Tag Archives: open cut strip mining

Seabed mining could destroy ecosystems

Relatively little is known about deep-sea ecosystems

University of Exeter | PHYS.ORG | January 22, 2018

Mining on the ocean floor could do irreversible damage to deep-sea ecosystems, says a new study of seabed mining proposals around the world.

The deep sea (depths below 200m) covers about half of the Earth’s surface and is home to a vast range of species.

Little is known about these environments, and researchers from the University of Exeter and Greenpeace say mining could have “long-lasting and unforeseen consequences”– not just at mining sites but also across much larger areas.

The study is the first to give a global overview of all current plans to mine the seabed, in both national and international waters, and looks at the potential impacts including physical destruction of seabed habitats, creation of large underwater plumes of sediment and the effects of chemical, noise and light pollution arising from mining operations.

“Our knowledge of these ecosystems is still limited, but we know they’re very sensitive,” said Dr. David Santillo, a marine biologist and senior Greenpeace scientist based at the University of Exeter.

“Recovery from man-made disturbance could take decades, centuries or even millennia, if these ecosystems recover at all.”

“As we learn more about deep sea ecosystems and the role of oceans in mitigating climate change, it seems wise to take precautions to avoid damage that could have long-lasting and unforeseen consequences.”

Despite the term “mining”, much seabed mining would involve extraction of minerals over very wide areas of the sea floor rather than digging down to any great depth, potentially leaving a vast ‘footprint’ on the deep-sea habitats in which these mineral deposits occur.

Rising demand for minerals and metals, including for use in new technology, has sparked renewed interest in seabed mining.

Some operations are already taking place, generally at relatively shallow depths near national coastlines.

The first commercial enterprise in deeper waters, expected to target mineral-rich sulphides at depths of 1.5-2km off Papua New Guinea, is scheduled to begin early in 2019.

Speaking about these plans last year, Sir David Attenborough said it was “tragic that humanity should just plough on with no regard for the consequences”.

The Exeter and Greenpeace research team say there are “many questions and uncertainties” around seabed mining, including legal issues and the difficulties of predicting the scale and extent of impacts in advance, and of monitoring and regulating mining activity once it takes place in the deep sea.

The paper says that alternatives to seabed mining have already been proposed, including substituting metals in short supply for more abundant minerals with similar properties, as well as more effective collection and recycling of components from disused products and wastes.

However, Dr. Santillo said demand for seabed mining would also diminish if humanity could cut overproduction and overconsumption of consumer goods.

“Rather than using human ingenuity to invent more and more consumer products that we don’t actually need, we could deploy it instead to build goods that last longer, are easier to repair and make better use of the limited natural resources we have,” he said.

“With the right approaches, we can avoid the need for seabed mining altogether and stop the ‘race to the bottom’.

“As governments prepare to set the rules and the first companies gear up to mine, now is the time to ask whether we just have to accept seabed mining, or should instead decide that the potential damage is just so great that we really need to find less destructive alternatives.”

The paper, published in the journal Frontiers in Marine Science, is titled “An overview of seabed mining including the current state of development, environmental impacts, and knowledge gaps.” It is an open-access publication accessible to readers anywhere in the world.

Advertisements

Leave a comment

Filed under Environmental impact, Pacific region, Papua New Guinea

Nautilus in crisis as another exec resigns

Adam Wright is jumping off the sinking Nautilus

Wright resigns from Nautilus

Cedric Patjole | Loop PNG | January 18, 2018

Nautilus Minerals vice president of PNG Operations, Adam Wright, has resigned. The Company announced last night that Wright’s resignation is effective as February 26th 2018.

CEO Mike Johnston said Wright played a significant role over the last three and a half years in the areas of project management, stakeholder and government engagement and corporate social responsibility.

“We would like to thank him for the valuable contributions he has made to Nautilus’ progress to date and wish him well in his future endeavours,” said Johnston.

Wright’s resignation comes at a time when the company is struggling to secure financing to fund its capital working requirements and the completion of its sea floor production system for the Solwara 1 project in PNG waters.

Wright’s resignation from Nautilus is the second to be announced in the last three weeks.

