Development West Coast buys $3m of mining company shares
Wednesday, 22 November 2023
Development West Coast has spent $3 million investing in minerals, ports and logistics company WMS Group.
WMS Group is made up of Westland Mineral Sands, which operates a sand mining company in Cape Foulwind near Westport, and West Coast Bulk Logistics Ltd, which exports the minerals and leases and operates the ports of Greymouth and Westport.
Development West Coast was set up in 2001 with $92m of government money to offset the impact of the end of native timber milling on the West Coast economy.
It is governed by a board of trustees, of whom three are elected, three appointed and a further two are tangata whenua-appointed.
Chief executive Heath Milne said the decision to invest aligned with the trust’s objectives of promoting sustainable employment opportunities and economic benefits for the West Coast.
Milne said the trust was confident in the company’s ability to build a resilient, low carbon supply chain and become a reputed exporter of high value mineral sands to global markets.
He acknowledged the company had faced some opposition when it was seeking resource consent for its Buller mine. Another company’s sand mining operation in Barrytown has also been subject to fierce opposition from residents.
The company is hoping to open another mine near Hokitika, with the promise of $71m in export revenue and between 65 and 70 jobs.
Milne said the company had been through a rigorous consenting process and the minerals it produced were essential to green technology like solar and electric vehicles, and also smart phone components.
He could not say how many shares the $3m investment would give the trust, as the company was still raising equity.
WMS Group chairperson Duncan Hardie said the partnership with DWC would give West Coast communities a stake in the company’s future.
“We are making a long-term commitment to the West Coast and we want to leave a lasting legacy for future generations,” he said.
“This support will help us on the path to growing our operations, creating jobs, continue our local spending with other businesses and industries and help us support community initiatives through sponsorship, giving the West Coast economy a real boost.”
Managing director Ray Mudgway said the company was on track with plans to seek resource consent for a second site at Mananui, south of Hokitika, through a publicly-notified process.
It was also preparing for the arrival of a motorised barge for low carbon transport of its product early next year.
According to its 2023 annual report, Development West Coast's investment portfolio dropped $7.3m, to $139.6m.
The fiscal year closed with a $5m net deficit, in contrast to the previous year's $2.8m profit.
Despite this, it approved 12 out of 14 commercial funding applications, totalling $4.2m, and invested an additional $8.2m in regional development projects and community distribution.
DWC’s direct investment into the West Coast economy has now reached $182.8m.
It previously made a number of failed investments, including $3m on an unsuccessful cranberry farm and $13m into a struggling dairy farm.
An $880,000 investment in Putake Honey sparked controversy because it processes honey in Blenheim, not on the West Coast.