Phoenix Coal, Solid Energy agree to mine purchases

Three Solid Energy mines will be sold to Phoenix Coal (file)
Three Solid Energy mines will be sold to Phoenix Coal (file)

The Bathurst Resources and Talley's Group joint venture, Phoenix Coal, is to pay $46 million to buy Solid Energy's Stockton, Rotowaro and Maramarua Mines.

The sale of the former state-owned enterprise's assets was confirmed on Monday, with ASX-listed Bathurst now setting out details of the transaction as it seeks to raise capital for the transaction from investors.

Phoenix Coal has also agreed to a semi-annual payment based on revenue from coal sold from the Stockton Mine, which will only apply if coal prices rise above $150 per tonne.

This structure will be in place for four years and the maximum that will be paid out over that period is $50 million.

The joint venture's funds include $14 million from Talley's Group for a 35 percent stake, $26 million from Bathurst Resources for a 65 per cent stake and a $15 million debt facility from lender Bank of New Zealand.

This will meet the $46 million purchase price and ensure $9m for working capital and bonds.

The sale is conditional on gaining approval from the Overseas Investment Office.

Buller District Mayor Garry Howard says the sale is a good sign for the community.

"It gives stability to the whole arrangement that Phoenix are putting in place," he says.

"There has been a high level of anxiety in the community previously this gives a good picture of whats in front."