Tag Archives: Nautilus

Nautilus remains on life-support

Prospective experimental seabed mining company, Nautilus Minerals, is to remain on life-support after it was rescued Monday by another $500,000 loan from its principal shareholders.

The longer-term future still looks bleak though, with its part-built mining support vessel already sold-off by the ship builder, and $5 million in funding needed before it can resume even basic company operations… 

Nautilus Receives Us500, 000

Post Courier | January 18, 2019

Deep Sea Mining Finance has lent Nautilus US500, 000 (K1.6m) to meet its short term funding obligations.
According to Nautilus’s corporate update this funding now will allow the company to assess its options, including various restructuring options while waiting to receive a US5million loan (K16m).
This loan if received would enable Nautilus to continue operations.
In its last week’s update the company stated that they are still in discussions with an arm’s length party to secure this loan.
The company also advises that a further press release will be made once these funds have been received later this week and further updates will be provided as circumstances warrant.
Nautilus is the first company to explore the ocean floor for polymetallic seafloor massive sulphide deposits. Nautilus was granted the first mining lease for such deposits at the prospect known as Solwara 1, in the territorial waters of Papua New Guinea, where it is aiming to produce copper, gold and silver.
The Company has also been granted its environmental permit for this site. Nautilus also holds highly prospective exploration acreage in the western Pacific (granted and under application), as well as in international waters in the Central Pacific.

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Rising tide of opposition to large-scale mining in Papua New Guinea

Porgera Landowners protest against Barrick Gold (2018).

PNG Mine Watch

Opposition to large-scale mining in Papua New Guinea is becoming more and more visible as communities become much more vocal in expressing their anger and disapproval.

Both existing and proposed new mines are feeling the heat from landowners who are realising the benefits they are promised are illusory and it is they and their families who suffer the severe negative environmental and social consequences of large-scale resource extraction.

Landowners in Enga have lodged a US$13 billion claim against the government over unfilled promises and environmental and social damage from the Porgera mine. The miner is owned by Barrick Gold and Zijin Mining and has been operating since 1989.

Meanwhile landowners in Madang are petitioning the government not to allow a planned K5 billion expansion of the Ramu nickel mine and they want the existing Basamuk refinery shut down. Again, it is the lack of tangible benefits and the environmental and social costs that are angering local people.

Proposed new mines in Morobe and the Sepik are also facing opposition.

Last week, landowners in Morobe forced the evacuation of the site of the proposed Wafi-Golpu mine. They are unhappy at the terms of an MOU agreement signed by the government with the mine owners, Harmony Gold and Newcrest Mining.

The landowners protest is supported by Morobe governor Ginson Saonu, who has already declared his opposition to the mine:

“People are not like before, when they had no knowledge, no idea, no education to read what’s happening in other parts of the world where there is environmental damage and so forth. Everybody is knowledgeable about what’s happening in other mines around the world, and even in Papua New Guinea like Ok Tedi, Bougainville and others.

The governor has identified agriculture and tourism as better development options in his Province.

At the same time, the Morobe Provincial government has passed a resolution rejecting the MOU for the mine and landowners living along the coast have declared their opposition to the planned dumping of toxic tailings in their seas.

The proposed Frieda river mine, to be developed by the Chinese company Guandong Rising Assets Management, is also facing strong opposition from landowners worried about the impacts of mining on the Sepik river, which is their lifeblood.

Communities have been organising their own protest meetings and have banned Mineral Resource Authority representatives from entering some areas.

Similarly, communities around the abandoned Panguna mine on Bougainville, have successfully petitioned against any moves to reopen the mine, forcing the Autonomous Bougainville Government and governor John Momis into an embarrassing climb down.

In another blow to the mining industry, Nautilus Minerals is on the brink of financial collapse, unable to complete preparations for its proposed experimental seabed mine, Solwara 1. Local communities and environmentalists have been waging a long running campaign against the mine.

Although the PNG government still seems determined to press ahead with new mining operations, the resistance from local communities, both those affected by existing mines and those threatened by the new operations, shows no signs of abating .

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Nautilus Minerals has five days to save itself

Prospective seabed mining company Nautilus Minerals says it has until January 14 to find a new source of loan funds or it will be unable to continue operating.

