On 17-18 November, 21 heads of state will come to Port Moresby for the Asia-Pacific Economic Cooperation (APEC) summit. Set against a backdrop of debts and a declining economy the Nautilus Solwara 1 project speaks volume to another PNG Government failed investment that will be a further economic burden to the country.
Sir Arnold Amet, former Papua New Guinean Attorney General and Minister for Justice Papua New Guinea, “Nautilus is propped up by USD 15 million in loans from its two major shareholders, it’s been forced to reduce its workforce and to terminate contracts for the construction of equipment.”
“Even the production support vessel crucial to Nautilus operations has had to be shelved due to failure to pay the shipyard constructing it. And Nautilus is now virtually worthless with its shares at a new record low of less than 10 cents each.”
Canadian company Nautilus is still desperately seeking funds for its flagship Solwara 1 deep sea mining project. Commercial operation has been delayed year after year since it received its licence to mine the floor of the Bismarck sea in 2011. In a last-ditch bid to finance Solwara 1, Nautilus’s two largest shareholders, Russian mining company Metalloinvest and Omani conglomerate MB Holdings, have formed a new company whose sole job is to secure funding for the Solwara 1 project . However, their attempts have failed.
Sir Amet continued, “Nautilus is due to repay the USD 15 million loans to Metalloinvest and MB Holdings on 8 January. How will it achieve this? There’s no likelihood of production starting until the end of 2019 or even later.”
“I’m really worried that the PNG Government invested heavily to purchase 15% of a company that will be a burden to our economy. Our country’s over-extended finances may have to contend with a 15% stake in Nautilus’ bankruptcy.”
Sir Amet emphasised, “Wiser investors such as Anglo American and Loews Corporation got rid of their shares early this year to reduce their exposure to risk. The PNG Government should terminate its contract with Nautilus now before it sacrifices even more of our nation’s funds.”
“In light of PNG hosting the APEC Summit at the end of this week it is important to highlight risky commercial ventures such as Nautilus Solwara 1 project that have used scarce public funds over environmental safeguards, regulatory frameworks and the livelihoods of our coastal peoples.”
 Management Discussion and Analysis of Financial Condition and Results of Operations, Nautilus Minerals, 10 August 2018 http://www.nautilusminerals.com/irm/PDF/2056_0/MDAfortheperiodendedJune302018
 ‘Nautilus notified of rescission of shipbuilding contract’, media release, Nautilus Minerals, 4 July 2018, http://www.nautilusminerals.com/irm/PDF/2049_0/Nautilusnotifiedofrescissionofshipbuildingcontract; ‘Nautilus Minerals tanks on shipbuilding contract cancellation’, Mining.com, 4 July 2018 http://www.mining.com/nautilus-minerals-tanks-shipbuilding-contract-cancellation/
 Nautilus signs funding mandate with major shareholders, Nautilus Minerals press release, October 11 2017, http://www.nautilusminerals.com/irm/PDF/1929_0/Nautilussignsfundingmandatewithmajorshareholders
 ‘Anglo American to exit stake in deep sea mining company’, Financial Times, 5 May 2018 https://www.ft.com/content/ad58aee6-4fad-11e8-a7a9-37318e776bab