Bathurst Resources, the Australian company developing a large open cut coal mine in the Buller region of New Zealand's South Island, has signed up a steel trader, which is also providing finance.Bathurst, which is now dual-listed on the NZX, said it has a
Bathurst Resources, the Australian company developing a large open cut coal mine in the Buller region of New Zealand's South Island, has signed up a steel trader, which is also providing finance.
Bathurst, which is now dual-listed on the NZX, said it has a memorandum of understanding with Stemcor Australia Pty, a subsidiary of Stemcor Holdings Ltd for the sale of coal from the Buller project.
Stemcor is the world's largest independent steel trader and it will act as principal for Bathurst in certain markets.
The five-year agreement is for 45 percent of the first one million tonnes of coal produced plus 30 percent of any additional production above a million tonnes per annum.
The mine, largely surrounding the Stockton mine north of Westport, does not yet have all the approvals needed but Bathurst is aiming to start producing coal late next year.
Stemcor will provide up to $US50 million ($NZ67 million) in a coal finance facility.
It has agreed to have a proportion of its agents' commission driven by premiums above benchmark that they can obtain on sales. The coal produced from Buller will be of premium quality and can be used by steel manufacturers.
"This partnership with Stemcor will offer Bathurst the best opportunity to maximise value for its product and to establish a track record for reliable, high quality coal production and sales on a global basis, without committing large quantities of the asset for lengthy periods of time," Bathurst said.
Bathurst listed on the ASX in 2007 with the intention of developing the Buller Coal Project it purchased from L&M Coal.
It has an exploration target of 60 million to 90 million tonnes of coal.
Bathurst said at its annual meeting last month that it was well advanced in gaining regulatory approvals from government.
