The Nation: Tuku Morgan and Hamish Bonhannon

ALLOCATING WAIKATO RIVER WATER

One of the key figures in the hui called this week by the Maori King to discuss water rights is suggesting that Councils lose the right to allocate water from the Waikato River.

Spokesman for the King and co-chair of the Waikato River Authority, Tuku Morgan, says the Authority could take over the allocation of water.

The Authority is a joint iwi-Crown body principally concerned with cleaning up the river under a co-management deal.

Speaking this weekend on TV3’s “The Nation”, Mr Morgan said that the deal didn’t give the authority the right to allocate water.

“For that to change it’s got to go to another set of negotiations with the crown and that comes under the ambit of who determines water rights,” he said.

 Morgan said he didn’t want to pre-empt the outcome of next week’s hui.

But he said the river authority was well placed to assume the kind of responsibilities that were currently held with the regional council.

“That’s an issue to be taken and debated by members of the authority – we haven’t had that discussion,” he said.

“As members are not responsible for that at the moment – that will come out of a decision after negotiations with the crown.

“If the river authority were to assume the current responsibility of the regional council it would be exactly what the council does – they charge for water, they allocate water.

“And if the crown was of a view to pass that responsibility to the Waikato River Authority they’ll have to come and talk to us”

Mr. Morgan stressed the importance of this week’s hui.

“It is without a doubt the most significant issue to challenge our people.

“It’s the reason why we must talk in our unique way in our own time and our own space and on Turangaweiwei."

NEW ZEALAND TOO GREEN

Bathurst Resources CEO, Hamish Bohannon, says overseas shareholders in the company believe New Zealand is “too green”.

Bathurst is currently facing resource management consent appeals over its proposal to develop a coking coal mine of the West Coast’s Denniston Plateau.

Speaking this weekend on TV3’s “The Nation”, Mr. Bohannon said the problem was that New Zealand had an open ended loop for groups to keep appealing and appealing a deal until it got to the final Supreme Court hearing. 

“That isn't the case overseas,” he said.

“Normally once you’ve had a ruling that ruling is the ruling. 

“There are obviously first opportunity for appeal, but not re-appeal and re-appeal.”

Mr Bohannon said Bathurst believed it was possible to achieve a balance between preserving “the delicate ecology" of the Plateau with mining operations.

He said the mine would be an open cast mine and that meant the company would restore the area once the mining was finished.

“Open cast mining explicitly turns the soil, it's a bit like farming, the difference is once mining's finished you put it back. 

“Farming goes on effectively forever and ever. 

“And what we can do today is put things back pretty well as they were before, and make improvements. 

“We can remove the weeds; we can re-establish wetlands and so forth.”---

He said Bathurst was in a different situation to Solid Energy which faces massive capital write downs and possible mine closures.

The unfortunate thing that Solid has large operations, a large workforce, prices have come up, returns have shrunk, and they have to cut the cloth to suit the body,” he said.

“We're just in a different space at this moment.”

And he said his company believed the West Coast had great mining potential.

I think the West Coast has phenomenal opportunity, not only coal,” he said.

“There’s been a very good study by West Coast Development, West Coast Minerals on the potential there. 

“Clearly there is more coal in the south.  We're active in Southland now, and that is good thermal coal that can work in the domestic market.

“And there's gold opportunities, there's iron sand opportunity, we have opportunities throughout the nation.”

'THE NATION'

HAMISH BOHANNAN

Interviewed by RACHEL SMALLEY

Rachel China's steel production is slowing down and that’s being felt by the coal mining industry both here and in Australia. Coal prices are at their lowest since 2010 and are forecast to be down 25% in the December quarter. Solid Energy is in negotiations to close its Spring Creek mine with 230 jobs at risk. But one miner, Bathurst Resources seems to be bucking that trend and is continuing with plans to open a coke and coal mine at Dennison on the West Coast. Before it can mine however it needs to win two planning consent appeals. It's CEO Hamish Bohannan joins us now live from Wellington. Hullo Mr Bohannan thanks for joining us. Tell us first of all why you are here, what's attracted you to here?

