Bathurst Resources secures coal train link to Lyttelton

File photo

West Coast coking coal mine developer Bathurst Resources will send up to 25 per cent of its production through the Lyttelton Port, under a wide-ranging collaborative agreement announced today with state-owned coal miner Solid Energy.

The agreement also sees Bathurst and Solid Energy agreeing to share water, infrastructure, coal-handling and transport facilities to bring coal down from the Denniston Plateau, where both companies will be operating once Bathurst starts production, to the coastal plain near Westport.

Some 75 per cent of Bathurst's coal will still be shipped from Westport for export from New Plymouth, the company confirmed, but today's announcement means the company has flexible coal export options.

In effect, the agreement uses capacity on the South Island trans-alpine rail link that had been contracted to Pike River Coal Ltd.
Pike River closed last year after mine explosions killed 29 underground
workers.

First coal is expected from Bathurst's Escarpment open cast mine, inland from Westport, by the end of this year.

The rail agreement is for up to 500,000 metric tonnes annually, building from 200,000 tonnes a year, compared with a contract for one million tonnes a year secured by Pike.

Most of the West Coast coal seams being developed by Bathurst were at one time owned by Solid Energy, which sold out in the early 2000's before the recent boom in global prices for high grade coking coal, which is used in steel-making and is in high demand in booming Asian economies.

The agreement also provides for collaborative mine planning and designs on the plateau where the two companies have common boundaries, jointly planned access to water, space where available for Solid to use Bathurst's slurry system for bringing coal off the plateau, and rights for Bathurst to put some facilities inside areas covered by Solid Energy's coal mining licences.

Solid's access to Bathurst infrastructure will be "on appropriate commercial terms," Bathurst said.

"The agreement demonstrates both companies commitment to ensuring that mining on the Plateau is carried out in a sustainable manner with as minimal environmental impact as possible," said Bathurst chief executive Hamish Bohannan.

Bathurst is in the middle of resource consent hearings for the Escarpment and other developments, and faced criticism from environmental groups at hearings this week.

"Working on these very valuable resources in collaboration will mean a better outcome for the communityand national economy," said Solid Energy's chief operating office Barry Bragg.

The 10 year rail agreement is not tied to take-or-pay arrangements, Bathurst said.

The dual-listed Perth-based company, has been a stand-out performer on the NZX since listing late last year, but has fallen heavily this month from $1.65 on June 1 to a closing price of $1.29 yesterday.