Plunging dollar drives Pike River Coal to $9.6m loss

An unrealised foreign exchange loss of $10.8 million pushed Pike River Coal to a $9.6 million loss for the half year to the end of December. The company, which is developing a hard coking coal mine on the West Coast, said the result partly reflected the pre-production status of the Pike River mine.

The other factor was the effect of the significant decline in the New Zealand dollar exchange rate, relative to the United States dollar, on convertible bonds held by Liberty Harbor. The unrealised exchange loss of $10.8 million would reverse if the bonds were converted into shares during their term, expiring in March 2011.

All surface infrastructure needed for mining was finished. Once the ventilation shaft was reinstated, following a rock fall, the company would work through a ramp-up period to achieve full production in the fourth quarter of 2009.

The hard coking coal market appeared to be in reasonable shape despite the international downturn, Pike River said.

"Once the shaft is fixed, the stage will be set for a successful long-term mining operation, with a strong revenue stream from exports of a high quality product."

Pike River shares were down 2c to a year-low of 80c yesterday, having been up to $2.50 in June. About 11.15am a trading halt was placed on shares, at the request of the company, pending a material announcement.

- NZPA