out serious deficiencies in the mine?s safety management and the specific risk of a methane explosion.
?    Directors were castigated for not being alert to ?obvious warning signs? and chairman John Dow was singled out for taking the attitude that ?things were under control unless [proven] otherwise?.

None of this could have occurred, the royal commission pointed out, had the New Zealand Department of Labour discharged its duties under the Health and Safety in Employment (HSE) Act 1991. Instead, pursuing a laissez faire attitude generated by a succession of politicians from both of New Zealand?s major parties ? the National and Labour parties ? that developed the 1991 Act over several administrations, the department slashed its mines inspectorate to just two staff, whom it failed to resource or manage adequately.

The department turned down a request to appoint a third inspector and took no action on its own advice to the company that the ventilation shaft was not a suitable escape exit.

The emergency services? response came in for a bollocking too, for there was no plan in place to deal with an explosion or similar incident and for the fact that in the immediate aftermath of the explosions, vital decisions were being made in Wellington by police officers who had no knowledge of mining.

An insight into PRC management?s thinking before the disaster came in a November 2011 exclusive interview this writer had with mine manager Peter Whittall.

Asked about gas build-ups in the weeks before the disaster, Whittall said he ?wouldn?t have considered the whole [Pike River] mining lease to be a gassy mine because on the western side it opened directly out onto an escarpment,? though in ?the areas closer to the eastern side the gas level was higher?.

?The reality is that along the western escarpment there?s a zero gas content,? Whittall said.

Such a low assessment of the gas dangers in the Brunner coal seam is difficult to understand, given that this same seam had already killed 93 men in similar disasters in 1896 (65 dead in the Brunner mine), 1926 (nine dead in the Dobson mine) and 1967 (19 killed in the Strongman mine).

Whittall also defended placing a ventilation shaft fan underground ? additional to the usual one on the surface ? about a month before the explosion. This has since been suspected of producing a spark that might have triggered the first explosion.

?I don?t see that as significant, other than it?s an uncommon thing to do,? Whittall said. ?The reason it?s uncommon is that you?d normally have [the ventilation fan] at the surface, where you?ve got best access to it from a maintenance point of view, but because we?re above the snowline we didn?t want the main fan on the surface because we?d have limited access to it in bad weather.?

Whittall is facing charges brought by the former Department of Labour (now the Ministry of Business Innovation and Employment) under the HSE Act.

VLI Drilling, a Sydney-based subsidiary of international giant Valley Longwall International, has been convicted and fined $46,800 on three charges regarding its failure to take all reasonable steps to provide a safe working environment for its staff, three of whom were among the 29 killed.

The royal commission made 16 main recommendations in its report, the most significant of which were the establishment of a new regulatory framework for underground mining and the involvement of the workforce in health and safety management in mines.

The latter is a leaf taken from the Queensland coking coal industry?s book and Labour minister Chris Finlayson has said all the commission?s recommendations will be implemented, with the regulatory framework extended to cover all mining, not just underground work.

The focus now switches to the recovery of the bodies, with Prime Minister John Key in January reversing his previous position and backing experts in planning a re-entry of the mine, which has been closed since the disaster in 2010.

Hugh de Lacy is a regular contributor to Q&M New Zealand Quarrying & Mining. This story was published in the February-March 2013 issue of Q&M and is reprinted with kind permission.

Royal Commission on the Pike River Coal Mine Tragedy. Volume 1 + Overview. 2012.
Royal Commission on the Pike River Coal Mine Tragedy. Volume 2. 2012.

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