Commission's Report - Volume 1
What Happened at Pike River
On Friday 19 November 2010 at 3:45pm there was an underground explosion at the Pike River coal mine. Twenty-nine men lost their lives, and their bodies have not been recovered. Their names and details appear on pages 4–5 (see: Pike River mine memorial).
Two men survived the explosion. They were in the stone access tunnel (drift), a distance from the pit bottom area where the main workplaces were located. Although initially overcome, Daniel Rockhouse rescued himself and his colleague Russell Smith.
The New Zealand Police led the emergency response that involved emergency services, and mines rescue crews from New Zealand, New South Wales and Queensland. Despite strenuous efforts by everyone involved, a lack of information concerning the conditions underground prevented a rescue attempt.
A second explosion on Wednesday 24 November extinguished any hope of the men’s survival. The emergency focus changed to recovery of the bodies.
On 29 November 2010 the prime minister announced the government’s intention to establish a royal commission. In December 2010 the commission’s terms of reference and the appointment of three commissioners, the Hon. Graham Panckhurst, David Henry CNZM, and Stewart Bell PSM, the Commissioner of Mine Safety and Health for Queensland, were announced. The terms of reference are on pages 6–9 (see: Terms of Reference).
In broad terms the commission was required to report on:
- the cause of the explosions and the loss of life;
- why the tragedy at Pike River occurred;
- the effectiveness of the search, rescue and recovery operation;
- the adequacy of New Zealand mining law and practice and the effectiveness of its administration; and
- how New Zealand mining, and associated conservation and environmental, law and practice and its administration compares with that in other countries.
The commission was also asked to make recommendations about the prevention of mine disasters, the improvement of search, rescue and recovery operations, any necessary changes to mining law and practice and how to make the Pike River mine safe should it not be reopened.
The immediate cause of the tragedy was a large methane explosion. Methane is found naturally in coal. It is released during mining and also accumulates in mined out areas. A group of mining experts assembled by the police and the Department of Labour (DOL) concluded that a substantial volume of methane fuelled the explosion. The area most likely to contain a large volume of methane was a void (goaf) formed during mining of the first coal extraction panel in the mine. A roof fall in the goaf could have expelled sufficient methane into the mine roadways to fuel a major explosion. It is also possible that methane which had accumulated in the working areas of the mine fuelled the explosion, or at least contributed to it.
Methane is explosive only when diluted to within the range of 5 to 15% in volume of air. Following a roof fall methane would be diluted as it was carried through the mine by the ventilation system. It is not possible to be definitive, but potential ignition sources include arcing in the mine electrical system, a diesel engine overheating, contraband taken into the mine, electric motors in the non-restricted part of the mine and frictional sparking caused by work activities.
Effective methane management is essential in an underground coal mine. Undoubtedly there was a failure to control methane at Pike River on 19 November 2010.
The commission has endeavoured to establish both the operational factors and the systemic reasons that contributed to the tragedy. The inquiry was not limited to events at the mine, but extended to the actions of the regulators and the effectiveness of mining regulation and practice in New Zealand.
Some major themes became evident in the course of the inquiry:
- This was a process safety accident, being an unintended escape of methane followed by an explosion in the mine. It occurred during a drive to achieve coal production in a mine with leadership, operational systems and cultural problems.
- Such problems coincided with inadequate oversight of the mine by a health and safety regulator that lacked focus, resourcing and inspection capacity.
- The legal framework for health and safety in underground mining is deficient.
- Those involved in the search and rescue were very committed, but the operation suffered from an absence of advance planning for a coal mine emergency and from a failure to properly implement the principles of the New Zealand co-ordinated incident management system (CIMS).
- The families of the 29 men received generous community support, but would have benefited from better communications during the search, rescue and recovery phases.
Coal has been mined in New Zealand since about 1850. It was initially mined almost exclusively underground, but open cast mining is now predominant, producing over 80% of total production. New Zealand mining conditions are typically complex and characterised by faulted and dipping coal seams. Comprehensive geological exploration is essential to define the coal reserve and facilitate the planning and development of a successful mine. Mining methods such as hydro mining, suited to the difficult conditions, are required.
