Development Trust invests in Roa Mine

Media Release 14 May 2004

Development Trust invests in Roa Mine

The West Coast Development Trust has approved its largest ever business loan. Roa Mining Company Ltd will receive $4.6 million to complete development of the main coal seam at Roa, near Blackball on the West Coast.

Roa Mining is a 50/50 Joint Venture, owned by Francis Mining and a Swiss trading Company. They are NZ’s only private coal exporter. Francis Mining has operated on the West Coast since 1982, initially at Reefton.

The Roa coal seam has been worked since 1906. Now underground, it yields some of the highest value coal currently extracted in New Zealand - premium, bituminous, coking coal which has high market appeal due to its unique properties of low sulphur, low volatility and low ash. These are required for specialist applications such as activated carbon products (for example, used in water filters) and in steel production. International demand is so strong there is a world-wide shortage.

Roa Mining anticipates it will be producing 250,000 tonnes a year at peak production. This constitutes approximately 10% of global demand in this premium market segment.

“We have thoroughly researched the engineering, operational and commercial aspects of this application, including taking independent expert advice,” says Chief Executive of The West Coast Development Trust, Michael Trousselot.

“We are confident that, this will be one of The Development Trust’s best regional investments. Roa Mining put forward a robust business plan which has been thoroughly evaluated by experts with significant coal industry and engineering experience. Our Advisory Body was impressed that Roa provided us with conservative and realistic projections and that the joint venture partners have significant international coal industry experience.”

Mr Trousselot says the project has gained Development Trust funding because it has significant potential to bring economic benefit to the region. Twenty-four people are currently employed at the Roa Mine and another nine jobs will be created when it reaches full production.

“There’ll also be a positive flow on effect to other businesses within the West Coast - an example of this is Roa Mining has decided to barge a proportion of coal direct from Greymouth to Australia for transhipping, which is already generating new business for our local transport and port companies.”

The loan to Roa Mining is for a maximum five year term with an option for The Development Trust to convert a portion of the debt into equity. The Development Trust also retains the right to appoint two directors.

ENDS

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