On December 27, 2017, Russel Debney resigned as chairman after a long stint with the company where he joined the Nautilus board in 2006.

The recent events surrounding the company have further raised domestic and international pressure by concerned groups and individuals, calling for the project to be stopped.

Former attorney-general, minister for justice and Madang governor, Sir Arnold Amet, has called on the government to terminate its partnership with Nautilus given the recent events.

The PNG Government owns a 15 percent stake in the Solwara 1 Project.

Leave a comment

Filed under Papua New Guinea

The writing is on the wall for Solwara 1

Former Attorney General of Papua New Guinea:

The writing is on the wall for Solwara 1 – PNG should withdraw its investment before it’s too late.

Deep Sea Mining Campaign | Scoop NZ | 17 January 2018

Amid financial strife and looming litigation, Sir Arnold Amet, former Papua New Guinean Attorney General and Minister for Justice advises the PNG Government to terminate its joint partnership agreement with Nautilus, recoup its 15% stake in the Solwara 1 deep sea mining project and decline to renew the licences for Solwara 1.

For Nautilus Minerals a miserable Christmas has just flowed into an unhappy new year. A series of gloomy end of year investor updates confirmed Nautilus is unable to raise the funds necessary to complete equipment for its Solwara 1 deep sea mining project.

Then came the final blow for 2017 – affected communities launched legal proceedings in a bid to obtain key documents that will reveal to them and all Papua New Guineans whether Solwara 1 was approved lawfully and what the true environmental, health and economic impacts of the project will be.

Shortly after, Company Chair Russell Debney resigned. This is in spite of his long association as a board member since the company listed on the stock exchange in 2006 and the chair of the company’s predecessors, Nautilus Minerals Niugini Limited and Nautilus Minerals Oceania Limited.

Due to the high-risk nature of the project, financiers have declined to bail the company out, suggesting the efforts of Nautilus’s two largest shareholders have been in vain. The best they have been able to come up with are bridging loans of USD 7 million to meet immediate needs whilst desperately hunting for another USD 350 million.

Sir Amet stated:

“Investors, financial institutions and even the former chair of Nautilus can see the writing on the wall for Solwara 1. By the company’s own admission the project is an experiment with unknown environmental and social consequences and uncertain profits. The past few months have really shown the extent to which financiers and our own communities in PNG reject this project.”

“This high-risk project is a foolhardy investment when our country has so many pressing needs. In order to acquire our 15% equity, the National Government obtained a loan in 2014 from the Bank of the South Pacific of almost PNG K400 million. It’s also likely that the Government has provided Nautilus with generous incentives, which would further limit the potential to raise revenue from this project.”

“This is irresponsible in the context of our country’s ever-increasing debt bill”, continued Sir Amet. There is little likelihood of a positive return from this project to the balance sheet of the economy. The recent bridging loans for the project are a drop in the ocean – only 1/50th of the total funds required. With an interest rate of at least 8% and a lucrative 5% cash commission going to a previous director of Nautilus, this loan represents yet another expensive debt burden for PNG – especially as the loan is secured against PNG’s equity.”

“These bridging loans are from existing Board directors through a new private investment company incorporated in the British Virgin Islands. Such financial structures are commonly known as ways for minimising tax. And because the loan is from a related party, there was no need to even consult the PNG Government as the minority equity holder. If we stay in this deal, it will be the people of PNG who will have to pay.”

“The best course of action now is for the PNG Government to terminate its joint venture agreement with Nautilus before our investment ends up sinking to the bottom of the ocean along with the company. In addition, Nautilus’s licences are renewed every 2 years. The environmental uncertainties surrounding this project call for the Government to decline renewal. Indeed, given the poor financial record of the company, the government should consider suing Nautilus for the recovery of the full K400 million investment as its 15% equity stake is now virtually worthless.”

1 Comment

Filed under Environmental impact, Financial returns, Mine construction, Papua New Guinea

Failing seabed miner Nautilus Minerals continues on life support

Nautilus Minerals remains in a critical financial state, able to survive only because of another short-term loan from its main shareholders…

Press Release | GlobeNewswire | Business Insider | January 11, 2018

Nautilus Minerals Inc. announces that it continues to arrange bridge loans from Deep Sea Mining Finance Ltd, which are expected to form part of a larger secured structured credit facility of up to US$34 million to be provided by the Lender to the Company.