The New Zealand coal mining industry is small. Annual production is about 5 million tonnes – approximately 2% of Australia’s production. In 2010 fewer than 2000 people were working in 22 coal mines, only five of which were underground.
A failure to learn
New Zealand’s health and safety record is inferior to that of other comparable countries. The rate of workplace fatalities is higher than in the United Kingdom, Australia and Canada, worse than the OECD average and has remained static in recent years.
New Zealand also has a history of underground coal mine tragedies including:
Huntly, Ralph’s colliery
Huntly, Glen Afton No. 1 mine
Lessons from the past, learnt at the cost of lives, have not been retained.
The commission’s terms of reference require it to compare New Zealand mining law and practice, its administration and implementation, and its interaction with other requirements to that in ‘other countries’. New Zealand’s most appropriate comparators are Queensland and New South Wales. These states mine 97% of Australia’s coal production. The New Zealand industry has a close working relationship with the Queensland and New South Wales industries. There is a mining labour flow across the Tasman, and New Zealand operators consult Australian mining standards. These two states are frequently used for comparative analysis throughout the report.
Location of the mine
The mine is remote on the eastern side of the rugged Paparoa Range, 45km north-east of Greymouth. The coal seam lies deep below the surface and mainly within the Paparoa National Park. The seam dips in an easterly direction between a sheer escarpment to the west and the Hawera Fault to the east.
Pike River Coal Company Ltd (Pike) was formed in 1982 and acquired by New Zealand Oil & Gas Ltd (NZOG) in 1998. Over a 13-year period Pike explored and then acquired the necessary authorisations for the mine, including a mining permit, an access arrangement and resource consents. Initial exploration indicated a recoverable coal reserve of 19 million tonnes of high-quality hard coking coal.
In 2005 the Pike board decided to proceed with development of the mine. In May 2007 Pike offered shares in the company for public subscription and allotted 85 million one-dollar shares to over 5000 new investors. NZOG remained the major shareholder, but no longer held a controlling interest. Development costs were estimated at $124 million, with annual coal production of more than a million tonnes projected by 2008. Pike River was developed as an underground mine, because open cast mining was not economic owing to the depth of the Brunner coal seam.
The construction of an access road began in September 2006, followed by a 2.3km tunnel (drift) driven through stone to access the eastern side of the coal seam. In November 2008 the mine was officially opened.
The coal seam was intersected to the west of the Hawera Fault and development of the pit bottom area began in early 2009. By November 2010 the extent of underground development was as shown in the mine plan below.
Figure 1: The mine plan as at November 2010
There were two mine infrastructure areas (pit bottom in stone and pit bottom south), three main roadways, the hydro-mining panel and further development areas to the north-west. Spaghetti Junction was the meeting point of the drift and pit bottom, with two surface-to-mine shafts nearby – the main ventilation shaft, and the slimline shaft, at the bottom of which was a so-called fresh air base (FAB). Pike River was a small mine, still at an early stage of development.
The company situation
Pike’s knowledge of the geology and the extent and location of the coal seam was based on an initial 14-borehole exploration programme, supplemented by a similar number of boreholes drilled subsequently. These provided insufficient geological information, which led to adverse unexpected ground conditions hindering mine development. Construction of the drift took much longer than anticipated, as did mine roadway development. Delays were caused by a downthrust between faults, called a graben, which created a zone of sandstone instead of coal, and the collapse of the bottom section of the ventilation shaft during construction. The collapse meant that a bypass had to be built to reconnect to the upper part of the shaft about 50m above pit bottom. The first coal sales, totalling 42,000 tonnes, were delayed until 2010.
Development costs escalated over the $143 million figure projected in 2007. Pike required capital and during 2010 it raised $140 million from shareholders, was seeking another $70 million as at 19 November and also borrowed $66 million from NZOG.
In September 2010 the Pike chief executive, Gordon Ward, resigned and was subsequently replaced by Peter Whittall. The board demanded ‘better’ forecasting from management, as Pike had ‘over-promised and under delivered’.