Hamish Bohannan – Bathurst Resources CEO

Bathurst is in New Zealand, we are a New Zealand coal mining company, we don’t have any other assets or places of work, and we're in New Zealand because whilst we have a very modest on global scale or even Australasian scale, coal resource. The coal quality and the coal that we have here is some of the best in the world.

Rachel I think so far it's cost you around $250m in your fight. I know you’ve spent about $15m seeking resource consent as well. You're clearly very pro the situation here. What do you think, in your opinion what do we stand to lose if we don’t embrace mining?

Hamish I think mining is a very key element in any economy. The resource sector is real value for the people in the ground that needs to be realised and played back to make long term benefits to the economy and the infrastructure in any country. New Zealand has great mineral wealth in the ground and we need to turn that into real returns for the nation.

Rachel We certainly do have great untapped mineral wealth here. How is New Zealand viewed do you think by the mining industry in general?

Hamish What we do here is world class, our standards are world class, we have great mines but we are on a smaller scale. We have great opportunities, but one aspect and clearly we're in the middle of it, it is a fairly long road going between the discovery of a deposit, cos that’s a long road in itself, to the actual turning that into an operating mine, generating jobs, generating revenue, generating taxes back to the country.

Rachel And certainly the Greens would argue at great environmental cost too to the country. You can't argue can you that it would change the landscape of the Denniston Plateau forever really.

Hamish Well we do argue that and simply the opportunity today is with best practices, to make sure that there is a long term benefit to not only the economy but the ecology as well. We have a very special unique ecology here in New Zealand as we all know. We separated from Gondwana a long time ago. The unfortunate thing is that early on in the peace we introduced a lot of other species flora and fauna as well. So our native economy is heavily challenged and it is a very delicate ecology. What we in Bathurst are absolutely committed to doing is using some of our return back to that ecology. The area on Denniston Plateau that we're operating is one part of Denniston Plateau. It's a long mining history there, there are lots of old mine workings, and there's some long term effects that are ongoing today. So we believe that there is a balance and it is achievable.

Rachel So given all of that why are you facing objection after objection over this?

Hamish Well we're really facing two groups of objection and they keep appealing and appealing. One group is really focusing – or they're both focusing but the main argument is on climate change and its invocation of oceans. That’s a global impact. We in New Zealand produce today about six million tonnes of coal, there's about six billion tonnes of coal produced on the planet. So doing things differently in New Zealand is really trying to steer the Titanic by hanging on to the flag at the back. We are concerned about climate change. To us it's all about using coal more efficiently and walking away from it, but we haven’t got a solution today. It might be a 30 year or 20 year or 50 year programme. The other argument is the ecological damage. Open cast mining explicitly turns the soil, it's a bit like farming, the difference is once mining's finished you put it back. Farming goes on effectively forever and ever. And what we can do today is put things back pretty well as they were before, and make improvements. We can remove the weeds, we can re-establish wetlands and so forth.

Rachel Last week I think it was you said that foreign investors perceived New Zealand as being too green. What do you mean by that?

Hamish This is feedback I've had from some of our shareholders, particularly the shareholders overseas, and it's not that we're too green per se, that’s clearly the words I used, but what it is we have an open ended loop for groups to keep appealing and appealing the deal until it gets to the final Supreme Court hearing. That isn't the case overseas. Normally once you’ve had a ruling that ruling is the ruling. There are obviously first opportunity for appeal, but not reappeal and reappeal.

Rachel We've had two ministers on this programme Mr Bohannan and Steven Joyce. Both floated the idea that the government could potentially fast track projects of regional significance and by that they were talking about mining pretty much. Are you confident the government will do that?

Hamish I'd love to think the government will do that, and it's not detracting from public opinion, it's not detracting from public say in the process, it's not detracting from the appeals, but it is really just putting a finer ending on it. Investors need to know whether a project is going to go ahead or not, and need to know in a finite timeframe. Global investors will put their money where they get a return. They don’t want to put it in an account where it gets nothing for two or three years, they'd like to see a return in a reasonable timeframe.

