Bathurst to cut 29 jobs

By Ben Aulakh, Kim Fulton of the Westport News

Photo / File
Photo / File

Bathurst Resources will cut about 29 jobs in Westport and Wellington as it awaits final approval for its Denniston Escarpment Mine.

Managing director Hamish Bohannan said Bathurst was carrying out a proposal to cut costs and preserve value in its Buller project as it awaited final documentation approval for its Escarpment Mine.

"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.''

The job cuts would affect support staff that had been involved in the consenting process in Westport. Bathurst had intended to keep some of those staff on as the project started.

The cuts would also affect staff in Wellington and one position on the Bathurst board.

Mr Bohannan didn't yet know the exact number of staff that would be cut at each location.

The job cuts wouldn't affect operators at any of its sites.

Bathurst still planned to start work at the Escarpment Mine as soon as operating plans were approved but would defer ramping up production until the market was deemed to be recovering.

Its focus would be on securing the site and 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.

"With the coal prices where they are today it just doesn't make sense to go straight to half a million tonnes a year. So we will just get up on site, get established and start production at a more modest rate.

"We'll just see where the price is when we've finished all the work that's got to be done,'' said Mr Bohannan.

Bathurst planned on employing new staff when its plans were approved and might re-employ some staff who had been cut.

The key to Bathurst's actions was to stabilise the company, move it into a cash positive situation, secure the Escarpment Mine and develop it to the point where Bathurst could move quickly into commercial production once the market improved.

The company had announced a proposal to its staff to focus on its existing three operating mines, which largely serviced the local dairy and cement industries.

It would also focus on establishing its new Escarpment Mine once its operating plans have been approved, and the Authority to Enter and Operate issued by the regulatory authorities.

Resource consents for the Escarpment Mine were issued on October 24, 2013, following which councils, iwi and the Department of Conservation commenced their review of the Bathurst operating plans for Escarpment.

This process, whilst expected to be completed shortly, was still ongoing.

Until the process was completed and the Authority to Enter and Operate was issued, Bathurst was not permitted to undertake activities on the lease.

The international price for coking coal had dropped from its 2012 high of over US$300 per tonne to a current spot of about US$120 per tonne, its weakest position in about nine years.

Bathurst had consistently stated it expected operating costs at Escarpment to range from about US$120/tonne on start-up, reducing to less than US$90 per tonne as production ramped up to about one million tonnes per annum.

Buller Mayor Garry Howard said he was dismayed at Bathurst's announcement.

"Today's news that Bathurst will not be proceeding to open its Escarpment Mine on the Denniston Plateau as planned, is devastating for the company and the Buller community.

"Bathurst staff have been passionate people who have become involved in our community and we feel for them as they face this bad news.''

However, Mr Howard said he understood the position the company had found itself in, and accepted that the long-term future was better served by the delay. It was still a bitter pill to swallow, he said.

Mr Howard also took a swipe at environmental groups such as Forest & Bird, which had previously launched a series of high-profile court appeals against the proposed Escarpment Mine.

The group launched appeals to the Environment Court, the High Court and the Supreme Court to prevent the mine from going ahead.

"It is simply criminal to see a well-intentioned regulatory process abused and manipulated by out-of-town extreme elements intent on frustrating legitimate and reasonable developments,'' said Mr Howard.

"Concession after concession has been made but these appeasements never seemed to be enough. The delays continue and the legal costs have burned cash that should have been invested in infrastructure.''

Today the district had been left with the consequences of those appeals, which was job losses, he said.

Mr Howard said the local community was running out of patience with the "misrepresentation and false propaganda used by people who had no stake in the local community''.

"What has happened to Bathurst must not be allowed to continue. Mining is one of this country's biggest export earners and it is the single biggest contributor to the Buller economy.''

He said the Buller District Council would continue its efforts to ensure the final approvals for Escarpment were brought into being as soon as possible.

However, the local community held deep fears about the message the Bathurst "debacle'' had sent to investors in the New Zealand economy.

"We want to send a serious message to the Government. The existing process is not fit for purpose.''

There needed to be areas in New Zealand identified and designated to allow mining as a permitted activity, provided the appropriate environmental safeguards were in place. ``If that requires new legislation so be it,'' said Mr Howard.

- APNZ

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