Bathurst Resources has found a new buyer for coal from its Canterbury mine, replacing the lost supply deal for Westport's cement works when Holcim closed the plant last year.
Wellington-based Bathurst will supply up to 65,000 tonnes of coal a year to an unnamed buyer for up to 10 yearsfrom its Canterbury mine west of Christchurch, the mining company said in a statement to the ASX. The deal has an escalation option, it said.
"This contract replaces the supply lost last year with the closure of the Westport cement works and enhances the company's South Island domestic supply strategy," chief executive Richard Tacon said.
Bathurst bought the Canterbury mine in 2013 and in its first-half report released in February, said it's developed the site's coal processing plant and infrastructure to meet "strong demand" from nearby markets. As at December 31, the mine was on track to produce 100,000 tonnes in the year ending June 30, up from 60,000 in the 2016 financial year. The company mined 166,191 tonnes of coal in the six months ended December 31 and sold 149,809 tonnes.
Holcim closed the doors on its Westport plant in June last year, ending 58 years of production in the town, and forced Bathurst to place its Cascade and Escarpment mines in care and maintenance.
Last year a Bathurst joint venture with Talley's Group bought Solid Energy's Stockton, Rotowaro and Maramarua Mines out of receivership for $46 million, which Bathurst later said gave it access to the North Island domestic thermal coal market and an export metallurgical coal market.
ASX-listed Bathurst shares rose 11 per cent to 8.2 Australian cents.