Rachel Are you confident your project will go ahead?

Hamish Yes we are, we firmly believe the whole team behind us believes that we will make a net gain for New Zealand and New Zealand's ecology.

Rachel Have you had conversations with the government about potentially this process being fast tracked?

Hamish Not this process but certainly talked about the process in general. We aren’t only here for this escarpment we're also in Southland. The whole process is key for the industry, not just for Bathurst.

Rachel What sort of conversations have you had and with whom?

Hamish We had a forum in Rotorua only two weeks ago that was professional at Mining and Metallurgy Association, Minister Heatley was there, and as a group, as an industry lobby, we all put forward the point that we need to have a clearer route to taking mineral prospects from an action in the group to an actual return to the economy.

Rachel And did he reassure you that that will happen?

Hamish He reassured us that the government is working on it yes.

Rachel Alright, it is a fraught process, there are significant difficulties with this, appeal after appeal. Why do you keep pouring millions into it, what do you think Bathurst stands to gain financially out of this?

Hamish I think Bathurst is held by our shareholders, 9% of those shareholders are Kiwis at the moment and I'd love to see that proportion change. So as for Bathurst it's increasing the value of the company. For ourselves as the Bathurst team it's creating jobs. We are a New Zealand company, at the moment we employ about 100 people, that will increase to about 450 people with this project. We believe in really making a contribution to New Zealand and being part of New Zealand Inc.

Rachel How do you maintain your optimism when we know the spot price for coke and coal since June I think has fallen by about 22%. Surely the economics of this project have changed quite remarkably this year?

Hamish I started out as a miner 35 years ago. I've been in the mining game ever since. We are price takers, commodities go up, they go down, and coal is no different from iron or copper or anything else. Wheat is too. All the commodities go up and down. So prices have come off, they’ve come off considerably from the high of 18, 24 months ago, but they're still on a long road improving trend. This isn't a short project, this is for the long term. With best practices, with efficient operations we believe there's a real gain to be made for our shareholders and for New Zealand.

Rachel Clearly Solid Energy doesn’t share the same optimism as you. Where do you think Solid Energy went wrong?

Hamish I don’t think Solid Energy have gone wrong per se, we're in slightly different spaces. We're at the moment a smallish team focused on our project in Westport, we've got operations in Southland, some small operation on the Denniston Plateau already. So we're in an enviable position really in that we've got a very focused spend. The unfortunate thing that Solid has large operations, a large workforce, prices have come up, returns have shrunk, and they have to cut the cloth to suit the body, and that’s where they're at. We're just in a different space at this moment.

Rachel Okay different space, you also seem more optimistic perhaps. Where else do you see that there are mining opportunities in New Zealand?

Hamish I think the West Coast has phenomenal opportunity, not only coal. There's been a very good study by West Coast Development, West Coast Minerals on the potential there. Clearly there is more coal in the south. We're active in Southland now, and that is good thermal coal that can work in the domestic market. And there's gold opportunities, there's iron sand opportunity, we have opportunities throughout the nation.

Rachel So what is Bathurst Resources' bottom line here. You’ve spent $250m is there a point where you will say that’s enough we're pulling out?

Hamish We've spent $250m or committed $250m to the purchase of all the assets. We've spent some $15m on the licensing path so far. No there isn't a bottom line, we are committed to this project, we believe that our $250m investment on the West Coast will generate significant returns to the shareholders and the economy. We have some 50 odd million American dollars in the bank today, so we're not going to run out of money in the foreseeable future, and we have access to considerable funds. So we are confident that we will bring this project to be a real jewel on the West Coast.

Rachel A 100% confident?

Hamish Absolutely.

Rachel Alright. Bathurst Resources CEO, Hamish Bohannan, very much appreciate your time this morning. Thank you.

ENDS

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