Bathurst continues investment in South Island

As Solid Energy's 1200 staff await the latest restructuring details and whether the company needs a Government bail-out to survive, listed Australian coal mine developer Bathurst Resources is forging ahead with further South Island acquisitions.

Bathurst is to pay L&M Coal Holdings Ltd $16.8 million for a 658ha tenement at Takitimu in Southland, adjacent to its other Takitimu mine, for production of domestic thermal coal.

Last July, Bathurst bought the Takitimu operations of Eastern Coal Ltd for $A14 million ($NZ17.2 million), which at the time was producing about 175,000 tonnes of coal a year.

Although the coal industry is still reeling from last week's disclosure of Solid Energy's uncertain financial position, Bathurst's operations remain mired in litigation, with only small-mine coal production under way.

Bathurst, which wants to begin mining up to 4 million tonnes of specialist hard coking coal from around the Denniston Plateau near Westport, is awaiting the outcome of Environment Court challenges to its resource consents.

Environmentalists are concerned the strip-mining plans will devastate a unique biodiversity area and wipe out rare flora and fauna in and around the plateau above Westport.

After having spent more than $120 million and being almost a year behind schedule, Bathurst's share price has borne the brunt of frustration, declining from $1.10 almost a year ago to trade about 40c recently.

Last year, Bathurst had about $150 million in cash and banking facilities available, plus income of more than $30 million from boutique mine coal sales out of Southland and a small mine adjacent to the Denniston Plateau. In July 2011, Bathurst paid $US12 million ($NZ14.4 million) to expand its Denniston Plateau holdings, by a further 341ha, to Brookdale Mining Ltd.