The first day of the Royal Commission hearings revealed that construction costs of the underground West Coast coal mine soared from $NZ29.3 million ($A22.81million) in 1997 to $207 million in 2007.
State-owned Solid Energy operates the nearby Spring Creek underground coal mine, which also used hydro-mining equipment to extract coal at the face and continuous miners for development coal.
Solid CEO Don Elder told the commission that backers of the Pike River mine were overly optimistic about its potential back when it was in early planning stages.
“We believed the commercial risk associated with the Pike River development was very high," he said.
Elder believes the years of production delays and the challenging geological conditions were two key factors behind the growing safety risks at the mine, along with the hydro-mining method which required “highly specialist” training.
Hydro-mining, which uses high-pressure water to cut coal, is not used in Australia and commissioning of this equipment only started up about two months before the first underground explosion rocked the mine on November 19, claiming 29 lives.
Counsel for the Commission James Wilding summarised possible issues which could have played a role in the disaster.
Aside from the potential for financial difficulties to compromise safety standards, he also revealed that workers had raised questions over the gas monitoring in place at the mine.
However, Pike River chief executive Peter Whittall told ILN last year that the gas-monitoring systems were of the same standard as those used in mines in New South Wales and Queensland.
Whittall is scheduled to appear for hearings in Greymouth District Court on Monday, July 18.
Two former chief inspectors of coal mines will be at hearings this week.
The Department of Labour is running its own inquiry into the mining disaster but will also have two representatives speaking at the Royal Commission hearings this week.
