PERTH (miningweekly.com) – ASX-listed Bathurst Resources has been ordered to make a $40-million ‘performance payment’ to privately held L&M Coal holdings by the High Court of New Zealand, relating to the company’s Escarpment mine, which was placed on care and maintenance in 2016.
L&M in December 2016 launched legal proceedings against Bathurst claiming that the company was due a performance payment under a 2010 agreement for sale and purchase of the rights to mine at Escarpment, and subsequent contractual amendments.
Bathurst argued that at no time had any coking coal from the Escarpment mine been exported for sale before the project was placed under care and maintenance, which in the company’s opinion meant that the threshold for the performance payment had not been reached.
However, the High Court disagreed with the company, finding that the performance payment trigger was reached as more than 25 000 t of coal had been transported from the mine permit areas, regardless of the type of coal and whether it was exported.
Bathurst told shareholders that the company was extremely disappointed by the High Court judgment, and that it had decided to appeal the decision.
The miner has until September 14 to lodge its appeal.
L&M for its part has said that it will oppose any appeal, instead inviting Bathurst to “focus constructively on taking active steps to commence exploiting the valuable coal resources on the Denniston Plateau from which L&M is entitled to be paid royalties”.
L&M will also continue to press Bathurst to fully comply with a number of other outstanding contractual obligations in connection with the permits for mining on the Denniston Plateau, which the company sold to Bathurst eight years ago.