Nautilus is already surviving on life-support, having been relying on a series of short-term loans from its major shareholders to stay afloat all through 2018.

Nautilus was due to start repaying those loans on January 8, but has been given a 30-day lifeline with the repayment date extended to February 8th.

But, with its shareholders effectively refusing any further bailouts, the company is now relying on finding a new source of borrowing to continue to function beyond January 14.

Nautilus says it is in negotiations with a third party to secure a new US$5 million but ‘there can be no assurances that the Company will receive the necessary funding by [Jan 14]’.

Read the full Nautilus update

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TIME UP FOR NAUTILUS?


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.”[3]

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.

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For Nautilus Minerals, the debt comes due

The MV Nor Sky, a vessel chartered in 2008 by Nautilus Minerals to conduct environmental assessment at Solwara I, steams past the Tavurvur volcano near Rabaul.

Andrew Thaler | DSM Observer | December 19, 2018

2018 was supposed to be the year for Nautilus Minerals. Their three seafloor production tools — large underwater robots capable of mining seafloor massive sulphides from 1600 meters depth — were finally in hand and undergoing submerged testing. Their ship, the Nautilus New Era, was nearing completion. They had only a few hurdles left to clear before beginning production at Solwara I, the much-vaunted site of the world’s first deep sea mining operation.

Then the floor dropped out.

Nautilus suffered a body-blow in late-2017, when Japan beat them to the seafloor by mining a sulphide deposit off the coast of Okinawa. Though a small operation, their success effectively undermined Nautilus’s first-mover advantage, at least in the eyes of potential investors. “Japan becomes the first to mine a deep-sea hydrothermal vent” is not the headline Nautilus wanted to read as they advanced towards production at Solwara I.

In December, Marine Assets Corporation defaulted on a payment to the Fujian Mawei shipyard. The chairman of the board resigned in January. MAC defaulted again in July, and the vessel contract was ultimately cancelled. Following the news, Anglo American, one of their minority investors, very publicly divested themselves from the project. CEO Mike Johnson subsequently and abruptly departed the company after 6 years at the helm.

Meanwhile, Sir David Attenborough, arguably the most famous voice in the world, called deep-sea mining at hydrothermal vents “deeply tragic”.

While the company may have hoped for at least a small victory to close out the year—raising substantial funds or negotiating a new lease for the production support vessel—it was not the be. Earlier this month, Ocean Energy Ventures announced that they had acquired the contract for the Nautilus New Era and were no longer in negotiations with Nautilus Minerals to lease the vessel.

Who is Ocean Energy Ventures? Ocean Energy Ventures is a subsidiary of MDL Energy, an offshore service company that provides equipment and services to the energy industry based in India. Though initially in discussion with Nautilus about long-term leases of the vessel, the company reports that “OEV’s dialogue for the charter of the vessel to Nautilus Minerals was terminated on 5th October 2018 and Nautilus have been instructed to remove all of their equipment off the vessel.” This conflicts with a statement from Nautilus that negotiations for a joint venture to acquire the PSV were still ongoing as of December 2, 2018.

OEV is now re-purposing the vessel. The ship, previously dubbed the Nautilus New Era, has been renamed Amaya Explorer.

The final days of 2018 may prove critical for the company’s continued survival. Early this year, they were extended a significant credit line from their major investors, of which they’ve drawn down over $15 million. Nautilus is expected to begin repaying those debts beginning in January 2019. It’s not clear from where revenue for those payments will come nor how much of that debt the government of Papua New Guinea, who owns a 30% stake in the Solwara 1 project, will be liable for.

What this all means for Nautilus is unclear. In the short term, it certainly points towards significant setbacks for the Solwara I project. Without a support vessel, Nautilus will be unable to deploy the three massive machines built to mine seafloor massive sulphides. Production at Solwara I in 2019 seems unlikely. And without a clear pathway to profitability, Nautilus will have trouble attracting new investors just to pay back its loans. At less than $0.04 per share, Nautilus Minerals is trading at the lowest rate since they entered the Toronto Stock Exchange in 2006.

Representatives from Nautilus Minerals declined to comment.

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After the loss of a ship, deep sea mining plans for PNG founder

Marine life in Papua New Guinea. Image by martinnemo via Flickr (CC BY 2.0).

