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ISA and United Nations selling experimental seabed mining to Pacific island governments

A bulk-cutter designer for seabed mining

How can efforts to ’conserve and sustainably use the oceans’ be so seamlessly co-opted as a cover for efforts to promote the mining of the seabed?

Unfortunately international agencies like the UN are masters are such deceits and have no regard for the views of Pacific Island people who are vehemently opposed to the exploitation of the seabed…

Pacific small island developing states capacity building on deep seabed mining

International Seabed Mining | 7 February 2019

The International Seabed Authority (ISA) and the UN Department of Economic and Social Affairs (UNDESA) will hold a regional training and capacity building workshop for Pacific Small Island Developing States (P-SIDS) on deep seabed mining in Nuku’alofa, Kingdom of Tonga, from 12 to 14 February 2019. 

The workshop is being held as part of the joint ISA-UNDESA ‘Abyssal initiative for Blue Growth,’ one of the seven Voluntary Commitments made by ISA at the UN Ocean Conference in 2017 to advance implementation of Sustainable Development Goal 14 (SDG 14) to conserve and sustainably use the oceans, seas and marine resources  (#OceanAction16538).

High-level representatives from P-SIDS and experts in deep seabed mining and marine science will gather at the workshop to discuss the potential benefits [but not the potential impacts] of increased participation of P-SIDS in deep-sea related activities, and how to ensure that the people in the region will fully benefit from such activities. 

Held over three-days, the workshop will feature sessions on: the status of deep seabed mining activities in the Pacific; the roles and responsibilities of sponsoring States; the legal regime for marine scientific research and environmental management of resources. It is also envisaged that through this workshop, it will be possible to identify better the specific capacity-building needs of P-SIDS in regards to deep seabed mineral related activities.

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NO BANKROLL FOR DEEP SEA MINING EXPERIMENT

Deep Sea Mining Campaign | January 21, 2019

Nautilus Minerals has edged back from the brink of bankruptcy with an extension to the bridging loans provided by its two main shareholders Russian mining company Metalloinvest and Omani conglomerate MB Holding. They were due for repayment on Tuesday 8th January when Nautilus begged for a one week reprieve, hoping to raise USD 5 million to maintain a holding pattern while it sought a long term funding solution. Unable to attract a lender the floundering company has been thrown a temporary life line once more by its 2 shareholders in the form of a small USD 500,000 loan to be repaid on 8th February.

It looks like 2019 will herald the end of Nautilus’s long struggle with its Solwara 1 deep sea prospect in Papua New Guinea. The most recent in the string of bad news stories was the loss of their crucial production support vessel after payments stopped to the shipyard building it. Nautilus’s share price has been hovering around a historical low of CAN $0.05.

Andy Whitmore, of the Deep Sea Mining Campaign, said, “How long can Nautilus be kept on life support?  And what is the point of extending the loan by one month? The company has no start date penciled in, no operational capacity, and is in no position to repay its growing debt. The high level of opposition within PNG to Solwara 1 is another obstacle Nautilus is yet to address. It’s time to euthanize this company.”

Concerned about the impacts the Solwara 1 project will have on marine ecosystems and fisheries based livelihoods the Alliance of Solwara Warriors has brought legal proceedings to assess whether the Solwara 1  project was approved lawfully. Jonathan Mesulam from the Alliance of Solwara Warriors said, “My village is located in New Ireland province, only 25km from the proposed Solwara 1 project.  New Irelanders are now well informed of the potential impacts of Nautilus Minerals experimental seabed mining project. They are giving their undivided support to ensure the project is stopped at all cost.

Sir Arnold Amet, former Papua New Guinean Attorney General stated, “I have repeatedly warned our Government of the financial liabilities of holding a 15% stake in this experimental company. The wisest thing for the PNG Government to do now would be to cut its losses, learn from its very expensive mistake, and terminate the Solwara 1 operating licence. Nautilus clearly shows that deep sea mining is not financially, socially, or environmentally viable for PNG. Our Government should explore recouping its failed investment by suing Nautilus for breach of contract.“

Dr. Helen Rosenbaum, of the Deep Sea Mining Campaign, added: “This loan extension really changes nothing. The financial, ecological, and social risks associated with the Solwara 1 project continue. Local opposition will grow as long as this perilous project persists.”

