Friday 6th May 2011
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Bathurst Resources Ltd has signed up China's Citic to help fund and take 30% of the coal from its Buller Coal Project on the West Coast of the South Island of New Zealand.
Bathurst has signed a five year agreement applying from the start of first coal production from the project with Citic Resources Australia Pty, a subsidiary of Citic Group in China.
Citic will act as principal for sales of 30% of annual production and it may act as an agent for Bathurst in some markets.
The Chinese company will also provide up to US$40 million (NZ$51 million) in a finance facility repayable within five years, which will fund construction and development of the project and provide working capital for Bathurst.
Citic is one of China's largest state owned companies and it has previously invested in the New Zealand forestry industry.
The term sheet signed with Citic is currently non-binding, with both parties agreeing to work towards formal offtake and funding agreements prior to the start of the development phase of the mine.
Bathurst has said it could begin work on the open cast coal mine in the Buller district by September or October if resource consents are approved and land access arrangements are finalised. This includes a concession from the Department of Conservation.
Buller Coal Ltd, a wholly owned subsidiary, has 16 resource consent applications with the West Coast Regional Council and eight with the Buller District Council for the proposed Escarpment Mine Project.
Three independent commissioners will conduct a hearing in Westport beginning on June 7 to consider the applications for consents under the Resource Management Act.
The hearing is expected to take up to three weeks. A decision is expected about three weeks after the hearing closes.
The mine in a 200ha permit area in the southern part of the Denniston Plateau is expected to produce about one million tonnes of premium hard coking coal per year.
The councils publicly notified the applications with submissions closing on October 22, 2010.
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