Pike River Coal has been sold to state-owned enterprise Solid Energy under a conditional agreement, receivers for the mine said today.
The receivers said they have reached agreement with Solid Energy New Zealand for the sale of the assets of Pike River Coal.
The company went into receivership after a mine explosion that killed the 29 workers in 2010. Before the disaster, the mine was valued at about $400 million.
The series of explosions starting on November 19 trapped the bodies of the 29 men inside the mine, where they remain.
Lawyer for the families, Nick Davidson, said the sale was a welcome surprise.
Initial reactions were of "considerable relief" after a long period of knowing very little about a potential sale, he said.
The families wanted to know more about the Trust funding and its plans for body recovery.
It was not surprising that Solid Energy were buying the mine, as it had the infrastructure, people and knowledge to make it work, he said.
A spokesman for some of the Pike River families, Bernie Monk, said it was a very emotional day for the families.
''I don't mind admitting I cried with some of the other family members.''
The sale was the most exciting news they had received in the past 15 months, he said.
Solid Energy chief executive Don Elder called Monk and other family members to tell them about the sale before it was made public.
Monk said: ''To me, we have people in place we can trust and that we can have a dialogue with.''
Elder had assured him recovery of the men's bodies and opening the mine were on the agenda.
Grey District mayor Tony Kokshoorn said the sale was a "win-win'' for the West Coast.
He said Solid Energy had enough cash flow to make the mine work, whereas he believed Pike River Coal was forced to take shortcuts as it was always struggling financially.
"The body recovery will now still go ahead. Solid Energy have always said that," Kokshoorn said.
About a month ago, he met with the receivers and Prime Minister John Key to ask for a commitment that the body recovery would happen.
The group agreed to form a trust to enable the bodies to be recovered on the principle that the must be mine sold first.
Kokshoorn would not comment on how much money had been committed by the groups. However, there was "enough money to do the job".
The Government will work with the receivers and Solid Energy regarding the transfer of the Mining Permit and access arrangements, as well as the establishment of a trust to oversee efforts to enter the mine and facilitate body recovery.
PricewaterhouseCoopers partners John Fisk, David Bridgman and Malcolm Hollis, receivers of the coal company, today announced the agreement with Christchurch-based Solid Energy.
''The agreement is conditional upon due diligence by March 30, together with other conditions, with settlement expected in May or later depending on approvals being obtained,'' Fisk said.
''We, as the receivers, are pleased with this agreement as we consider it the best way forward for all parties. As part of the agreement, negotiations will continue with the Crown to establish a trust that will help oversee efforts to enter the main area of the mine and facilitate body recovery - if it is safe and technically feasible.
''In the meantime, work on the tunnel reclamation is continuing. We will provide further updates as appropriate,'' Fisk added.
''No further details of the transaction or any related matter can be released until the agreement is unconditional.''
Energy and Resources Minister Phil Heatley said the purchase was welcomed by the Government.
"This is a positive step towards a commercial re-opening of the mine. We expect Solid Energy to commit to use its best endeavours to recover the bodies of the deceased miners," Heatley said.
"Any plan for re-opening the mine and recovering the bodies will need to be safe and credible. The Government is not prepared to see any further lives lost at the mine."
The Government would work with the receivers and Solid Energy regarding the transfer of the mining permit and access arrangements, as well as the establishment of a trust to oversee efforts to enter the mine and facilitate body recovery, he said.
Before Christmas Fisk said there were several international parties interested in the mine.
It is understood buyers were put off by the need to recover to the bodies of 29 miners.
New Zealand's largest coal miner Solid Energy had earlier signalled a bid for the Pike River coalfield but the receiver has not disclosed who has made the other approaches.
Parties named as possibly interested include Pike River Coal associate Gujarat NRE and Australian-listed coal developer Bathurst Resources, which already has some resources on the West Coast in the Buller region.
Last year Fisk said he could only confirm interest from Solid Energy, but said the potential overseas buyers came from Asia, the Americas and Australia.
A year ago, Elder warned necessary preliminary work ahead of any fresh coal extraction at Pike River following the explosions could take years and cost $50 million to $100 million.
At the time he confirmed the miner's interest in Pike River and was "almost certainly the only company with the credibility, knowledge, experience and track record to mine the resource safely and economically".
The West Coast mine was one of the most challenging coal resources in the world to develop with further substantial exploration needed, probably two to three years of drilling, he said.
The existing mine assets might not form a significant part of any future mining operation, leaving only the coal permit and access agreements as the primary assets of value, he added.
State-owned Solid Energy, if successful with a bid, would likely look to develop the mine in a joint opencast/ underground approach, Elder said at that time.
It would need to get part of the surrounding land removed from schedule 4 protected conservation land for an opencast operation which would be in difficult access and resource conditions.
More than $300 million had been spent on mine development before it failed.
The mine has been said to contain coal worth up to $6 billion.
The receivers have been look at ways to sell the assets and recover value for the creditors, including secured creditors, the BNZ and New Zealand Oil & Gas, the latter a part shareholder in Pike River Coal.
Yesterday, the receivers confirmed further layoffs at the mine.
Nine staff, eight based at the mine and one in Wellington, had been given a month's notice, Fisk said yesterday.
The remaining 11 staff had the technical capability that was needed for the next stage of recovery, he said.