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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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South Taranaki iwi Ngāti Ruanui angry at spying by Thompson & Clark during Trans-Tasman Resources mining application

Anti seabed mining protesters were spied on by agents acting for the Ministry of Business, Innovation and Employment

Laurie Stowell | New Zealand Herald | 27 December, 2018

Revelations that the Government used private investigators to spy on protesters opposing Trans-Tasman Resources’ (TTR) seabed mining application have provoked outrage.

And one the groups targeted, South Taranaki iwi Ngāti Ruanui, is calling for a review of New Zealand Petroleum and Minerals, the government body that manages oil, gas and minerals and issues permits for exploration.

A bombshell report last week, following an inquiry by the State Services Commission, laid bare Government monitoring of groups seen as “security threats”, often through the use of private investigation firm Thompson & Clark.

The security company was given the profiles and newsletters of groups opposing oil and gas exploration and ironsand mining, such as that sought by TTR – and Ngāti Ruanui was one of the main opponents.

“The report says we were monitored and the only other word for that is spying,” Te Rūnanga o Ngāti Ruanui chief executive Debbie Ngarewa-Packer said.

The iwi is making an Official Information Act request for more information and may make a formal complaint, referring to the spying as “corrupt practices”.

Ngarewa-Packer said the iwi was “outraged but unsurprised” to discover the Government had used private investigators to spy on them.

The 150-page State Services Commission report shows “issue-motivated groups” such as the Ngāti Ruanui iwi were treated as security threats by several government departments.

It says the Ministry of Business, Innovation and Employment (MBIE), which is responsible for NZ Petroleum and Minerals, breached its code of conduct by failing to maintain an appropriate level of objectivity and impartiality.

“MBIE’s management of its regulatory responsibilities in the petroleum and minerals area … showed evidence of poor regulatory practice.”

Ngāti Ruanui chief executive Debbie Ngarewa-Packer

The inquiry uncovered system-wide failings across the public service, including a pattern of behaviour where public servants developed inappropriately close relationships with Thompson & Clark.

The monitoring started during Helen Clark’s Labour Government, with one instance in 2002, but Ngarewa-Packer said it ramped up during the last National-led Government when Simon Bridges was Energy and Resources Minister.

In 2015 he put up the “largest ever” block offer for oil and gas exploration. New Zealand Petroleum and Minerals was making “a huge effort” to bring business into the country.

Asking for opposing groups to be “monitored” called into question every decision it has made during that period, Ngarewa-Packer said.

“It makes the Crown Minerals process look corrupt.”

She said MBIE’s poor regulatory practice and bias toward iwi and stakeholders meant the ironsands exploration process “was undermined from the start”.

“What we suspected for years has sadly been confirmed – not only have we been fighting poor practising industry but we’ve also been fighting the officials charged with providing an impartial process. New Zealanders need to trust that those at the forefront of our democratic process will have a neutral view, instead of lobbying for private industry interests.”

The South Taranaki tribe was one of a number of groups opposing the ironsand mining application by TTR. During the mining proposal hearings, its people felt their concerns were ignored and officials were biased.

“We feel like we are up against not just TTR, but the officials as well.”

It seemed paranoid at the time, but Ngarewa-Packer now believes that treatment was part of a prevailing behaviour and culture.

She called for a full review of NZ Petroleum and Minerals and full disclosure. “Taxpayers and iwi need assurance the Government can be trusted.”

State Services Commissioner Peter Hughes said last week that new standards would strengthen transparency and consistency across government agencies.

“Any decision to use surveillance requires careful judgment,” Hughes said. “It must be lawful, it must be proportionate, and it must be ethical.

“It is never acceptable for an agency to undertake targeted surveillance of a person just because they are lawfully exercising their democratic rights – including their right to freedom of expression, association and right to protest.

“That is an affront to democracy.”

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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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