Thursday 16 February 2017 12:34 PM
Solid Energy chair Andy Coupe talks resignation over Pike River re-entry
By Sophie Boot
Feb. 16 (BusinessDesk) - Andy Coupe, chair of failed state-owned coal miner Solid Energy, said at a fiery select committee this morning that he would consider resigning if the government orders the company to re-enter the Pike River coal mine.
Solid Energy's annual financial review at Parliament's commerce select committee was dominated by questions about its decision to seal the mine, which has been closed since a gas explosion in 2010 killed 29 workers. The company's chair appeared immediately after Fiona Kidman, who presented a petition asking the mine not be sealed. Family members and supporters packed the public gallery for both hearings. Prime Minister Bill English said yesterday sealing of the mine would be halted after he met with the families.
NZ First leader Winston Peters repeatedly criticised the committee's chair Melissa Lee for her allocation of questions - at one point saying she was chairing the meeting like a fascist - and clashed with Coupe, interjecting during his initial presentation and when the chair was answering questions.
Peters, who in December pledged to be first to re-enter the mine, quizzed Coupe over the possibility of unmanned entry to the drift, and criticised Coupe for not knowing the details of his coverage and premiums for his director's insurance.
Coupe said it would be a "perverse response" if Parliament changed the law to remove Solid Energy's responsibility for the safety of a re-entry crew, as Peters suggested, and he would resign if that happened as he "would not want to be director of a company that put people at risk". If the government instructed the re-entry of the mine, Coupe said he would have to consider resigning.
Labour leader Andrew Little asked Coupe whether the decision to seal the mine was driven by financial considerations, referencing a report from November 2014 which said the cost of recovery would exceed the budget.
"Safety is the reason we stopped. Notwithstanding that it was failed on safety, there was also reference to technical feasibility and financial credibility because the budget exceeds the amount agreed with the Crown in 2013," Coupe said. "Ultimately, reducing safety to a sufficient degree does come down to money. It would be foolish to say cost would not be a factor. If re-entry was to be pursued at all costs, there would probably be a way it could be done.
"We have no problem being transparent, but to the extent costs are involved, that would be a decision the creditors of Solid Energy would have to approve," Coupe said. "The decision not to re-enter was made six or eight months before we went into voluntary administration, and some three or four months before we went to the government."
The company was placed into voluntary administration in 2015 after concluding it had no realistic prospect of refinancing $239 million of debt facilities due to mature in September 2016. Its downward spiral began in 2013 when slumping global coal costs exposed its commercial error in carrying substantial debt on its balance sheet.
Labour's Damien O'Connor asked whether Solid Energy had been approached by Thiess Mining over its Spring Hill mine, which it plans to close after failing to find a buyer. Tony King, Solid Energy's chief executive, said there had been an approach from a lawyer who claimed to have backing from Thiess, but nothing of substance, and the company would be open to a buyer if one emerged.