Pike River shares have steadily risen 48%, from $1.67 on May 30 to trade around $2.47.
However, yesterday they fell more than 10% to about $2.25 after spiralling international coal prices dropped about 11% to less than $US200 overnight.
Early in June, Pike River secured a $US300 ($NZ382) per tonne contract with its Indian shareholder partners and Japanese steel mills for its inaugural production, a rate more than triple the international $US98 benchmark coal price a year ago.
Earlier this week, Pike River said it will resume tunnelling in the Paparoa Ranges after a two-week delay, but there will be no overall interruption to its forecast delivery and export of specialised coking coal next year, chief executive Gordon Ward said in a statement.
Tunnelling towards the Brunner coal seam in the Paparoa Ranges, near Reefton on the West Coast, was rescheduled to meet safety and construction requirements - delaying completion of the final 215m of the total 2.3km tunnel by two weeks.
"Some of the delay to the first coal is caused by reshuffling the timing of certain pit bottom works, and there is no impact on the expected coal production of 200,000 tonnes to the period ending June 30 2009," Mr Ward said in a statement yesterday.
Tunnelling is scheduled to resume on July 10 for the final drive of 215m to the Brunner coal seam, which includes going through the 50m-thick gneiss (hard rock) Hawera fault, having started more than 21 months ago.
The high quality coking coal is a key ingredient in producing steel.
Pike River forecasts of full production rates are predicting exports of 1.3 million tonnes per year during the next 18 years.
While Pike River is contracted to deliver its first coal at $US300 per tonne, its management is confident subsequent forward contracts covering from March 2009-10 will be in a similar range of $US270-$US300 being picked by analysts.
Indian equity shareholders Gujarat NRE Coke Ltd and Saurashtra Fuels Private Ltd have contracted to purchase about 55% of production during the next 18-plus years, while the Japanese steel mill contracts cover the remaining 45% production and run for a minimum three years.
Overseas, US traders said stocks in coal mining companies had experienced what they said was a long-awaited correction.
Analysts said the benchmark European price dropped from around $US225 ($NZ300) per tonne to below $US200, which in turn dragged down US prices by as much as $US20.
London's API2 coal swaps plunged by as much as $US24, a fall unprecedented in the past five years of OTC swaps trading.
The market experienced a violent correction with swaps falling sharply minute by minute, traders said.
The correction was long overdue, traders said, because prices had risen sharply and steadily for the past few weeks.
Prices stabilised around $US2 below physical levels at the close of trading in London.
The Dow Jones coal index was down 13.83% in New York overnight on Wednesday.
"We have been waiting for a correction for months," Calyon Securities coal industry analyst Gordon Howald said, adding that some United States coal company stocks had risen between 40% and 60% since May 1 this year.
"It's a correction and not a big deal," he said.
"Nothing has changed in the global coal picture."Mr Howald said that what prompted the correction wasthe refusal by some Asian utilities to pay $US220 per tonnefor steam coal, which wasselling for $US170 last week.
"So it corrected down to $US200."Jeremy Sussman, a coal industry analyst with Natixis Bleichroeder, said US coal producers have been signing contracts "at very good numbers, well into the triple digits, but the stocks don't reflect that.
We are telling people now is a good time to buy."Sentiment was mixed, but some players were using the decline in the sector as an opportunity to enter bullish option trades after a long-awaited pullback.
Miners were the top losers in London, with BHP Billiton , Rio Tinto and Anglo American all falling about 4.4%.
