Bathurst Resources reported a first half EBITDA of $27.5 million, surpassing forecasts despite export disruptions, yet lowered its full-year EBITDA guidance to $45-$55 million due to reduced export volumes and softer coal prices.
- H1 FY25 consolidated EBITDA of $27.5 million ahead of forecast but down from prior year
- Full-year EBITDA guidance downgraded by $10 million to $45-$55 million
- Export segment impacted by Tawhai Tunnel closure and lower HCC benchmark prices
- Domestic operations in North and South Islands delivered positive results
- Fast Track Approvals Bill enacted, expediting project approvals including Bathurst’s key developments
Strong H1 Performance Despite Export Headwinds
Bathurst Resources Limited (ASX: BRL) has reported a consolidated EBITDA of NZD 27.5 million for the first half of fiscal year 2025, exceeding internal forecasts despite significant operational challenges. The standout issue was the extended closure of the Tawhai Tunnel, a critical rail link for export shipments from the Stockton mine, which forced the company to rely on a costly and capacity-limited road freight plan.
While the EBITDA beat is commendable, it represents a slight decline of NZD 0.7 million compared to the same period last year, primarily due to reduced export earnings. The company’s export volumes were curtailed by the tunnel closure, and the average Hard Coking Coal (HCC) benchmark price softened, further pressuring revenues.
Full-Year Guidance Revised Lower
Reflecting these headwinds, Bathurst has prudently lowered its full-year consolidated EBITDA guidance to a range of NZD 45 million to NZD 55 million, down NZD 10 million from prior guidance. The downgrade factors in a continued subdued HCC price environment and the lingering effects of the export logistics disruption. The company’s hedging strategy has partially mitigated price volatility, but not enough to offset the volume and price declines fully.
Notably, the reopening of the Tawhai Tunnel in January 2025 is expected to restore rail freight capacity and reduce costs, with the Stockton mine ramping up to a seven-day rail schedule through June 2025 to meet export commitments.
Domestic Operations Provide Stability
Bathurst’s North Island and South Island domestic coal segments delivered solid operational and financial results, cushioning the export segment’s setbacks. The Rotowaro mine advanced significantly in the Waipuna West Extension pit, doubling coal production year-on-year and increasing overburden removal. Similarly, the Takitimu mine outperformed forecasts in production, sales, and overburden removal.
This domestic resilience underscores Bathurst’s diversified asset base and operational flexibility, which are critical in navigating volatile export markets and infrastructure disruptions.
Regulatory Tailwinds from Fast Track Approvals Bill
In a positive development for Bathurst and the broader mining sector, New Zealand’s Fast Track Approvals Bill was enacted in December 2024. Both the Buller Plateaux Continuation Project and the Rotowaro Continuation Project are listed under this legislation, which promises accelerated statutory processing times for major projects. This regulatory reform could materially shorten Bathurst’s project development timelines, supporting future growth and export capacity.
Market Outlook and Strategic Considerations
The global coking coal market remains challenging, with the HCC benchmark price dipping below USD 190 per tonne late in the quarter amid weak steel demand and geopolitical uncertainties, including ongoing sanctions affecting Russian coal supply. India’s increased use of discounted Russian coal and potential US tariffs on Chinese imports add complexity to market dynamics.
Bathurst’s strategic focus on operational efficiency, cost control, and leveraging domestic markets will be crucial as it navigates these headwinds. The company’s investments in British Columbia projects, including the Tenas Coking Coal and Crown Mountain projects, continue to progress, potentially diversifying future revenue streams.
Bottom Line?
Bathurst’s ability to manage export disruptions and capitalize on regulatory reforms will be pivotal as it seeks to regain momentum in a volatile coal market.
Questions in the middle?
- How will Bathurst’s export volumes recover post-Tawhai Tunnel reopening and what is the timeline for full capacity restoration?
- What impact will the Fast Track Approvals Bill have on Bathurst’s project development schedules and capital expenditure?
- How resilient is Bathurst’s hedging strategy against further declines in HCC benchmark prices?