In conjunction with initial advances under the bridge loans, the Company has issued to the Lender an additional 8,591,065 warrants of the Company, for a total of 11,812,714 share purchase warrants issued to the Lender to date. Each Warrant entitles the Lender to purchase one common share of the Company at a price of C$0.17 for a period of five years from the date of issuance of the Warrant.

The bridge loans, which the Company expects to be in the amount of up to US$7 million, will assist the Company’s immediate working capital requirements and facilitate payments required to continue the development of the Company’s seafloor production system to be first utilized at the Company’s Solwara 1 Project. The loans bear interest at 8% per annum, payable bi-annually in arrears with a one year maturity date.

The Company will be entitled to pre-pay each loan prior to maturity, by paying 108% of the outstanding principal of the loan plus accrued and unpaid interest. Each loan will be represented by a promissory note and will initially be secured against the assets of the Company through a general security agreement. The Lender may subsequently require the loan to be guaranteed by the Company’s material operating subsidiaries and secured against the assets of such subsidiaries.

There can be no assurance that the Company will be successful in concluding the larger credit facility transaction or that any further funding will be secured by the Company.

As previously disclosed, the Lender is a private company owned 50% by each of: (i) USM Finance Ltd, a wholly owned subsidiary of USM Holdings Ltd, an affiliate of Metalloinvest Holding (Cyprus) Limited; and (ii) Mawarid Offshore Mining Ltd., a wholly-owned subsidiary of MB Holding Company LLC. As the Lender is controlled by two insiders of the Company, the Lender is a “related party” of the Company and the loan transaction constitutes a “related party transaction” of the Company under MI 61-101 Protection of Minority Security Holders in Special Transactions. The transactions comprising the bridge loans and the Warrants will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101.

The Company did not file a material change report more than 21 days before the expected closing of this transaction, as the details of the transaction were not finalized until immediately prior to the closing and the Company wished to close the transaction as soon as practicable for sound business reasons.

The Company requires significant additional funding in order to complete the build and deployment of the seafloor production system to be utilized at the Solwara 1 Project by the Company and its joint venture partner (as to 15%), the Independent State of Papua New Guinea’s nominee.

There can be no assurances that the Company will be successful in securing the necessary additional financing transactions within the required time or at all. Failure to secure the necessary financing may result in the Company undergoing various transactions including, without limitation, asset sales, joint ventures and capital restructurings.

The Company will provide further updates as circumstances warrant.

Leave a comment

Filed under Mine construction, Papua New Guinea

Nautilus chairman resigns

Russell Debney

PNG Industry News | 03 January 2018

NAUTILUS Minerals’ chairman Russell Debney has resigned as months-long talks to find funding for its controversial Solwara 1 project in Papua New Guinea have taken longer than expected. 

Debney stood down on December 27, seven days after the most recent funding deadline passed.

He had been chairman since June 1, 2016.

Nautilus announced it was actively seeking the appointment of an independent director to replace him.

The company initially reported in September that it required significant additional funding to complete the build and deployment of the seafloor production system that is to be used at its pending Solwara 1 project, located in the Bismarck Sea off the coast of New Ireland Province.

The most [recent] December funding deadline was the third since September the company had announced but failed to meet.

Concerns over the financing situation have affected investor confidence, with the company’s shares falling 38% since March 7.

Nautilus was granted its first mining lease at Solwara 1 in 2011. The deposit sits on the seafloor under about 1600m of water and contains a copper grade of about 7%.

1 Comment

Filed under Mine construction, Papua New Guinea

Deep-Sea Gold Miners Target PNG Coast

Underwater life

Locals fear for their environment despite promises of riches.

Luke Hunt | The Diplomat | December 27, 2017

Deep-sea mining is about to take an enormous step into the future. Off the coast of Papua New Guinea, in the Bismark Sea, the extraction of rich gold and copper deposits by a multinational group is promising high returns and they insist they are doing their best to allay environmental concerns.

But not everyone is convinced.

