Bathurst Resources' Takitimu Mine near the town of Nightcaps in Southland. Photo / Supplied
Richard Tacon isn't known for taking the easy route. He started out "pushing skips" in the long defunct Liverpool State Mine near Greymouth when he was just 17. Now 61, he's spent more than 40 years mining coal, two decades of them "underground".
These days he heads ASX-traded, Wellington-headquartered Bathurst Resources, New Zealand's largest coal company and a frequent target for climate change protesters and a lightning rod for criticism that the country's energy transition away from fossil fuels isn't happening fast enough.
The push to abandon coal before renewable alternatives are in place to meet demand concerns Tacon, especially since it risks moving current, energy-intensive manufacturing and growing offshore.
As does the frequent public failure to distinguish between metallurgical coal, for which there is no alternative in high heat processes like steel making, and thermal coal used to generate electricity.
But in recent years the greatest existential threat to his company hasn't been protesters or climate change policy, but rather an old fashioned lawsuit.
In early July, the Supreme Court upheld Bathurst's appeal that it is not liable for a US$40 million ($57.4m) performance payment, a claim that was brought against it by L&M Coal Holdings, from which Bathurst bought exploration assets in 2010.
The company's share price roughly doubled on the news, and though it has since settled, it is still up more than 50 per cent.
"We've spent five years looking backwards," Tacon says, "and we've spent $5m fighting this thing [the court also ruled that Bathurst is entitled to costs]. Up to now we've looked at other projects, but you know we really haven't been able to do any more than that. Every time we talked to an investor, all they wanted to talk about was the court case; I would too, you can't blame them."
The suit now settled, Bathurst is looking at other project opportunities in metallurgical coal - the search is restricted to Australia, New Zealand and Canada - and even other commodities, though Tacon says the company is still in the process of gauging shareholder appetite for the latter.
"We'd potentially look at copper and manganese [used in lightweight steel making and some batteries]. We're canvassing our shareholders to get their thoughts but we've got to be really careful, we're a pure play coal company, and you know everyone says 'coal is dead' but we've still got a large body of people out there who want to invest in coal."
Major investors include Singapore-based Republic Investment Management and New Zealand, family-controlled Talley's Group. Bathurst also owns three of its mines in joint venture with Talley's Energy: Stockton, Rotowaro and Maramarua.
However, among major institutions there's an undoubted push toward so-called environmental, social and corporate governance (ESG) criteria that flags thermal coal as an environmental concern, Tacon acknowledges.
Just last year ANZ put Bathurst on notice that the miner would need to find a new banker. That, however, has not eventuated.
Bathurst aims for a mix of 75 per cent metallurgical coal production (it exports about a million tonnes a year), and Tacon says that broadly satisfies the guidelines now set by many banks and insurers.
Tacon's customers for thermal coal, all domestic, are the likes of hothouses growing food and flowers, the meat industry's freezing works, and food processors like Fonterra, which uses boilers to turn milk into dried powder.
Another is NZ government-controlled electricity generator, Genesis Energy, which operates the Huntly power station.
Fonterra recently warned that the high price and uncertain supply of natural gas, which it uses to fire its North Island plants, may force it to transition away from gas first, thereby delaying the switch away from coal.
Similarly short of gas, Huntly is currently meeting high demand by burning coal, some of it supplied by Bathurst, but much of it imported from Indonesia.
Thermal coal is a good business at the moment - the benchmark Australian price is now more than US$150 a tonne, the highest it's been in over a decade - but Tacon is cautious about any expansion.
"We'll aim to stay within that three-quarters of production from steel making coal and we won't look for any new thermal coal unless it's backed by a major customer ... it has to be backed by a contract.
Bathurst has tentative thermal expansion plans at New Brighton, Southland, aimed at extending production from the adjacent Takitimu mine beyond 2027. But they remain uncertain.
Extinction Rebellion appears to be planning to protest, Forest & Bird has taken court action to thwart the expansion, and Tacon says he doesn't yet know whether the plan is economic: "by the time we overlay the full blown environmental court consenting process which costs about $2.5m it may not be worth it."
Tacon won't name the prospective customers, but Fonterra's Clandeboye factory, linked by rail, is likely its lynchpin.
Growth prospects for metallurgical coal in New Zealand also look complicated.
Tacon would like to add production adjacent to the Stockton Mine on the West Coast, which exports primarily to Asian steelmakers (NZ Steel is also a customer, though it uses North Island coal).
Prices for metallurgical coal have been volatile, particularly since the outbreak of Covid-19, but the Australian price for premium 'met coal' has recently rallied toward US$200 a tonne.
But there again, his plans are in doubt. A snarl of new and promised Government policies - including additional protection for wetlands, planned new biodiversity provisions and the Government's pledge to block new mines on the Department of Conservation's extensive landholdings - presents significant hurdles.
All that means that Bathurst's major new investment aims centre on Canada.
Since 2019, Bathurst has invested $14m for a 22 per cent stake in a planned metallurgical coal mine called Crown Mountain, tucked in a major coal mining area of British Columbia.
Another $110m investment, based on full regulatory approval in 2024 or 2025, Tacon says, will bring the company to a 50 per cent stake in the project.
In the meantime it must pass both provincial and federal environmental and regulatory review.
"Yes, there's political risk," Tacon accepts.
In June, Canadian Prime Minister, Justin Trudeau, all but banned new and expanded thermal coal mines.
And just across the provincial border from Crown Mountain a planned new metallurgical mine, Grassy Mountain, was rejected recently by the Alberta regulator.
Tacon is unfazed: Bathurst is a "counter-cyclical investor, it comes with the territory."
Lake levels are close to average, easing fears of a power shortage.