Eastern buys NZ mine

AUSTRALIAN-listed Eastern Corporation on Monday said it had agreed to buy Straith Industries coal mining operations in the Ohai area in New Zealand’s South Island for $NZ2 million, giving the company its second mine in the country.

Angie Tomlinson

Eastern will acquire Straith’s mining plant, equipment, permits and related assets and approvals.

Eastern said it would finance the purchase from existing cash reserves, on the basis of $1.5 million on completion and the balance within 12 months of completion.

Purchase completion is set for July 31, 2006 and is subject to due diligence, confirmation of the tonnage and quality of the existing coal resources and statutory consents.

Straith operations are in three separate areas within the Ohai/Nightcaps region, where opencut and underground coal mining has been conducted for more than 50 years.

Eastern said the Straith product was predominantly a sub-bituminous thermal coal, with potential application for use by domestic and industrial coal customers throughout the South Island.

Eastern said Monday’s acquisition would build on its presence in New Zealand and would secure an operation “in an area of the country’s South Island where considerable market opportunities may exist in the coming years”

Last year Eastern acquired the Cascade mine, also in New Zealand’s South Island. Eastern is currently exploring 5km north of Cascade at Whareatea West, aimed at proving up known coal resources for mine development.

In Queensland’s Bowen Basin, Eastern is in joint venture with Mitsui on a feasibility study into a coking coal development at Broughton adjoining Rio Tinto’s Hail Creek mine.