In November 2010 Pike was still in start-up mode and considerably behind its development schedule. Market credibility, capital raising, higher coal production, increased ventilation capacity, methane management and upskilling the workforce were significant challenges facing the company.
History demonstrates that problems of this kind may be the precursors to a major process safety accident. Whether an accident occurs depends on how the company responds to the challenges and the quality of its health and safety management.
Pike River Coal Ltd (renamed from Pike River Coal Company Ltd in March 2006) set out to develop a safe, world-class coal mine. The company was also very committed to good environmental management, as was acknowledged by conservation leaders. Underground coal mining is both hazardous and complex at the best of times. Pike faced added challenges as it developed a new mine in a mountainous area where difficult geological conditions required some innovative solutions.
Pike recruited some well-qualified managers, many from overseas, including, for instance, Douglas White in early 2010, who was a former deputy chief inspector of mines in Australia. Over several months he tried to introduce some health and safety initiatives at the mine.
Pike also obtained advice from New Zealand and Australian consultants throughout the various stages of the mine’s development. The commission’s attention was drawn to the number, 36, and qualifications and experience of these consultants. They provided advice across a range of disciplines, including geotechnical engineering, ventilation, strata control, electrical safety and methane management, to mention a few.
These aspects are acknowledged at the outset partly because the commission’s analysis of Pike River’s operation and systems in 2010 is necessarily concerned with aspects, often negative, of likely relevance to the cause of the explosion. This does not mean that the commission has overlooked the company’s aim to develop a productive and safe mine. Unfortunately Pike lost sight of that aim as its drive for production intensified.
A short-term focus
Pike’s long-term mine plan had been to develop roadways to the north-west corner of the mine, establish a second intake and begin hydro mining in that area, and for mining to retreat back to pit bottom over the life of the mine – approximately 19 years. However, development delays and the consequent need for cash flow led to the need for a quick solution.
In September 2010 Pike started mining in the hydro panel close to pit bottom. The second intake, had it been developed, would have doubled as a walkout egress from the mine and also improved the efficiency of the ventilation system.
Governance by the board
The Pike board of directors was required to set the strategic direction of the company and delegate its implementation to management. The directors then had to ensure that appropriate systems were in place, including risk management, internal reporting and legal compliance systems, and also monitor the performance of management. A two-man health, safety and environment committee was to lead this process and report to the board. It could commission external reports and audits.
The board received a monthly report containing a health and safety section. Although this was helpful, it did not cover the hazards relevant to a catastrophic event such as an explosion. The board did not assess critical design and health and safety issues, including, for example, the location of the main fan underground at pit bottom. An insurance risk survey received in July 2010 identified serious concerns about the hazards posed by hydro mining, windblast and a gas explosion, and urged the need for a comprehensive risk assessment of the mining operation. Neither the board nor its committee saw the report.
The mine manager attended a board meeting four days before the explosion and told the directors that gas management was ‘more a nuisance and daily operational consideration than a significant problem or barrier to operations’. The board was not well placed to assess this assurance.
The board did not verify that effective systems were in place and that risk management was effective. Nor did it properly hold management to account, but instead assumed that managers would draw the board’s attention to any major operational problems. The board did not provide effective health and safety leadership and protect the workforce from harm. It was distracted by the financial and production pressures that confronted the company.
At the time of the explosion the management team at Pike River comprised Peter Whittall, chief executive officer; Douglas White, site general manager; Stephen Ellis, production manager; and seven department managers. However, there was constant management change over the years. There were six mine managers in the 26 months before the explosion. Mr Ellis was to become the next mine manager as soon as he acquired the required New Zealand qualification. In the meantime Mr White was the mine manager on top of his other duties. Gordon Ward was the chief executive until succeeded by Mr Whittall in October 2010. There was also significant change in other management positions.
Throughout 2010 the management team faced planning changes and operational challenges, including improving coal production, establishing the hydro panel, commissioning the new main underground fan, upgrading the methane drainage system and resolving problems with mining machinery. These coincided with the drive to achieve coal production.
Pike’s mine management plans and procedures needed considerable attention. The health and safety management plan was largely in draft, partly while awaiting technical input from other managers. The ventilation management plan was deficient, and Mr White assumed responsibility for ventilation in the absence of a ventilation engineer when his workload was already formidable.
