Deep Sea Mining Campaign | 4 January, 2019
The clock is ticking for Nautilus Minerals. The company has been struggling for some time as it seeks to force through the first experimental deep sea mining project, Solwara 1, off the coast of Papua New Guinea, despite concerted opposition.
Nautilus has been receiving bridging loans from its two main shareholders, Russian mining company Metalloinvest and Omani conglomerate MB Holding. These loans are due for repayment within days, on Tuesday 8th January. The company has no resources to pay the money back. Their sole priority has been trying to raise enough money just to survive, and there have been no announcements indicating any success.
Andy Whitmore of the Deep Sea Mining Campaign said: “The looming deadline follows a string of bad news stories for the company, which means they are unable to estimate when any mining may start, and therefore when they may ever make money. The most recent blow has been the loss of their crucial production support vessel after payments stopped to the shipyard building the ship.”
Nautilus’s share price has been hovering around the historical low of CAN $0.05.
What happens when Nautilus defaults on the loans is not clear. The shareholders have so far seemed unwilling to extend the loan period and given the lack of any clear profitability it is not sure why they would.
Likewise, given the apparent state Nautilus is in, it is difficult to imagine anyone wanting to take-over the company. That only seems to leave options to negotiate a court-appointed ‘restructuring’ to satisfy its creditors or to file for bankruptcy.
What the failure of the company would mean locally is still unclear.
Jonathan Mesulam from the Alliance of Solwara Warriors stated “For those who have campaigned hard to stop the project, the end of Nautilus is a step in the right direction. However, local communities opposing the Solwara 1 project, their legal team, and international partners will not rest until the PNG Government cancels the operating licence and associated permits for Solwara 1.
“This is the logical next step given the level of local opposition, growing international awareness of the risks associated with deep sea mining and the clear financial risks involved in such an enterprise – particularly for a nation as debt-ridden as Papua New Guinea.”
Andy Whitmore added: “We have been raising the financial, ecological, and social risks associated with the Solwara 1 project for some time. Seeing the end of Nautilus will be a huge relief for those who would be impacted, but the struggles of this flagship company also calls into question the whole deep sea mining industry.”
All eyes will be on Nautilus come 8th January.