Tag Archives: Solwara 1

Moratorium on deep sea mining in PNG welcomed

PACNEWS | 4 September 2019

Papua New Guinea Prime Minister, James Marape supported Fiji’s call at the Pacific Islands Forum for a 10-year moratorium on seabed mining.

The PM’s support for a moratorium was welcomed by the PNG Council of Churches at its meeting last week. However, the churches and civil society remind the Prime Minister that the environmental, social and economic risks of seabed mining necessitate a complete ban.

An open letter to PM Marape published in June from the PNG Council of Churches, Voice of Milne Bay, Alliance of Solwara Warriors, Bismarck Ramu Group, and the Center for Environmental Law and Community Rights seeks commitments to cancel all licences issued to Nautilus, to not issue any more sea bed mining exploration or mining licences, and to invest in truly sustainable local enterprises that will benefit local economies.

Jonathon Mesulam of the Alliance of Solwara Warriors said, “We thank our Prime Minister for heeding the calls of our communities by backing a 10-year moratorium on seabed mining. But we need to go further to protect our seas, our livelihoods and traditions by imposing a ban.”

Peter Bosip, Director, Center for Environmental Law and Community Rights claimed, “PNG’s recent history is littered with many examples of land-based mines with disastrous impacts. It is very difficult to monitor and regulate the impacts of land-based mining let alone mines deep under the sea. Globally, ocean ecosystems are already under stress due to pollution, plastics, overfishing, climate change and accelerating biodiversity loss.

“PNG has no need for seabed mining” stated Christina Tony of the Bismarck Ramu Group.  “We are blessed with abundant fisheries, productive agricultural lands and marine life. Seabed mining will benefit only a small number of people who are already wealthy and not bring prosperity to our communities.”

Nautilus is now approaching liquidation and PM Marape has described Solwara 1 as “a total failure”.  PNG’s investment in Nautilus has resulted in loss equivalent to one third of its last national health budget. The PNG Government through Eda Kopa (Solwara) Limited is attempting to recoup some of its financial loss through the Canadian courts. Smaller shareholders considering a class action are hoping to collaborate with Eda Kopa.

A new international report describes how Nautilus’ early investors pushed the PNG Government into purchasing a 15% share in its Solwara 1 project.  These investors increased the company’s share price with false promises of vast wealth and then walked away as multi-millionaires, leaving the company to flounder.

Sir Arnold Amet stated, “The approval of Solwara 1 occurred under my watch as an MP and Governor for Madang’. I regret that the O’Neill government didn’t adequately scrutinize that project and took up 15% equity in Nautilus PNG. It’s time to rectify that situation.

“Lets recognise this failed investment in the upcoming budget and ensure we don’t enter into seabed mining joint ventures in the future or issue any more seabed exploration or mining licences.  We now know how deep sea mining companies attempt to manipulate governments according to their own narrow profit motives without any conscience. We look to PM Marape to stand up for Papua New Guineans against the pressure exerted by these corporations,” he said .

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Canada rejects State claim against Nautilus Minerals

Eda Kopa Claim Disallowed By Monitor

Matthew Vari | Post Courier | September 2, 2019

Nautilus Minerals Solwara 1 joint venture partner Eda Kopa Limited has had its claim of US$50.8 (K172.8) million disallowed by the British Columbia Supreme Court appointed monitor PricewaterhouseCoopers (PwC) Canada.

This presents a setback for the state owned investment under Kumul Minerals Holdings Limited, as it seeks the unearned contribution claim during the Nautilus Plan of compromise and arrangement process catered for under the Canadian Companies’ Creditors Arrangement Act (CCAA).

According to documents from the monitor’s (PwC’s) status update as of August 28 last week, it referred to its Monitor’s Fourth Report, dated August 9, which called for a need for resolution with respect to Eda Kopa’s claims and CCAA proceedings.

Where the monitor disallowed the claim on the basis that Eda Kopa’s claim is an equity claim, and that the agreements between Eda Kopa and the Nautilus Group do not support any such claim.

