Bathurst Resources’ Cascade mine operation on the Denniston
plateau at an early stage of development. PHOTO: ODT FILES
The imminent withdrawal of cement maker Holcim from
Westport Coast has prompted Bathurst Resources to suspend
operations at its contentious Escarpment mine atop the
Suspension of Escarpment and its 35,000-tonne annual
production is a blow for Bathurst, which is left to rely on
cashflow from only two small domestic South Island thermal
coal mine operations.
While Bathurst obtained consents to mine Denniston from two
local councils in 2011, environmental groups, including
Forest & Bird fought those consents through several
courts, over two years.
By the time the Environment Court upheld the consents in
October 2013, the global coal price had fallen through the
floor and made mining the specialist hard coking coal
unaffordable for export.
Export coal had hit highs of $US380 ($NZ563) in 2008 and
$US330 in 2012, but during 2014-15 it was in the low $US90s.
Recently, it has been trading near $US80, while Bathurst
needs a price above $US100.
From about 2010 to 2014 Bathurst had spent about $300million
preparing to mine around the Denniston plateau and fighting
the legal objections to its consents, but in February 2014
the price slump prompted suspension of most plateau
Bathurst shares hit a record high of $1.74 in April 2011, but
almost five years on, they were yesterday trading at just
A1.7c; having withdrawn to a sole listing on the ASX to save
Bathurst chairman Toko Kapea said on Friday the main market
for the 35,000 tonnes of Escarpment coal was Holcim, near
Westport, which plans to close in June.
Following an operational review of Escarpment, Mr Kapea said
it was ‘‘envisioned that the mine would be placed in
suspension at the beginning of May''.
‘‘The costs inherent in operating on the plateau and the
overhead required to support even small scale mining is
onerous,'' he said in a statement.
The mine was once envisioned as employing 400 people and
building towards taking up to 4million tonnes of coal
Bathurst's board numbers had been gutted during the past 18
months, and fewer than 100 remaining staff may be cut by
Forest & Bird campaigns and advocacy manager Kevin
Hackwell called for Bathurst to surrender its access rights
and resource consents covering the Denniston plateau, which
he has always maintained was ‘‘high value conservation
Forest & Bird had fought for many years to protect
Denniston, which was a unique landscape and ecosystem, formed
under unusual conditions over tens of millions of years, he
said.‘‘Coal is a dirty form of energy whose time has passed.
‘‘We now need to give the whole of the Buller Coal Plateau
the protection it deserves by adding it to [highly protected
status] Schedule 4,'' Mr Hackwell said.
Mr Kapea said in his statement Bathurst planned to maintain
the resource value and also the existing consents, which
allowed access to the coal resource.
‘‘The intent of the company is to continue to compete for
other markets for this high quality coal.
‘‘The resource is still available to mine and there is a
scale where it is profitable,'' Mr Kapea said.
On the question of Bathurst's financial position, Mr Kapea
said said the remaining Bathurst business was ‘‘strong, with
‘‘This hiatus in operations strengthens that position in
these difficult market conditions,'' he said.
Bathurst's Takitimu mine, in Southland, and Canterbury Coal,
near Christchurch, have contracts to supply dairy plants.
With coal price still in the doldrums, for Bathurst's year to
June 2014, it posted a loss of more than $189million, having
written down the value of its Buller Coal Project by
Bathurst achieved a minor half-year to December 2015
turnaround, replacing the previous year's after-tax loss of
$7.1million with a $142,000 profit. For the period, its three
mines produced about 400,000 tonnes of coal.
Bathurst's operating cash flow for the period $3.2million,
compared a $2.2million outflow the previous year, while bank
debt was down to $2million.
Mr Kapea said site works up until May would centre on forming
stable slopes and water control structures, so the mine met
all its resource consent decisions, in a safe and cost
Mr Hackwell hoped Bathurst's decision to close the mine would
discourage the Department of Conservation from approving any
other coal mining on high value conservation lands.‘‘The cost
to nature is too high,'' he said. - Additional reporting: