Coal miner Bathurst loses $60m appeal over payments for West Coast mine
Friday, 24 April 2020
Coal miner Bathurst Resources has lost an appeal over a US$40 million (NZ$60m) payment at a mine on the West Coast which has been mothballed since 2016.
A decision by Justices Kós, Gilbert and Goddard in the Court of Appeal released on Friday said Bathurst was liable to pay L&M Coal Holdings $US40m for mining permits it had bought in 2010.
Bathurst bought the Escarpment mine on the Denniston Plateau near Westport for $35m with another $40m due when Bathurst had shipped 25,000 tonnes of coal and another $40m payment when one million tonnes of coal had been shipped.
The Court of Appeal heard that Bathurst had mined 50,000 tonnes of coal from the mine but Bathurst claimed because it was not shipped overseas it did not count. It had sold the coal to Westport's Holcim cement plant.
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L&M Coal Holdings launched legal proceedings in 2016, won in the High Court in August 2018 and Bathurst appealed to the Court of Appeal.
The mine contains hard coking coal used for steel making, and is part of the company's Buller Project covering 10,000 hectares.
The company mothballed the mine in May 2016 with the loss of 21 jobs after its main customer Holcim closed the Westport cement plant and coal prices slumped.
The Court of Appeal decision said the performance payment should have been paid when Bathurst transported the coal from the permit areas by road, it did not need to be exported by ship.
The court heard the companies had amended the sale agreement in 2012. Bathurst claimed the amendment allowed it to defer the $40m payment and pay royalties instead.
The Court of Appeal disagreed.
Bathurst is listed on the Australian stock exchange and is a majority shareholder in BT Mining, that purchased coal mining interests from failed state coal miner Solid Energy in the North Island coal mines at Rotowaro and Maramarua, as well as the existing open-cast mine at Stockton on the West Coast which employs about 300 people.
L&M is a company incorporated under Belize law with its principal business office in Hong Kong. It is governed by its founder Geoff Loudon, a New Zealand-based geologist and investor in mineral resources.
Bathurst and L&M have been approached for comment.
'We are looking at this now and will make an announcement soon,' Bathurst chief executive Richard Tacon said.