The report also stated that on July 31, Eda Kopa sought to dispute the monitor’s disallowance by submitting a Notice of Dispute, however, according to the monitor the notice did not provide any new information to the Nautilus Group or the Monitor, and, accordingly, neither saw any basis for withdrawing or amending the disallowance of Eda Kopa’s claim.

According to the monitor on August 6, it and Nautilus received notice Eda Kopa retained Canadian counsel and led for an appeal that is set for September 10 this month to hear Eda Kopa’s appeal of the disallowance of its claim.

A resolution to the matter is expected to be reached on or shortly after September 10.

According to the monitor’s update if a resolution cannot be achieved in both Eda Kopa’s claim through the CCAA process or its general relationship with Nautilus going forward then the plan will not be implemented resulting in no distribution to affected creditors as anticipated and the Nautilus group restructuring will fail.

The CCAA plan was approved early in August at a meeting of affected creditors along with an acquisition plan by its main lender Deep Sea Mining Finance Limited would take over a number of the 44 entities registered under the Nautilus Group in nine jurisdictions around the world.

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BSP still milking taxpayers for Solwara 1 loan

BSP profits at taxpayers expense for a loan that it should never have given.

If the Fleming had any conscience the bank would write off the loan

Fleming: Payments For Solwara Loan Made Since Day 1

Matthew Vari | Post Courier | 2 September 2019

Payments for the State’s loan from Bank South Pacific for its 15 per cent stake in the now defunct Solwara 1 project have been made since day one.

The K375 ($120) million bullet loan taken out by Kumul Minerals Holdings Limited subsidiary Eda Kopa in 2014 will fully mature in 2021 according to BSP Group CEO Robin Fleming.

Mr Fleming was referring to queries from stakeholders, at BSP’s half year presentation last week, if the bank was calling upon the State’s guarantee on the loan taken out for its equity in the project, which the bank has denied.

“There has been no call on the State, and Eda Kopa, the Solwara (1) loan is in the name of Eda Kopa. “It has an expiry date of 2021, but no guarantee has been called upon.

“All payments to BSP have been made since day one, the loan has been fully serviced and the manner which that loan was structured was that you have a borrower in the name of Eda Kopa Limited and co-underwritten or fully supported by the Independent State of PNG.

“In terms of the original approval of that facility, which doesn’t mature until 2021, all payments have been made whenever they are due,” Mr Fleming said.

He said discussions really are with Kumul Minerals who owns Eda Kopa to clean up their own balance sheet and possibly look to have it more directly with the Independent State of PNG which provides the guarantee.

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Marape Backs Moratorium, Leans Towards Ban On Experimental Seabed Mining

Matthew Vari | Post Courier | August 15, 2019

Prime Minister James Marape has indicated he will support a proposed regional moratorium on seabed mining, however, could not go as far as to say a ban outright would be needed.

In an interview with the Post-Courier at the opening ceremony of the Pacific Islands Forum on Tuesday, Mr Marape responded when asked in relation to Fiji’s stance on the matter, that he would support the move, making specific reference to what he described the Nautilus Solwara 1 project as “a total failure”.

During Fiji Prime Minister Frank Bainimarama’s opening remarks at the Sautalaga climate update meet on Monday, he informed leaders present of Fiji introducing its own climate change act, of which the country will push an ambitious proposal for both its national and a regional moratorium on seabed mining.

“I ask you all to join in this ambitious venture and also support a 10 year moratorium on seabed mining from 2020 to 2030 which would allow for a decade of proper scientific research of our economic zone and territorial waters,” Mr Bainimarama said.

Sentiments supported by James Marape regarding the proven viability of deep sea mining, which he said is not yet a proven concept. “As a nation we have lost over K300 million in a concept of deep sea mining.

“Until that deep sea mining technology is environmentally sound and takes care of our environment at the same time we mine it, then at this point in time, I support the call made by the Fijian Prime Minister, we just need to have the best technology available,” Mr Marape sternly said.