David Hutt | Mongabay | 26 December 2018

  • In 2011, Nautilus Minerals was granted a license to mine precious minerals from the seabed off the coast of Papua New Guinea, the first project in the world to gain deep-sea mining rights.
  • Nautilus said the project would be less destructive than land-based mining, but met with protests due to the potential impact on the complex deep-sea ecosystems as well as coastal communities.
  • A year ago, Nautilus failed to make a payment on a specialized ship being built for the project. Now the ship has been sold to another company, making it unlikely Nautilus will be able to fulfill its mining ambitions.

An ambitious plan to mine precious minerals from the ocean floor off the coast of Papua New Guinea looks to have run aground due to the developer’s financial problems.

In 2011, the government of Papua New Guinea granted Canada-based Nautilus Minerals a 20-year mining license covering roughly 500,000 square kilometers (193,000 square miles) of the Bismarck Sea, off the country’s eastern coast. The Solwara 1 project was the first in the world to be granted rights for deep-sea mining, whereby enormous machines would dig into the ocean floor, harvesting zinc, copper and gold, and other commodities essential to building electrical equipment.

The Papua New Guinea government took on a 15 percent equity stake in the venture with Nautilus, but repeatedly delayed payments as its politicians and citizens protested against the environmental impact of the project, as well as the substantial cost to taxpayers.

In the meantime, Nautilus suffered numerous additional setbacks, including a shortage of investors, a declining credit line, and the decision by multinational mining firm Anglo American to divest from the company.

Now, the company has lost a ship essential to its deep-sea mining plans.

Nautilus chartered Emirati shipping operator MAC Goliath (MAC) to oversee construction of a production support vessel (PSV) designed to collect the extracted materials via pumps from the seabed. This vessel is essential to the entire operation.

The ship was being built at the shipyard of Fujian Mawei Shipbuilding in southern China. In December 2017, MAC missed a payment to the Chinese builder, which Nautilus was also unable to cover. At that point, the vessel was about 70 percent complete.

Late last month, news broke that because of financial woes and missed payments, the shipbuilding company had found a new company to take over the vessel’s construction contract: an Indian firm that is also planning to engage in deep-sea mining explorations on behalf of the Indian government.

Fujian Mawei Shipbuilding announced that the vessel had indeed been sold to the Indian firm, MDL Energy, although Nautilus reportedly thought negotiations were still ongoing. There are reports that Nautilus is attempting to seek new investment so it can reclaim the vessel, but the Chinese shipbuilder maintains that the ship has already been sold.

Mongabay attempted to contact representatives of Nautilus, but emails and telephone calls went unanswered. Nautilus’s interim CEO, John McCoach, told the Economist recently that specifics of the story, as mentioned above, were “not accurate from our perspective.”

Residents of New Ireland province, which lies in the northeast of Papua New Guinea, feared Nautilus’ deep sea mining project could have impacts on coastal marine life. Image courtesy of Google Maps.

It’s not clear how Nautilus will proceed from here, though it appears almost impossible that it will be able to build another tailor-made vessel from scratch, given the firm’s current financial situation. On Dec. 14, the company announced it had received a new loan worth $455,000; the unpaid installment on the PSV exceeded $18 million.

“Given Nautilus’ dire financial circumstances, it is fair to say the game is over,” Helen Rosenbaum, of the Deep Sea Mining Campaign, the author of a major report critical of the project, recently told local media. “The people of the Bismarck Sea of Papua New Guinea have hopefully been spared an environmental disaster.”

“It will be good news for my people if Nautilus goes bankrupt, instead of bankrupting our sea. We will fight this project to the very end,” Jonathan Mesulam, from the Alliance of Solwara Warriors, a community-based organization that opposes the project, said in a press release.

The Solwara 1 project planned to harvest mineral deposits found near seabed hot springs, or hydrothermal vents. Doing so, opponents said, could have had grave effects on rare deep-sea ecosystems.

Nautilus commissioned several environmental impact studies before it was granted the mining license in 2011. “The overall conclusion is that Solwara 1 has the potential for far fewer social and environmental impacts than the existing terrestrial mines examined,” reads one report it commissioned, written by U.S.-based consultancy Earth Economics.

