Spotlight on mining safety
A near-fatal accident at Solid Energy's Spring Creek mine, in the hills north of Greymouth, has pushed underground mine safety back into the headlines, coming two months ahead of a royal commission's report into the Pike River Coal disaster that claimed 29 lives.
The Spring Creek event, in which a worker was struck in the head by a falling piece of coal while preparing roof supports, happened days after a fire at Waihi's Newmont gold mine, and a month after Solid Energy's Huntly mine was temporarily shut down over high methane levels.
And while the incidents were unrelated and happened at facilities seen to be at the forefront of health and safety best practice in New Zealand, their frequency suggests mine safety is still a major issue even with the spectre of Pike River hanging over the industry.
That perception is backed by recent figures from industry health and safety body Minex, which show the total number of underground injuries - both minor and more serious - climbed steadily from four in December to 22 as of the end of March.
In the first quarter of this year alone eight injuries required outside medical attention - six of which occurred at Solid Energy facilities. That's the same number as in the preceding seven months.
Solid Energy, the state-owned energy firm, dominates the New Zealand mining sector with revenues of $829 million last year. It is also the last company planned to be partially floated on the NZX as part of Government's mixed ownership model.
“With the experience of Pike River, where investors got badly burned, [safety] is an important factor,” said Alan Moore, a veteran of the investment sector, with 25 years institutional experience under his belt.
“But looking out three to four years, and as a result of the [Pike] inquiry the greater focus from Government, I imagine safety standards will be far more monitored and brought up to top international spec.”
Moore said Solid Energy was attractive from an institutional portfolio perspective in that it would be one of the few energy resource firms on the Stock Exchange versus six electricity companies once the SOE float was complete.
“If you're investing in a hole in the ground and someone has to go down it, you can never completely eliminate the risk, but it will be a managed risk,” he said.
As a state-owned enterprise and a major player, Solid Energy is expected to set the bar. The firm provided background information for this article but refused speak on the record.
On its website, it said it had made significant progress in reducing the frequency and severity of lost-time injuries in recent years, and was on par or ahead of Australian coal mining. However, a major effort was required to make the final step towards its goal of zero injuries.
Its figures show the path to reducing injuries has been bumpy.
Last year, the firm lost an average of 88.6 hours from injury per million work hours. That was down from 106.9 injury hours in 2010, 280 injury hours in 2009, 248 injury hours in 2008, and 197 injury hours in 2007.
Mining has claimed 51 lives since 1967.
According to industry commentators, health and safety standards have been improving since the November 2010 Pike River disaster. But change is slow and complicated by regulatory inertia, under-resourced watchdogs, and divided industry views between smaller players and resource behemoth Solid Energy.
Ironically, Pike River appears part of the problem. A royal commission of inquiry was set up almost immediately after the disaster, tasked with finding what went wrong and identifying what changes were needed to avoid a similar tragedy.
At the time of the accident, Pike River was majority-owned by energy exploration company New Zealand Oil & Gas, which also held some of the firm's credit lines, and the business was under pressure to start delivering coal after several missed production deadlines.
The accident put mine health and safety in the spotlight, with the Government shutting Solid Energy's Spring Creek operations for six months immediately after the disaster while it checked safety standards.
Solid Energy has since bought the assets of Pike River but said it could take years even to assess resuming commercial mining there.
The royal commission's report is due at the end of September, but won't be made public immediately. In the intervening 22 months since the Pike River disaster, no new regulation pertaining to mine safety has been passed by the Government.
Peter Atkinson, a Minex board member and former director of New Talisman Gold, said the lack of change stemmed from a concern of having to backtrack on new rules once the report was released.
“Any regulatory work could be superseded [by the royal commission] and most industry members are waiting to see the outcomes,” he said.
In the meantime, industry players have been relying on what they perceive health and safety practice to be, which means each mine operator can have their own interpretation of the rules.
Mine health and safety is being policed by the high hazards unit, a four-person team set up by the Government after Pike River to enforce compliance.
Ged O'Connell, assistant national secretary at the Engineering Printing and Manufacturing Union and representative for unionised mine workers, said even the high hazards unit was operating on its own interpretation of what New Zealand health and safety best practice was.
It was this team that temporarily shut the Huntly mine in June after a surprise inspection discovered elevated methane levels, according to O'Connell, a move opposed by Solid Energy who said the gas was being managed and it was well within tolerance ranges. Whether it was justified or not, the clash of views underscores the difficulties of operating from different health and safety rule books.
The high hazards unit, while broadly welcomed by the industry as an important step towards improving mine safety, has also generated contention in the sector.
The four-person team has to ensure compliance across New Zealand's three underground coal mines, six underground gold mines, 19 opencast coal operations and two opencast gold mines.
The unit is also similarly tasked for all geothermal operations, as well as onshore and offshore oil production facilities.
It has struggled to find a permanent chief inspector, with the role vacant now Gavin Taylor has recently returned to Australia following the end of his six-month contract. A replacement is being sought but in the meantime Taylor will continue to support the unit, spending two weeks in New Zealand on a quarterly basis.
The Ministry of Business, Innovation and Employment rejected comments that the role remains vacant because local salaries don't match those being offered in Australia, but admitted “the international talent pool for this role is extremely small”, a spokesman said.
David Bell, a mining geologist, industry consultant and lecturer at Canterbury University, is concerned the scope of the team is too wide, has too few boots on the ground, and lacks the specialised knowledge of the now defunct mine inspectorate.
The specialised division, which consisted of six inspectors at its peak, was dissolved in the early 1990s in favour of self-regulation. Mining fell under the blanket of general health and safety compliance, with the process controlled by the Department of Labour (now part of the super ministry).
Bell, along with many other industry commentators, contends this lack of independent oversight allowed the Pike River disaster to happen, and is still missing to some extent in the notoriously gassy and faulted coalmines on the West Coast.
“Mines inspectors are people with experience and expertise, and companies need to know that they are there to help them, but also to make damn sure they are doing what they are meant to,” Bell said.
The industry has been working to remedy that, with various bodies - including Solid Energy - pushing for the adoption of the Queensland co-regulation model, where companies and government both maintain sector oversight.
A bone of contention though is check inspectors - senior staff appointed at each mine to monitor safety, who also have the power to shut down work if necessary.
On one side are the EPMU and the Mineral Industry Association, which favours check inspectors, saying they complement the high hazards unit. Solid Energy opposes it on the grounds it's a throwback and in modern mining each employee should be responsible for health and safety.
Bell instead feels the Government needs to pick up this role. “With smaller operators, you do have to be aware of potential shortcuts and therefore that's the reason we need the mines inspectorate beefed back up.”
“We are a way off [from matching Queensland],” he said. “We will catch up fairly fast as a result of Pike but it was a very high price to have to pay.”
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