When asked if it could go as far as supporting a ban, the Prime Minister left this option out adding just as the moratorium aims to prove the viability- that process will prove “on a case by case basis going into the future”.

“If there is an opportunity for deep sea mining, so long as environmentally it is friendly and the harvest of resource is done in a sustainable manner then we can give considerations to this, but right now it is a show.

“We don’t have the luxury of that informed decisional research.

“This is because that technology is not proven anywhere and PNG we burnt almost K300 million in that Nautilus (Solwara) 1 project on a concept that someone told us it can work, but it is a concept that is a total failure as I speak,” the PM said.

Apart from 15 per cent state investment in the project, Kumul Mineral Holdings is also seeking redress for the unearned revenue to the tune of US$51 million (K173m).

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Fiji calls for sea-bed mining moratorium as Nautilus restructures

Nic Maclellan | Islands Business | August 13, 2019

Fiji Prime Minister Voreqe Bainimarama has again called for a 10-year moratorium on sea-bed mining, at a time that many Pacific island nations are preparing for new frontiers of resource exploitation in the marine environment.

Speaking in Tuvalu this week before the 50th Pacific Islands Forum, Prime Minister Bainimarama called on fellow Forum island states to “support a 10-year moratorium on seabed mining from 2020 to 2030, which would allow for a decade of proper scientific research of our economic zones and territorial waters.”

There is growing pressure from French, Canadian and US corporations to advance the deep-sea mining (DSM) agenda, as well as interest from the China Ocean Mineral Resources Research and Development Association. Just as energy corporations are looking towards deep-sea oil and gas reserves, companies are developing technology to exploit mineral ore deposits found on the ocean floor, including cobalt crusts, seafloor massive sulphides and ferromanganese nodules.

Fiji’s call for a moratorium comes as community groups across the region are campaigning against potential environmental hazards of deep-sea mining, especially to ecologically sensitive hydrothermal vents. A report from the Guam-based Blue Ocean Law argues:

“There is a general failure to incorporate sufficient environmental protections, as well as the norm of free, prior, and informed consent for indigenous peoples, who are most likely to be impacted by DSM. In the 21st century, and under well-established norms of international law, these omissions represent serious violations of international legal obligations.”

Bainimarama’s call comes the same week as major restructuring of the Nautilus Minerals corporation, which has been planning to commence mining off the coast of Papua New Guinea, under a world-first licence issued by the PNG government.

Fiji and oceans policy

In recent years, Fiji has taken a leading role in ocean policy at the United Nations, working with other Forum island countries through the Pacific Small Island Developing States (PSIDS) group.

In June 2017, Fiji and Sweden co-hosted the high-level UN Conference on the Oceans and Seas in New York. This conference issued a call for action, highlighting action on ocean acidification, plastics, and overfishing. UN Secretary General Antonio Guterres appointed former Fiji UN Ambassador Peter Thomson as the UN Special Envoy on the Ocean.

This global campaigning is also translating into domestic legislation. Speaking in Tuvalu this week, Prime Minister Bainimarama said: “In addition to playing a leadership role in the global Ocean Pathway, we are also developing a National Oceans Policy, under which Fiji plans to move to a 100 per cent sustainable managed Exclusive Economic Zone, with 30 per cent of this being earmarked as a marine protected area by no later than 2030.”

Under the Forum’s “Blue Pacific” agenda, island nations are seeking to draw the links between oceans and climate policy. Bainimarama noted that Fiji was working with the Republic of the Marshall Islands in the Pacific Blue Shipping Partnership to develop “a blended and innovative finance structure to support the decarbonisation of domestic marine transportation fleets and facilities in Fiji and across the region. This means replacing inter-island ships with more efficient hybrid ships, thereby reducing fuel costs and emissions.”

Pacific DSM initiatives

Under the provisions of the UN Convention of the Law of the Sea (UNCLOS), many Forum island countries with large EEZs have been in discussions with transnational corporations to partner in deep sea exploration for maritime resources. Under UNCLOS and the authority of the International Seabed Authority (ISA), developing countries can also partner with overseas corporations to licence exploration in “The Area”, international waters that include vast arrays of minerals in Pacific Ocean areas such as the Clarion-Clipperton zone.