The investigation of incident reports was haphazard, with the result that in October 2010 a backlog of outstanding investigations was written off. Other information from underground, including methane readings from fixed and portable sensors, was not systematically analysed and the problems addressed.
Executive management, Messrs Ward, Whittall and White, was focused on hydro coal production, as was the board. Associated risks were not properly assessed. At the executive manager level there was a culture of production before safety at Pike River and as a result signs of the risk of an explosion were either not noticed or not responded to.
Pike recognised the need for good training programmes, given the inexperience and diversity of much of its workforce. Miners received comprehensive induction training and continuing training was introduced in 2010 but deferred as the push for production gathered momentum. Numerous contractors were engaged on a long-term basis. Contractor health and safety management was less effective. The induction and underground supervision of the smaller contractors in particular was lax. This was recognised and was about to be addressed when the explosion intervened.
Underground, difficulties arose because of a shortage of underviewers and deputies, a high ratio of inexperienced to experienced miners and the presence of overseas miners unused to New Zealand mining conditions. A serious problem was the workers’ practice of bypassing safety devices on mining machinery so work could continue regardless of the presence of methane. This was reckless behaviour. There were also reports of other conduct and incidents caused by inexperience, inadequate training and failures to follow procedures.
A mine ventilation system must provide fresh air throughout the workings, and take return (foul) air out of the mine. At Pike River the intake of fresh air was from the portal, and return air was expelled to the surface up the ventilation shaft. The main fan and movable auxiliary fans circulated the air, with the assistance of ventilation control devices that guided air flow and stopped the mixing of intake and return air.
The original mine plan specified two main fans located on the mountainside next to a ventilation shaft. Two planning changes were made. Pike decided to relocate the fans underground in stone at the bottom of a ventilation shaft. In 2007 the site of the ventilation shaft was moved to its eventual location north of Spaghetti Junction. Placing a main fan underground in a gassy coal mine was a world first. The decision was neither adequately risk assessed nor did it receive adequate board consideration. A ventilation consultant and some Pike staff voiced opposition, but the decision was not reviewed. Putting the fan underground was a major error.
The fan significantly increased Pike’s ventilation capacity, at least in the short term. After the explosion, however, the joint investigation expert panel used computer modelling to establish the ventilation sufficiency at the time of the explosion and found air supply to the inbye (further into the mine) areas of the mine would have been fragile, particularly in an emergency.
Ventilation consultants advised Pike on an as required basis, but no one at the mine had dedicated responsibility for ventilation management.
The main fan failed in the explosion. It was not explosion protected. A back-up fan at the top of the ventilation shaft was damaged in the explosion and did not automatically start as planned. The ventilation system shut down.
To provide safe working conditions in a gassy coal mine effective methane management is essential. Methane levels at Pike River were managed through the ventilation system and some pre-drainage of the coal seam from in-seam boreholes.
The in-seam boreholes were primarily to map the limits of the coal seam and were not designed for pre-drainage. Some pre-drainage still occurred, requiring Pike to install a gas pipeline to vent methane to the surface. By April 2010 the pipeline could not cope and an underviewer emailed management, stating: ‘History has shown us in the mining industry that methane when given the write [sic] environment will show us no mercy. It is my opinion that it is time we took our methane drainage … more seriously and redesigned our entire system.’
Gas consultants were engaged and advised that the pipeline required urgent upgrading. As a stopgap measure methane was ‘free vented’ into the mine’s return airway to be handled by the ventilation system. The upgrade of the drainage pipeline was put on hold and free venting of large volumes of methane continued up to the time of the explosion. Free venting is no longer recognised as normal practice in modern underground coal mines.
Continuous monitoring of methane levels is essential to understanding the underground atmosphere and trends. Pike installed fixed sensors that reported to the control room, but at the time of the explosion there were too few and they were not well sited. There were only four fixed sensors in return air. One in the hydro panel reported to the operator of the water jet, and another was not functional. Sensors were also located at the bottom and near the top of the ventilation shaft. The bottom one was broken for 11 weeks before the explosion and the other was unreliable and could not read above 2.96% methane. There were no fixed sensors reporting to the surface from the working areas of the mine inbye of the main fan.
