Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Bathurst hunkers down as coking coal price keeps sinking

Bathurst hunkers down as coking coal price keeps sinking

By Pattrick Smellie

Feb. 25 (BusinessDesk) – Coal miner Bathurst Resources is making 29 staff redundant as it hunkers down to ride out the lowest world prices for coking coal in the last nine years, and signals a delayed start to its controversial Escarpment open-cut mine on the Denniston Plateau, above Westport.

Bathurst overcame a string of appeals to gain resource consents for Escarpment last October, more than two years after winning initial consents, but watched global prices for coking coal, used in steel-making, fall over that time from a high of more than US$300 a tonne in 2012 to around US$120 a tonne at present.

The company has said its operating costs at Escarpment would come in at around US$120 a tonne, reducing to US$90 per tonne as production ramps up. An economic “caucusing” document agreed during Environment Court hearings between economists engaged by Bathurst and scheme opponents last year, states the breakeven cost for the project is US$165 a tonne and suggests “a minimum expected price for the project to proceed is perhaps US$190.”

In a statement to the NZX and ASX today, chief executive Hamish Bohannan says: “Bathurst is committed to commencing establishment of the Escarpment mine as soon as authority is granted but will defer ramping up production until such time as the market is deemed to be recovering.

“For the next period, focus will be on securing the site, establishing facilities, including water management dams and stockpile areas, and mining sufficient coal to complete market qualification for coking coal supply to steel producers, principally in Japan and India.

“Sadly, this means that about 29 jobs will become redundant, but it will ensure that the company preserves cash to continue its operating and development activity,” he said.

Bathurst shares hit a high for the last 12 months of 28 cents a share last November, shortly after consents were granted, but its share price has ebbed since to close yesterday at 16 cents. There was no early NZX trading in Bathurst, the majority of whose shareholders are in Australia.

The company is also cutting directors’ and executive managers’ fees by 30 percent and reducing the size of its board by not replacing chairman Craig Munro, who recently retired, having appointed former electricity industry senior executive Dave Frow to take the chair.

“The key to these actions is to stabilise the company, move it into a cash positive situation, secure the Escarpment mine and develop it to the point where we can move quickly into commercial production once the market improves,” said Bohannan.

Its existing three coal mines will continue to service local dairy and cement industries. Escarpment and other mines planned on the Buller uplands above Westport are exclusively focused on export markets.

Meanwhile, Prime Minister John Key yesterday acknowledged that the financially stressed state-owned coal miner, Solid Energy, was also finding current conditions “very challenging.”

“We think it can survive, but its asset value is very low,” he said in answers to questions about the potential for Solid Energy to be placed back on the list for partial privatisation.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news