Opponents of the project dismissed these studies as unsatisfactory and misleading, warning that since the Solwara 1 project was the first of its kind and would rely on as-yet-untested technology, it was too soon to say that it would definitely be safer than onshore mining. Moreover, they said the project would almost certainly destroy thousands of hydrothermal vents, each of which is host to complex ecosystems — and possibly species not yet identified by scientists.

Others critics warned that because the proposed extraction site lies only about 30 kilometers (18 miles) from the mainland, it could affect coastal ecosystems and, by extension, the livelihoods of fishing communities on Papua New Guinea.

While the likely demise of Solwara 1 is considered a victory by environmentalists and some residents of Papua New Guinea, the financial problems facing Nautilus are far from advantageous for the poor Pacific nation.

Arnold Amet, a former attorney general, said in a recent press release that because his country had purchased a 15 percent stake in the venture, it would also be responsible for 15 percent of payments to creditors if Nautilus went bankrupt. “I have been warning our Government publicly and privately about the financial mess they will find themselves in when this experimental company fails,” he said.

It’s not clear whether Papua New Guinea will manage to escape this financial burden. Opponents of the project say the government should now annul the concession and cancel all of Nautilus’s permits. But this may not be the end of the region’s underwater mining saga.

DeepGreen, a new deep-sea mining venture founded by Gerard Barron, an Australian entrepreneur who was also the first financial backer of Nautilus (he sold his shares in 2007), is reportedly exploring mining possibilities off the shores of Nauru, a nearby Pacific island. Unlike Nautilus, DeepGreen aims to mine materials from the ocean shore by simply hoovering it up, rather than digging into volcanic rock, ostensibly a less environmentally harmful method of extraction. If Nautilus is unable to fulfill its concession in PNG, then it is possible DeepGreen will fill Nautilus’ shoes as the pioneer of deep sea mining in the South Pacific.

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Nautilus deep sea mining plans in doubt over vessel conflict

mining vessel

Ewen Hosie | Australian Mining | December 12, 2018

Nautilus Minerals’ production support vessel (PSV) has been acquired by Indian company MDL Energy in a blow to Nautilus’ deep-sea mining plans.

The in-construction PSV is a cornerstone of the Canadian company’s plans for its Solwara 1 deep sea mining project in Papua New Guinea.

The Solwara 1 project is an underwater mining project using heavy vehicles called seafloor production tools (SPTs) for sulphide extraction (primarily gold, silver and copper) from the Bismarck Sea, offshore Papua New Guinea.

The PSV is primarily designed to support Nautilus’ mining operations by collecting the extracted materials at the water’s surface via pumps running up from the seabed.

In July 2018, the owner of the Chinese shipyard where the PSV is being built announced that it had rescinded its shipbuilding contract with Nautilus-contracted Marine Assets Corporation (MAC) due to the latter defaulting on its payments, throwing the vessel’s future into doubt.

On November 27, MDL subsidiary Ocean Energy Ventures (OEV) then released a public statement detailing its acquisition of the PSV alongside partner Quippo Oil and Gas.

OEV redubbed the vessel as the Amaya Explorer and stated that its discussions regarding the charter of the ship to Nautilus were terminated on October 5. OEV alleges that it instructed Nautilus to remove its equipment from the vessel in order for OEV to repurpose it.

“We are delighted to have concluded the contract for the purchase of Fujian Mawei hull MW301-1,” said MDL chief executive officer Kulpreet Sahni. “The vessel hull fits well with our future plans and we are excited about this first step on a new journey for us.”

Nautilus responded on December 2 explaining that it was discussing a loan extension facility with Deep Sea Mining Finance to enable the acquisition of the vessel but that there could be “no assurances that such discussions will be successful”.

Environmental campaign groups critical of the Solwara 1 project, such as Syndey-based Deep Sea Mining Campaign and Ottawa-based Mining Watch Canada, have subsequently responded to the news of Nautilus’ difficulties as a win for the Bismarck Sea and local communities in PNG.

“Nautilus’ Production Support Vessel was the centre piece of their model of operation,” said Deep Sea Mining Campaign coordinator Helen Rosenbaum.

“Without the PSV it’s difficult to see Nautilus ever developing its Solwara 1 project.  Given Nautilus’ dire financial circumstances it is fair to say the game is over.”

Nautilus has vociferously defended previous criticisms of the project’s environmental viability.

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