Bathurst Resources and food processor Talley's Group are the leading bidders for Solid Energy's biggest mines, including Stockton, Energy News reports.

The two companies last month formed Phoenix Coal, which is 65 per cent owned by Bathurst and 35 per cent by Talley's Energy Ltd, which is owned by the Talley's Group. Talley's uses coal-fired energy.

The directors of Phoenix are Bathurst chief executive Richard Tacon and Bathurst group financial controller Jason Hungerford, along with Talley's Group directors Andrew and Milan Talley.

Energy News said it understood Phoenix was the front-runner to acquire the Stockton export operation.


Phoenix was also the preferred bidder for Solid Energy's Waikato thermal coal mines at Rotowaro and the recently restarted Maramarua coal mine, Energy News reported.

The Waikato mines supply North Island customers including New Zealand Steel, Genesis Energy and Fonterra and compete with imported coal.

Bidding closed on September 23. The Crown sales process of Solid Energy's assets has yet to be completed.

Solid Energy chief executive Dan Clifford yesterday emailed workers an article from Inside Resources, which also named Phoenix Coal as a leading bidder.

In his accompanying email, Mr Clifford said the article was "merely speculation". He said Solid Energy was "still in multiple discussions/negotiations and it would be inappropriate to make any further comment until these are concluded and we are certain of the outcome, at which time we will make an announcement".

Notable omission

The Inside Resources' article said a notable omission from the successful bidders at this stage was Brent Francis' company, New Zealand Coal and Carbon. Its operations include the Roa and Echo high-value export coal operations on the West Coast.

Inside Resources said negotiations were still underway with privately held interests on the West Coast for Solid Energy's other West Coast assets, including Reddale/Burkes Creek/Peerless, Spring Creek and Strongman mines. The latter two are in care and maintenance.

The Westport News sought comment today from Solid Energy, Bathurst and Talley's. Only Andrew Talley responded, saying he couldn't comment.

Buller Mayor Garry Howard said his council was none the wiser about leading bidders. "We just need to wait for the outcome - the announcement. Everything else at this point is just speculation."

The Westport News understands an announcement is expected by this weekend.

Solid Energy chairman Andy Coupe released a statement three weeks ago saying the company expected to reveal the successful bidder or bidders from late this month.

Mr Coupe said there had been an "encouraging level of interest" in Solid Energy's assets.

Bathurst's interest in Solid Energy was revealed earlier this year when it raised money for a due diligence study into the potential acquisition of a major New Zealand coal producer.

Mr Tacon told The Westport News in August that Stockton's aerial coal transport system and coal processing plant would be a "good fit" with Bathurst's Escarpment Mine at nearby Denniston. He said the two companies had had discussions long before Solid Energy went on the market, about sharing infrastructure and the potential to work together.

The distance from the middle of Escarpment to Stockton's coal processing plant is just 17km.

Biggest coal producer

If Phoenix buys Stockton and the Waikato mines, Bathurst would become New Zealand's biggest coal producer. Bathurst's Canterbury Coal and Takitimu Mine produce thermal coal for the domestic market. Sales from both mines have kept Bathurst afloat since April, when it mothballed Escarpment.

Since then the price for hard coking coal has more than trebled, from US$80/tonne to US$250/tonne.

In his statement earlier this month Mr Coupe said the coal price recovery had helped the sales process, but coal prices remained highly volatile and market fundamentals hadn't changed.

In a subsequent interview with The Westport News he declined to reveal the number of bids and lashed out at critics of Solid Energy's board. "The West Coast, frankly, should be applauding the board and frankly, the senior management, for what we've achieved and I'm never hearing a word about that.

"All we're getting is negative, negative, negative," he said.

Debt-laden Solid Energy has been operating under a deed of company arrangement since September last year. All its land, mines and other assets have been offered for sale.

Stockton Mine has shed about 1000 staff and contractors since coal prices collapsed in 2013.

Both Energy News and Inside Resources reported that while the sales process was still underway, Dunedin-based brothers Craig and Tony Hunter had emerged as a substantial new entrant in the New Zealand coal scene.

They had picked up the New Vale and Ohai coal mines in Southland and had interests in a range of quarries, lime and mineral operations in the South Island.

- The Westport News