Smith gives nod for open-cast coal mine on conservation land

Conservation Minister Nick Smith has approved access over conservation estate land for Bathurst Resources to develop an open-cast coal mine on the Denniston Plateau, above Westport, to the dismay of environmental opponents.

The timing for Mr Smith's move avoids Bathurst having to resubmit applications for access agreements under the revised Crown Minerals Act, which comes into force tomorrow and would have required public consultation.

The announcement lands in the middle of delicate negotiations between the company, environmental groups and other interested parties that could pave the way to a broader agreement on the Escarpment proposal, whose resource consents are still subject to court appeals.

Bathurst, whose shares were placed in a trading halt on the NZX and ASX overnight pending today's announcement, first applied for an access agreement from the Department of Conservation in 2008 and has faced the ire of its primarily Australian shareholder base over the protracted process in New Zealand for gaining a mining licence.

Resource consents for the Escarpment mine were granted in August 2011, but have been held up by appeals by the Royal Forest and Bird Protection Society of New Zealand and other environmental groups who oppose further mining on the ecologically fragile plateau, which has also hosted coal mines since the mid-19th century.

The outcome of those appeals has yet to be determined, although the Environment Court agreed in principle to Escarpment proceeding earlier this year, subject to Bathurst beefing up its environmental offsetting and restoration commitments.

"In giving this approval, I do not consider it is acceptable to open-cast mine all of the Denniston Plateau," Mr Smith says. "The plateau does have unique biodiversity and landscape values from its raised elevation, high rainfall and unusual land form.

"I wish to see some of the high-value areas reserved and put into permanent protection."

Today's decision does not appear to cover Bathurst's second proposed open-cast mine on the plateau, at Whareatea West, for which the company has not yet sought resource consents.

Forest & Bird's south field officer Debs Martin says she is "stunned" by the decision, which would be "effectively signing the death warrants of native animals".

However, Mr Smith says the 106ha covered by the Escarpment proposal was not of significant conservation value on the 2026ha plateau.

"This area is not national park, nor conservation park. Nor does it have any particular reserve status. It is general stewardship land, which is the lowest legal status of protection of land managed by the Department of Conservation.

"The area does have conservation values although there has been some disturbance from previous mining including roads, bulldozer tracks and an artificial reservoir. The area also has some infestation from weeds like gorse and broom," Mr Smith says.

Bathurst is targeting high-grade coking coal, used in steel-making rather than being burnt. Buller coking coal is highly sought after by global steel-makers because of its low sulphur and ash content.

Bathurst had also committed to spend $22 million on pest and predator control over 25,000ha of the nearby Heaphy River catchment in the Kahurangi National Park and 4500ha on and around the Denniston Plateau, as well as funding historic projects on the plateau itself.

"This is the largest ever compensation package negotiated by DoC for a mine or other commercial venture."

Mr Smith says he is "encouraged by the constructive discussions that have been taking place between mining companies, environmental, historic and recreational groups over recent months".

"A better way forward than having long protracted legal proceedings would be for the parties to come to a common agreement on the remaining areas of the plateau that should be set aside permanently for conservation and for mining.

"The government will be working with all parties to try and find a 'bluegreen' long-term plan for the whole Denniston Plateau that balances conservation protection with the need for jobs and development." 

Bathurst's South Buller mining plan sees the company taking around one million tonnes a year over five years from Escarpment, with Whareatea West contributing another million tonnes. It is targeting production of four million tonnes a year once two other mine projects in the North Buller are developed.

Bathurst shares last traded at 22 cents, having traded as high as $1.75 in April 2011, reflecting deteriorating investor sentiment as the would-be miner's resource consent and access problems have dragged on.

(BusinessDesk)