Miners feel cool coal price
New Zealand coalminers are "reviewing" their development plans because of weak international coal prices.
Bathurst Resources has plans to ramp up production on the West Coast's Denniston Plateau, but now says it is rethinking the timing of that expansion.
State-owned coalminer Solid Energy is also worried about the impact of lower prices on its business, saying it is running a tight ship and keeping costs low to match the lower income.
Bathurst's managing director Hamish Bohannan said yesterday lower prices for hard coking coal could impact on the company's plans.
Bathurst is already mining coal from the Cascade mine on the plateau, but has committed to significantly raise overall production mainly throughdeveloping the new Escarpment export mine.
"One of the things we're doing at the moment is whether we actually get into full production," Bohannan said.
"We're in the lucky position unlike [Solid Energy] of being able to that. We should have all our permits in the next couple of days, this is the authority to be able to operate [the mine]."
The Escarpment mine is part of the wider Buller Coal Project, which also includes coal reserves at Cascade, Deep Creek, Coalbrookdale and Whareatea West tenements. So far Bathurst has employed about 50 people, but wants to lift Escarpment's production to more than 1 million tonnes annually.
The miner hoped to get that endorsement for Escarpment sooner rather than later, Bohannan said. Some of the initial preparatory work to be done would include clearing soil off the site and building of water catchment areas to capture runoff from the mine.
Bohannan would not give a time on when work - including six to eight months of pre-production - would begin. That decision would depend on the market, he said.
"We're putting people into jobs and we don't want to say we're putting you into a job and then in six months' time say sorry guys you haven't got one."
Last week, the spot price for coking coal fell to US$122 a tonne, the lowest in a "long time", Bohannan said. Some positive signs existed, including dwindling coal stockpiles in China and increased demand from Asia for iron ore, he added.
Expectations for the sector overseas are mixed at best with one prediction that Queensland can expect more mine closures in a still oversupplied market. International investment banks are also cautious on demand and whether a recovery in the cyclical coal price would be a year or more away.
Buller District Mayor Garry Howard said while there was an acknowledgment among the region's workers that the coal prices were low, making a tough environment, positives also existed.
"There is concern within the community with those employed in the industry, but it is interesting the industry is still employing people presently . . . there's actually more inquiries from companies looking at [mining] opportunities."
One view was that coalminers, such as Bathurst, should put infrastructure and groundwork in place so they could start production as soon as the international coal price recovered, Howard said.
Bathurst's share price closed yesterday up 0.7 cents to 18.
- © Fairfax NZ News