Nauru has long been a champion of DSM – at last year’s Forum leaders’ meeting, Nauru President Baron Waqa hosted a side even with ISA Secretary General Michael Lodge and Samantha Smith, the former Head of Environment and Social Responsibility with the deep-sea mining corporation DeepGreen.

This new frontier has drawn in regional organisations, to address legal, technical and regulatory issues around DSM. Boundary limitation is a vital concern as Pacific nations seek to increase potential revenues from fisheries and seabed mining in their Exclusive Economic Zones (EEZs). From 2010-16, the European Union funded the Pacific Community (SPC) to develop model DSM legislation for Forum member states, with many civil society groups concerned this work was promoting rather than regulating DSM.

The SPC Maritime Boundaries Division has also been engaged in technical work to clarify borders between independent island states as well as with colonial powers like France and the United States (for example, Vanuatu and France have been involved in a decades-long dispute over Matthew and Hunter islands).

There are tensions between the administering powers and territorial governments over the control of seabed minerals in the remaining colonies in the region. With an EEZ of nearly 5 million square kilometres, ocean-floor resources could be vitally important for the newest Forum member, French Polynesia. However, as the French government moved to amend French Polynesia’s autonomy statue earlier this year, France’s constitutional court ruled that rare earths can be classified as “strategic metals”, which come under the control of the French State rather than the Government of French Polynesia.  

Independence leaders have long argued against the French State’s control of strategic metals, with former Senator for French Polynesia Richard Ariihau Tuheiava telling the UN Special Committee on Decolonisation in 2017: “We have continually emphasised the critical nature of the resource question as a core issue for our future development. Whether or not these resources are considered in Paris to be ‘strategic’ is irrelevant to the applicability of international legal decisions which place the ownership of natural resources with the people of the non-self-governing territories.”

Collapse of PNG initiative

Early initiatives to begin sea-bed mining in the Pacific have not come to fruition. This week’s set-back to a major project in Papua New Guinea provides a salutary warning about the complexity and potential costs of DSM.

Under a licence issued by the PNG government, Nautilus Minerals has long planned to mine seabed minerals beneath PNG’s Bismarck Sea. However, with widespread community resistance, falling share prices and the loss of a specialised support vessel, Nautilus constantly pushed out the date for commencement of mining.

In February this year, Nautilus filed for court protection from its creditors under the Canadian Companies’ Creditors Arrangement Act (CCAA), and the Canadian-based company was later delisted from the Toronto Stock Exchange. This week, major shareholders MB Holding and Metalloinvest have moved to take control of company assets at the expense of major creditors and smaller shareholders (The PNG Government holds 15 per cent equity in Nautilus’ PNG subsidiary and the Solwara 1 project through the company Eda Kopa).

The looming collapse of the Solwara seabed mining initiative has been welcomed by civil society groups in Papua New Guinea, which have been campaigning against potential adverse impacts on ocean ecology.

Jonathan Mesulam of PNG’s Alliance of Solwara Warriors stated:

“We rejoiced when the company filed for protection from creditors in Canada. Our opposition and our court action have helped push it to that point. Communities across Papua New Guinea want to see the nightmare of deep-sea mining removed from PNG waters. We will re-double our efforts to ensure that the new Nautilus will never operate at Solwara 1.”

Fiji’s call for a moratorium on DSM will be debated in the corridors at this week’s Pacific Islands Forum, but there’s a way to go before all Forum member countries are willing to delay action on the supposed ocean El Dorado.

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Nautilus emerges, barely alive and impotent: just can’t get that deep sea mining project up

The PNG Government applied to the Canadian Court unsuccessfully to regain some of its failed investment

Deep Sea Mining Campaign | 13 August 2019

In a court appointed meeting today in Canada the creditors of Nautilus Minerals voted to effectively liquidate the company.  The two main shareholders – MB Holding and Metalloinvest – have taken control of a very much shrunken Nautilus at the expense of major creditors and hundreds of hopeful small shareholders.

