Beleaguered West Coast coal miner Bathurst Resources has gained regulatory approval to buy 85ha of Southland forestry land next to its Coaldale mine at Nightcaps.
The Overseas Investment Office (OIO) yesterday granted approval for Bathurst's freehold purchase of the 85ha at Nightcaps from Southland Plantation Forest Company of New Zealand Ltd, whose majority owner is Oji Holdings Corporation of Japan.
The OIO did not disclose the purchase price.
In a convertible notes issue in April, Bathurst raised $A4.25million ($NZ4.45million) for working capital.
For its last quarter of production, to March, Bathurst reported a "cash positive quarter'', having mined 105,287 tonnes of coal "with restricted deposits'' at $6.2million, up on the previous quarter's $5.6million.
The company said at the time 400,000 tonnes of annual production would "provide a sound revenue stream to underpin the company's operations''.
Its shares were trading at 1.3c yesterday.
Analysts had been speculating Bathurst might have been looking at some permitted areas of Solid Energy, which included specialist hard coking coal areas.
Bathurst has spent more than $400million since 2010 on gaining permits and consents and on some development costs for a new West Coast mine near Westport, initially targeting 4million tonnes in annual production.
However, after fighting environmentalists' challenges through the courts to have two councils' consents upheld, by the time those battles were won in October 2013 the price of export coking coal had tanked worldwide and Bathurst could not mine the export coal commercially.
Bathurst has since then relied on two small thermal coal mines, Takitimu in Southland and another west of Christchurch, supplying a now closed West Coast cement factory and the dairy industry.
The OIO said the Southland land was part of a wider, semi-mature forestry block.
The purchase would allow Bathurst to continue mining a coal seam stretching from the Coaldale mine into the forestry block, which has been named the Black Diamond mine.
Bathurst's adjacent Coaldale mine was "close to being economically exhausted'', the OIO said yesterday.
The OIO said Bathurst employed about 110 people in New Zealand and development of the Black Diamond mine would mean the creation and retention of "a significant number'' of jobs and indirect jobs.
In March, Bathurst suspended operations at its contentious Escarpment mine atop the Denniston plateau, above Westport, and had to rely on the southern domestic mines to maintain cash flow.
Deep cuts have been made to staff, management and the board and Bathurst has moved its stock exchange listing solely to the ASX in order to conserve cash.
