West Coast garnet mine granted $10m Government loan scrapped
Friday, 13 March 2020
A proposed West Coast garnet mine granted a $10 million Government loan has been scrapped.
It is the third Government loan on the West Coast that has failed to eventuate.
Regional Economic Development Minister Shane Jones' Provincial Growth Fund (PGF) gave Barton New Zealand an interest-bearing loan for the operation in Ruatapu, just south of Hokitika, in November 2018.
Barton New Zealand vice president Clifford F Summers IV confirmed the company had put a stop to the project.
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'Barton has decided to stop development of the Ruatapu Garnet Project due to changing global market conditions,' he said.
Alluvial garnet is mainly used as an industrial abrasive – such as water jet cutting or in products like sandpaper.
A Ministry of Business, Innovation and Employment spokeswoman said the Barton group would not be taking up the $10m PGF loan.
'Barton has informed the Provincial Development Unit that world market conditions have changed with increased garnet supplies available long term and that means the West Coast resource is no longer an economic proposition.
'Barton told the PDU the decision to abandon the project is purely a commercial one and not related to processes to advance the West Coast project,' she said.
No money had been paid to Barton.
Applications were assessed on merit and their fit with the criteria of the fun, the spokeswoman said.
'We recognise that things can change over time. Withdrawals can happen for a wide range of reasons.'
The loan was subject to the company gaining resource consent and Overseas Investment Office approval. Barton New Zealand is part of US firm Barton Mines, which has been garnet mining globally for 140 years.
At the time, Jones said the mine would create up to '50 high-paying jobs' and boost regional transport and trade industries. But the Department of Conservation staff had raised concerns about the mine's effect on neighbouring conservation land, which includes wetlands and whitebait spawning grounds.
The prospector who discovered the garnet at Ruatapu, Duncan Hardie of Hardie Resources, said there was an increased supply of garnet internationally as some new mines had opened up in Africa. He retained the exploration licence for the deposit.
'I am disappointed but I am certainly not giving up on it. Barton spent many millions of dollars on the project and leave behind a legacy of some 400 drill holes and we have that data.'
The deposit included other rare earth minerals: gold and iron sand. Hardie said he hoped another company would look at the project differently.
Hardie explored Ruatapu and found 'quite a concentration' of garnet about nine years ago but ruled out mining because of the transportation costs.
He welcomed a recent PGF announcement of $4m for Westport and Greymouth's ports, saying it could help get bulk commodities off the West Coast more economically than road or rail.
Other companies offered PGF loans to create jobs on the West Coast included $15m for a gold mine near Reefton, $9.9m for Westland Milk Products and $3.3m for Williams Hotel Group to build hot pools in Punakaiki. The terms of the interest-bearing loans have not been revealed, with Jones declaring them confidential.
Both the Williams Group and Westland Milk withdrew their applications for funding.
Williams Group declined to comment on the reasons for withdrawing from the loan. It had said in its loan application it intended to develop three large spas, six hot tubs, four treatment rooms at the Punakaiki Resort for up to 200 customers.
The Government had given Westland Milk Products a $9.9m loan to help build a plant to separately process multiple types of special quality milks into high value products. It withdrew after it was sold to Chinese company Yili.