KEY POINTS:
Pike River Coal's first annual meeting as a listed company yesterday coincided with another milestone - the return of its shares to near their $1 July issue price.
The company, tunnelling in West Coast "tiger country", was forced to budget a further $11 million to the original $174 million cost of developing the 2.3km tunnel, after its float raised $85 million. Shares had drifted as low as 80c in the weeks following its issue.
Pike shares hit $1 on Tuesday and closed at 99c yesterday.
Chief executive Gordon Ward told up to 90 shareholders at the mine site 46km northeast of Greymouth that the company expected the tunnel had another 666 metres to go and would hit coal about the end of April.
Costing for the project had allowed for difficult conditions but not to the extent encountered.
"That is about one month later than previously forecast, although there is still potential for some slippage of one to three months. However, that is an inherent risk with any tunnel construction project," Ward said.
The company intends to mine about 17.6 million tonnes of high grade, low ash, coking coal identified as recoverable from the Brunner seam over 19 years.
Ward said prospects for coal prices remained strong.
Pike River hard coking coal used in the steel-making process is forecast to sell at about US$120 ($159) to US$125 a tonne next year, compared with US$96 per tonne now.
Coking coal prices from 2010 onwards are expected to lift due to strong international demand, particularly from China and India.
Long-term, Pike River coal will be carted by road to Greymouth and shipped to Port Taranaki for export to India, Japan, Brazil, Europe and other markets.
The ships for the West Coast Coal Company Limited (WCCC) consortium are not due until the end of next year.
In the first six months of exporting of about 60,000 tonnes of coal other transport options are being explored, including shipping by barge from Greymouth or using railing through Solid Energy's transport chain to Port Lyttelton.
