17 Dec 2012

Demand for high quality coking coal will continue

7:06 am on 17 December 2012

Bathurst Resources says high quality coking coal will always be in demand.

The coal company, which is based in Perth, says that while the price for coal is tracking downward at the moment, it has a strong future, especially for steel construction.

Bathurst currently has exploration and mining permits, as well as two mines in the South Island.

Bathurst has also been granted resource consent to mine 200 hectares of the West Coast's Denniston Plateau, despite objection from environmentalists, who say the area needs to be protected. The consent is being appealed.

Managing director Hamish Bohannan said there is no replacement in steel.

"New Zealand produces some 6 million tonne of coal a year in a global production of about 6 billion tonne of coal a year, so we're very much price takers."

Although prices go up and down, Mr Bohannan said he's optimistic about the future for high quality coking coal as there is still going to be demand for steel particularly from India and China.

He said overall the fundamentals are the same because coking coal will be needed for the foreseeable future given that there is no replacement in steel.