Pike River Coal Mine postpones float date

Diggers carve an access road at the Pike River mine near Greymouth.

Pike River Coal Mine expects to float on the NZX by August, says a source familiar with the deal.

The company was aiming to float next month but the process has been delayed by last week's deal with Indian coke-making company Gujarat NRE Coke.

Gujarat said it would invest $20 million in Pike River and would also buy 40 per cent of the production at market prices for the life of the mine.

This is equivalent to about 400,000 tonnes a year with a present value of up to US$50 million ($80.09 million).

The number of Pike River shares acquired by Gujarat and the subsequent stakeholding of the Indian company would be determined by the share price set in an initial public offering.

The company, 69 per cent owned by New Zealand Oil & Gas, is seeking to raise between $40 million and $60 million to help fund the development of a mine on the West Coast of the South Island.

First coal is expected to be mined in the September quarter next year. Pike River hopes to achieve a market value of around $160 million.

NZ Oil & Gas owns 69 per cent of Pike River. Indian coking coal company Saurashtra Fuels bought a 10.6 per cent stake last year for $17 million.

The rest of the shares are held by private shareholders.

The mine sits on top of the Paparoa Range, 46km northeast of Greymouth.

It is estimated to contain about 50 million tonnes of coal. The venture has strong export prospects but its reliance on one site concerns some.