Court action has been launched amid claims the PNG government is withholding information about the multi-billion dollar project, Solwara 1 field, operated by Nautilus Minerals Inc, a Canadian-based company backed by Russian and Omani mining firms.

The Centre for Environmental Law and Community Rights in Port Moresby says there are serious issues with the mining operation and deployment of state-of-the-art heavy digging equipment about 1.6 kilometres below the surface. Locals say have not been consulted properly.

Renowned environmentalist and journalist David Attenborough has also opposed the project because thermal vents, where the deposits are often found, are a key source for the earliest signs of life on Earth. He fears they will be damaged and insists they should be protected.

In 2009, Nautilus was granted an environmental permit for the Solwara 1 field  – a volcanic area between the islands of New Britain and New Ireland – after the initial finds were made by Australian-based CSIRO in 1996. A mining license was granted two years later.

Seabed mining – which Nautilus described as the next big disruptive technology – is normally focused on areas around metallic nodules, also known as active or extinct hydrothermal vents, which carry valuable metal deposits.

The deposits are excavated and drawn to the surface in a slurry, the water is removed and the rock transferred and broken down for minerals like gold, copper and tellurium while the extracted water is discharged on the sea floor.

Tellurium is a key metal used in the making of high performance solar panels and its grades are up to 50,000 times more concentrated when dug from the sea-bed.

Its supporters also say that deep sea mining is an effective alternative to traditional mining on-land, which has proved destructive to the natural environment around the world.

“It makes sense to explore this untapped potential in an environmentally sustainable way, instead of continually looking at the fast depleting land resources of the planet to meet society’s rising needs,” Mike Johnston, Nautilus’s chief executive, recently told The Guardian.

But the area is rich in fish stocks and supports a lucrative tuna industry. Any damage to sea floor, scientists warn would have a detrimental impact on marine life in the area thus the Solwara field is increasingly being seen as a litmus test for an industry gearing up for the next big gold rush.

Critics also said the environmental impact assessment is insufficient as it does not include a “rigorous risk assessment” or an environmental management plan.

Like East Timor, PNG wants entry into ASEAN, a trade bloc that has done to little to protect its own environment against the forces of developers and corporates with much deeper pockets than the landowners whose real estate they’d like to monetize.

Rainforests in Vietnam, Cambodia, Laos and Thailand and the wildlife they houses have been devastated, the annual haze, caused by forest fires in Indonesia, is an international embarrassment, islands and river communities have been lost to sand dredging and fish stocks in the Mekong River and other major waterways are pitiful when compared with just 20 years ago.

And given the wealth of marine life and an abundance of seabed topography suitable for this type of mining around Southeast Asia — particularly in Indonesia and The Philippines — ASEAN must pay closer attention to this issue if a repeat of the ecological disasters of the past are to be avoided.

2 Comments

Filed under Environmental impact, Human rights, Papua New Guinea

Chan reaffirms stance against Solwara 1 project

Jemimah Sukbat | Loop PNG | December 24, 2017

The views of Governor Sir Julius Chan and the New Ireland Provincial Government have not changed, they have always been against the experimental seabed mining.

This was reaffirmed by NIPG after Loop PNG published an article questioning the governor’s stance.

In response, Loop PNG was told that the provincial government has been demanding that an independent environmental impact study be conducted and the findings be made known to NIPG.

“It will be worthwhile to note that the decision for Nautilus minerals to mine undersea had been made by the national government and as it is under the Mining Act, everything in the earth, in and above the sea belongs to the State,” clarified the government.

“Sir J recognises this and is working on amendments to the act, so mama and papa graun can be fully recognised as owners of these minerals.

“The amendments have gone before Parliament as a private member’s bill.”

NIPG further said as Nautilus is doing business in New Ireland waters using the road and land as access to its ships, etc, they have demanded that Nautilus give back to the community in projects, which it is doing on the west coast.

“Nautilus had so far shown good corporate responsibility but this is not enough to convince NIPG that seabed mining is safe.”

Meanwhile, non-governmental organisations have been advised to visit Sir Julius’ Kavieng office and dialogue with their government.

Leave a comment

Filed under Environmental impact, Human rights, Papua New Guinea