Bathurst Resources (ASX:BRL) will close its Canterbury Coal mine in New Zealand, citing ongoing costs and the delays associated with obtaining regulatory consents for the current operations, as well as an inability to reach an agreement on a longer-term economic solution with the local regulatory bodies.
Located about 70 kilometres west of Christchurch, the Canterbury Coal mine is the smallest mine in BRL’s portfolio, with expected FY21 EBITDA of $2 million. The mine produces low sulphur coal primarily for the local dairy industry.
CEO Richard Tacon said coal will continue to be supplied to customers until June 2021, when the mine will formally move to care and maintenance.
“We have worked hard to turn around a small mine into a well-run, award winning and environmentally sound operation that provides jobs for New Zealanders in a regional area,” Mr Tacon said.
“We have reached the point at which the timeframes and cost of regulatory processes outweigh the commercial returns of continuing to operate the mine.
“This was an outcome that we fought to prevent, recognising the cost of the staged job losses that will follow. And also that our customers will now need to source coal from much further way, meaning an increased transportation cost and carbon footprint.”
Bathurst said the decision will have no bearing on its other operations, all of which have longer-term regulatory consents in place with supportive local councils.