Demand for Bathurst's coal 'strong'

Domestic coal from Bathurst Resources' three domestic mines - Cascade (pictured), Takitimu and...
Domestic coal from Bathurst Resources' three domestic mines - Cascade (pictured), Takitimu and Canterbury Coal - are keeping the company cashflow-positive. Photo by ODT.
Domestic coal sales of more than 80,000 tonnes have kept Bathurst Resources cashflow-positive for its past quarter trading, and hopeful of being in a similar full-year position.

Plunging global coal prices forced Bathurst to postpone mining the Denniston plateau, above Westport, for specialist hard coking coal, and it is now relying on three domestic South Island mines for cashflow.

Domestic dairy and cement industry demand remained ''strong'', and was providing Bathurst with ''a stable revenue stream'', which was not affected by foreign exchange issues and global pricing trends, Bathurst said in a market statement.

Bathurst shares were unchanged at 6c yesterday.

Global coking coal prices had plunged from $US320 ($NZ376) per tonne in 2011 to about $US110 and Bathurst said Denniston extraction could begin at about $US120; while analysts have predicted depressed prices could continue through to 2016.

Following a successful capital raising during the quarter to June, Bathurst ended the period with $8.87 million cash in hand.

Revenue for the quarter was $12.8 million, after expenses, leaving $710,000 in operating cashflow.

''The company has completed the year with a cashflow-positive quarter, having achieved good production results from its operating mine,'' the company said.

However, Bathurst cautioned the quarter to September would see a downturn because of seasonal dairy demand declining, but the quarter to December and full year was expected to show a ''return to cash-positive position''.

Total coal mined during the quarter to June was 101,885 tonnes, with 80,904 tonnes sold.

The Cascade mine, adjacent to the Denniston plateau and targeting 150,000 tonnes annually, produced 40,908 tonnes for the quarter, Takitimu in Southland 52,367 tonnes and Canterbury Coal, west of Christchurch, 8610 tonnes.

Discussions with potential customers in India, Japan, Korea and China were continuing.

''While interest remains strong, the company will wait for the coal price to recover before committing to long-term contracts,'' Bathurst said.

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