Gas readings were also taken throughout the mine using hand-held detectors and readings were noted in shift reports. Methane sensors attached to machinery were generally well maintained and calibrated to trip power at a set methane level. There was constant tripping on some machines, which led to the bypassing of sensors by some workers.
Despite its limitations, the monitoring system showed there was a serious methane management problem. After hydro mining began, high readings – many dangerously high – were recorded most days. This information was not properly assessed and the response to warning signs of an explosion risk was inadequate.
Considerable electrical equipment was located underground at Pike River. High-voltage cables through the drift supplied power to underground. At Spaghetti Junction cables were intertwined with utility services, including drainage pipes carrying methane, creating a hazard.
Regulations require a gassy mine to have a restricted zone where all electrical equipment must be incapable of sparking an explosion. The dividing line at Pike River is shown below.
Figure 2: Boundary between the restricted and non-restricted zones
The non-restricted zone, as drawn, allowed unprotected electrical equipment to be located on the right-hand side of the line in most of pit bottom south. The zone was fixed without a risk assessment, after electrical equipment was already installed and after the location of the main fan motor had been determined.
A number of variable speed drives (VSDs) were located underground. VSDs controlled power supply to the fan and water pumps. There were problems with the VSDs, one of which was replaced and a number of which were removed for repair. The extent of these problems underlined the need for a comprehensive risk assessment of the electrical installations underground at Pike River.
Mine documents suggested the appointment of a senior electrical engineer to oversee electrical safety in the mine. An appointment was made but he had not started at the time of the explosion. DOL did not have the capacity to inspect Pike’s electrical systems following the major underground installations.
Investigations are continuing to establish whether an electrical cause could have initiated the explosion, but answers will depend on gaining entry into the mine.
Hydro mining started at Pike River in September 2010. This is an uncommon and specialised mining technique that uses a water jet to cut the coal face and requires expert design of the mining panel and equipment. Operators must be trained to follow a set cutting sequence and to direct the water jet to avoid the undue disturbance and release of methane. The hydro panel was developed as shown in this plan.
Figure 3: Diagrammatic outline of hydro panel
The water jet was mounted on the monitor, with an operator stationed at the guzzler. The goaf was unsupported and roof falls were expected. The intake of fresh air is represented by the blue arrows and the outflow of return air by the red arrows.
When hydro mining began, the workers had the incentive of a $13,000 bonus if they met production targets by late September, after which the payment would decrease from week to week. Despite a number of set-up problems the targets were met towards the end of the month. After the new fan was commissioned, ventilation to the hydro panel improved and during October 2010 hydro mining became a two-shift, 24-hour operation.
In October the width of the extraction area was increased from 30m to 45m, although a consultant geotechnical engineer had indicated the risk of a major roof collapse in the goaf could not be excluded. On 30 October a significant roof fall did occur, causing a pressure wave that took out the stopping in the hydro cross-cut intended to separate intake and return air. Methane readings were high, but there was no explosion.
Hydro mining continued into November without reassessment of the risk of further roof falls in the goaf. Production levels did not improve, and spikes in the methane levels continued to be recorded in the weeks leading up to the explosion.
 Pike River Coal Ltd, Roadway Names: Rescue_101119_208, 4 August 2011, MBIE3000010015/1. (Labels added by the commission and geological information taken from: Pike River Coal Ltd, Activities Report: Quarter ended 30 September 2010*, DAO.007.11332/5.)
 Pike River Coal Ltd, Minutes of a Meeting of Directors, 13 September 2010, DAO.007.05996/9.
 Pike River Coal Ltd, Minutes of a Meeting of Directors, 15 November 2010, DAO.007.29383/3.
 Email, Brian Wishart to Jimmy Cory, 11 April 2010, DAO.025.32975/1.
 Pike River Coal Ltd, Plant Location and Ventilation Plan: Rescue 101119_181, 22 March 2011, DAO.010.13140/1. (Extract of the plan modified by the commission)