New Zealand-based producer Bathurst Resources expects China's government to release new quotas for coal imports in the next month, bringing Chinese buyers back into the market.
The firm is confident enough in the outlook to issue an earnings before tax and interest guidance of NZ$62.1mn ($41.7mn) for the year to 30 June 2021, down from the NZ$76.8mn it achieved in the previous year on lower seaborne prices.
Bathurst because of its operations in New Zealand is not caught up in the diplomatic tensions between Australia and China, and the call by Beijing to stop imports of Australian coal. The firm expects coal demand to increase over the next few months driven by the price differential between domestic Chinese coal and seaborne coal, as well as increased buying from outside of China as steel producers restore output after Covid-19 lockdowns.
Bathurst sold 329,000t of coal during July-September, down from 408,000t for the same period a year earlier. It made a small operating profit in the latest quarter, with coal sales revenue of NZ$35mn against production costs of NZ$29mn.
Bathurst reopened the 1mn t/yr Stockton export coking and thermal coal mine in the West Coast region of New Zealand's South Island in late April after it was closed for four weeks during the New Zealand Covid-19 lockdown. It has been operating normally since.
Bathurst also operates four mines that supply thermal coal to the domestic market — the Maramarua and Rotowaro operations in the North Island and Takitumu and Canterbury in the South Island.
Bathurst plans to expand exports from New Zealand by increasing the quality of the Stockton coal and lowering sulphur levels by blending with coal from its Buller Plateau assets and leveraging off the Stockton infrastructure to develop Escarpment and, at a later stage, the Whareatea West mines. The Buller Plateau assets include Escarpment that was closed in April 2016 because of weak coking coal prices.
