Buller coal mine developer Bathurst strikes funding, sales deal
Dec. 9 (BusinessDesk) - Dual Australia and New Zealand-listed Bathurst Resources, which is developing an open-cut coal mine in the Buller district of the South Island, said it has reached a finance, sales and marketing agreement with Stemcor, the world's largest independent steel trader.
The deal is subject to due diligence.
Stemcor, a private country controlled by the Oppenheimer family with turnover exceeding US$5.5 billion (NZ$7.2 billion) in 2009, will provide Bathurst with up to US$50 million and has a five-year sales agreement from when the mine starts producing coal, expected in late 2011.
Stemcor will have an exclusive agency agreement to take 45% of the mine's first million tonnes of production and 30% of any additional production above one million tonnes a year. It will also act as Bathurst's principal “in certain markets” which weren't specified.
The mine will produce the premium quality hard coking coal, similar to that produced by the ill-fated Pike River mine, which is used in producing steel.
Bathurst shares, which listed in New Zealand late last month, rose two cents to 86 cents on the NZX. In Australia, the shares are up 1.5 cents to 66.5 Australian cents, their highest level in a year, having trading as low as 6.5 Australian cents.