Miner may export from Timaru

by Jamie Shaw

Local miner, Eastern Corporation, looks set to export its Denniston coal out of Timaru after paying $2.4 million for a coal stockpile, blending and distribution centre there.

Brisbane-based Eastern, which owns the Cascade mine near Denniston, announced the purchase last week as it also finalised details of a $2m takeover of the Straith mine in Southland’s Ohai/Nightcaps area.
Chief executive Mike O’Brien said the Timaru stockpile facility was an important addition to Eastern’s operations and would service both its New Zealand mines.

The facility was situated midway between Cascade and Straith – which Eastern takes over next Friday - and offered immediate access to several large industrial customers. The port of Timaru could be considered for export of Eastern’s coal, he said.

The company currently trucks coal from the Cascade mine to Lyttelton Port for export.
Eastern business development and corporate relations manager Sam Aarons said the company had looked at exporting from Westport but she hinted that would probably be too expensive.

“We’re having trouble getting it out through the (Westport) port because Solid Energy actually control that coal loading facility,” she said. “We’re not saying we can’t (export from Westport) but there is a cost involved and we can understand that.”

Ms Aarons said coal would probably now have to be trucked from Cascade to Timaru because Solid Energy (SE) contracted most of the rail capacity from Ngakawau to Lyttelton. But Grey’s Pike River coal mine, if it went ahead, could provide Eastern with another export opportunity.

Pike River is expected to export coal through the port of Greymouth.

However, Ms Aarons said Eastern’s “full focus” at present was on providing coal for the domestic market.
SE communications director Vicki Blyth said SE was happy to make the Westport loadout facility available to other companies. But “obviously it has to be as a commercial venture”, she said. “We’ve got certain costs associated with that facility and we’ve got to cover them…(If somebody else wants to use it) they have to pay commercial rates.” Ms Blyth said SE last year offered Eastern a discounted rate to use the facility to “help them develop their export business”. But Eastern had not been in contact with SE regarding transport issues for some time.

SE could also offer some of its rail capacity to other companies – at a cost. SE had cut a deal this year with Roa Mining which saw it rail coal from the Roa Mine, near Greymouth, to the Port of Lyttelton. A similar deal could be offered to Eastern. But it had been “some time since they (Eastern) have come back to us on specific issues of transport”, Ms Blyth said. Southland “opportunities”

Mr O’Brien said the Straith purchase would expand on Eastern’s New Zealand presence and secure operation in an area where “considerable market opportunities” existed.

“The acquisition is an important step in Eastern’s strategy of expansion in New Zealand. It is Eastern’s intention to build a robust, self-sufficient mining operation there which will generate cash flow to fund the company in the development of its current projects and pursuit of new opportunities.”

Mr O’Brien said all necessary mining permits and consents for Straith had been transferred and infrastructure was in place for production exceeding 100,000 tonnes a year.

Last year, Eastern bought the Cascade mine for $3.5m from Cascade Mining Limited. It plans to in- crease annual production there to over 100,000 tonnes a year.

The company is also currently exploring at Whareatea West, 5km north of Cascade, which it also plans to develop into an operating mine.

Source: Westport News 14/09/06