Pike River Coal Ltd said it will cost between $700,000 and $1 million to overhaul a Waratah continuous mining machine it has had trouble with.
The operator of a new coal mine on the West Coast of the South Island said in a quarterly report released today that the revised production schedule it released on October 19 did not assume operation of either of two continuous miners supplied by Waratah Engineering.
"This is because one is poised for a redesign and overhaul and the other, while still underground ahead of a possible overhaul depending on the performance of its twin, remains unreliable," Pike said.
The mine has commissioned hydro mining equipment but its use is reduced by problems with the machines that cut roadways in the mine. Pike said it is happy with its leased, reconditioned Sandvik ABM20 continuous mining machine that began operating underground in August.
"The ABM20, which has been achieving average development rates of more than 13m per day, has the ability to cut and bolt simultaneously -- a significant improvement compared to the capacity of our existing machines," Pike said.
The drives on the first of the two Waratah continuous miners are being readied for conversion from the troublesome electric system to a hydraulic system.
A number of upgrades and engineering redesigns will also be undertaken on the Waratah machine at the same time. The cost of the overhaul will be between $700,000 and $1 million.
This machine is expected to be back underground and operational before Christmas. This will give the mine a fleet of two ABM20s, one overhauled Waratah continuous miner and the roadheader which has continued to perform reliably. A decision on upgrading the second Waratah machine will be made depending on the performance of the first upgraded machine.
During hydro-mining commissioning and ramp-up of production the coal preparation plant has been stockpiling coal with a slightly higher ash content than the 1 percent premium target. Pike River said it is looking to place its next shipment at this higher ash level and is finalising details for shipment later in 2010.
Its second shipment on September 6 was sold at a slight discount to premium due to higher ash levels.
The company has a $25 million short-term working capital facility until mid-December from cornerstone shareholder New Zealand Oil&Gas Ltd.