“This is a key milestone in finalising the logistics chain that will see the value of the Buller coal field realised in international markets,” Bathurst announced.

Under the deal, Westport will build a coal unloading system, stockpile area, ship loader and a wharf.

Bathurst will rail coal to the proposed facility while Westport will provide the handling and exporting services.

The explorer expects coal volumes to reach 2 million tonnes within 3 years after the facility is built and operating.

“We look forward to working with Westport Harbour to finalise the agreement that should lead to the development of not only the necessary infrastructure for the project but also a first class facility for Westport,” Bathurst chief executive Hamish Bohannan said.

Bathurst recently appointed investment bank UBS, fuelling discussion the junior could be subject to a takeover offer down the track.

Bathurst also expanded the Buller project area by acquiring Galilee Energy’s Eastern Resources Group for $35 million.

ERG’s underexplored Whareatea West coking coal project was surrounded by the Buller project, while ERG’s Cascade and Takitimu mines collectively produce around 200,000 tonnes per annum of thermal coal for the domestic market.

Bathurst aims to start mining the Escarpment deposit of the Buller project in the December quarter of 2011 to produce about 650,000 tonnes of hard coking coal in an area containing old workings.

A ramp-up to 1Mtpa was expected in 2012 when mining would move into an area of virgin coal.

In the 2012-13 financial year, Bathurst expects the Deep Creek prospect of the project to start up, doubling production to 2Mtpa.

Two years later, the explorer aims to kick off another open cut operation at the North Buller prospect to ramp up to 4Mtpa of product coal.

Bathurst shares were up almost 2% yesteday but have sunk 1.4% this morning to $1.06.