Business South August 2020

34 | Volume 29 | Issue 4 businesssouth MINERALS & ENVIRONMENTAL HEALTH & SAFETY INSPECTION, VERIFICATION, TESTING & CERTIFICATION SERVICE & TECHNICAL ADVICE FOR ALL TYPES OF OPERATIONS Energy, Geochemistry, Environmental, Occupational Hygiene SCOPE OF SERVICES Hugh McMillan - General Manager Mineral & Environment, Health & Safety (EHS) Cell: +64 275 735 701 | Email: Hugh.mcmillan@sgs.com Caitlin Meredith - Business Development Executive Mineral & Environment, Health & Safety (EHS) Cell: +64 27 571 6507 Email: Caitlin.Meredith@sgs.com For a complete list of capabilities & product info please contact: “The reality is that coal – and West Coast coal - is still a crucial resource for New Zealand in the foreseeable future, even as we move to more renewable energy....” • to page 36 MINING - WEST COAST » Bathurst Resources Plenty of demand for Stockton coal Stockton delivers high-quality steelmaking coal for export and has an estimated 12 years’ reserves. Nick Gormack S ecuring access to new resources is the big- gest issue facing the mining industry on the West Coast as it looks to the future. Stockton General Manager Ian Harvey says the uncertainty around New Zealand mining legislation and the overall future for coal is an ongoing issue for the industry. Located in the Buller Coalfield, Stockton is the largest opencast coal mine in New Zealand. The former Solid Energy mine is now owned and run by BT Mining - a partnership between Bathurst Resources (65%) and Talleys Energy (35%) - who took over in 2017. Bathurst’s other major coal mine on the coast, also in the Buller Coalfield, is the Escarpment mine which is currently not in production. As one of the largest employers in the Westport area, Ian says BT Mining’s Stockton operation is a major contributor to the community and its economy. “Since 2000 we estimate the mine has contrib- uted around $1.2 billion – that’s revenue minus costs - to the regional and wider New Zealand economy, there’s only been one year in that time that Stockton hasn’t made a profit and over that entire time the mine has consistently employed hundreds of people in well paid jobs” Stockton delivers high-quality steelmaking coal for export and has an estimated 12 years’ reserves, but Ian says that is only part of the overall picture. “Our coal reserves on the Escarpment would al- low us to keep going for another 30 years if we can get the permits required to access the reserves. “So there is a big political question around that – it makes it very difficult for us in terms of planning. Once you have the permits in place then it takes a long time to start developing the infrastructure to mine an area....it can’t just be turned on immedi- ately. Ian says there is a lot of misinformation spread about the coal industry. “The reality is that coal – and West Coast coal - is still a crucial resource for New Zealand in the foreseeable future, even as we move to more renewable energy - you need coal to make steel for wind turbines.” Ian says the bituminous Stockton coal is a “very high quality resource”, with ash levels typically low by world standards. “It’s highly sought after by steel makers because of its low ash and low phosphorus content. And it swells strongly on heating – an essential attribute for the production of quality coke.” “There is no alternative to coal on the horizon for steel making in next 30 years and the world needs steel.” All of the Stockton coal is exported for steel production. Japan, Korea and India are the main markets, with Australia also taking a large chunk “The steel mills use a blend of coals, use a little bit of our coal with lower quality colas, tweak the blend to get the best performance at the lowest cost for steel making.” Ian says one of the battles for Stockton is that the export coal price can vary considerably, as demand fluctuates. “Currently the coal price is at $US117/tonne, compared with $US185/tonne a year ago. The worldwide demand for coal has been adversely affected by Covid-19 – in Japan and Korea steel production is down 50%, and in India around 30%, so there is an excess of coal in the market.” “For us it’s not a simple matter of lowering production if demand drops off – our fixed costs at the mine remain relatively static, around 20%, so it’s better for us to maintain a consistent level of production.” Ian says Stockton has around 300 full-time work- ers, who mostly work a Monday to Friday roster. “We need to keep the operational costs as tight as we can...but we want to try and maintain con- stant employment for as many people as we can. “We also need to retain skills. Some of these jobs are very highly skilled, so we can’t afford to lose people in lean times as you won’t get them back or replace them easily when things pick up again.” In terms of meeting its regulatory requirements, Ian says BT Mining is committed to extensive and thorough rehabilitation of the environment. “We take that very seriously. To get the permits we need we have to show that we are doing a good job and we are absolutely committed to that process.’