Nautilus, which has been seeking to start the Solwara 1 mine off the coast of Papua New Guinea, filed for court protection from its creditors under the Canadian Companies’ Creditors Arrangement Act (CCAA) in February 2019. With its court-appointed monitors, Price Waterhouse Cooper, Nautilus has given up trying to find possible buyers of its assets.

Andy Whitmore of the Deep Sea Mining Campaign said,

“This is effectively a ‘smash and grab’ raid by the two main shareholders. But the company is essentially worthless. Its equipment is tailored to the mining of deep sea hydrothermal vents which the world now agrees are too ecologically valuable to mine. Even other DSM companies such as DeepGreen suggest mining hydrothermal vents creates an unacceptably high level of environmental impact..

In addition to this, Nautilus still faces an ever-widening community opposition over its Solwara 1 mine.

Jonathan Mesulam of the Alliance of Solwara Warriors stated,

“We rejoiced when the company filed for protection from creditors in Canada. Our opposition and our court action have helped push it to that point. Communities across Papua New Guinean (PNG) want to see the nightmare of deep sea mining removed from PNG waters. We will re-double our efforts to ensure that the new Nautilus will never operate at Solwara 1.”

Andy Whitmore continued,

“Under the deal minor creditors will be fully repaid, while major ones will get 10% of what they are owed. The biggest loser is the PNG Government which held 15% equity in Nautilus PNG and the Solwara 1 project. It has been left stranded with a debt equivalent to one third of its annual health budget for country of 9 million people.” 

“The main shareholders through Deep Sea Mining Finance (DSMF) – the vehicle lending money to Nautilus – have swapped those debts for ownership of the company. While a cheap purchase, they end up owning very littleNautilus is a company with still no capital or support vessel to realise its deep sea mining ambitions. Also, because Nautilus was delisted from the Toronto Stock Exchange as part of the insolvency proceedings, the new Nautilus will now be a private company, and not open to the same level of scrutiny.” 

The PNG Government through its company Eda Kopa applied to the Canadian Court unsuccessfully to regain some of its failed investment. Smaller shareholders are considering a class action against the new company.

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Nautilus Minerals’ plans to mine the seafloor sink deeper

NAUTILUS HAS LEFT THE PAPUA NEW GUINEA GOVERNMENT FACING A DEBT EQUIVALENT TO ONE-THIRD OF THE COUNTRY’S ANNUAL HEALTH BUDGET FOR ITS 9 MILLION PEOPLE

Cecilia Jamasmie | Mining .com | August 13, 2019 

Struggling Nautilus Minerals, one of the world’s first companies to plan on mining the seafloor, will soon join a long list of companies that have failed at attempts to extract minerals in remote places, as its creditors have voted this week in favour of liquidating the company.

The Canadian firm, which tried for years to fully develop its Solwara 1 gold, copper and silver project off the coast of Papua Guinea, faced relentless community opposition, culminating in legal action and public appeals to the government.

Those issues, together with environmental concerns and the fact that the company lost its only production support vessel last year, eroded investors’ support, forcing Nautilus to delist from the Toronto Stock Stock Exchange in March.

Since then, the Vancouver-based firm’s assets, including equipment, intellectual property and mining leases, have been put up for sale through PricewaterhouseCoopers.

In the process, Nautilus has left the Papua New Guinea government, which still owns a 15% stake in the Solwara I project as well as equipment, facing a debt equivalent to one-third of the country’s annual health budget for its nine million people. 

“The company is essentially worthless. Its equipment is tailored to the mining of deep sea hydrothermal vents which the world now agrees are too ecologically valuable to mine,” Deep Sea Mining Campaign’s (DSMC) Andy Whitmore, said in a statement.

“Even other deep-sea mining companies such as DeepGreen suggest mining hydrothermal vents create an unacceptably high level of environmental impact,” Whitmore noted.

Unlike other seafloor mining companies, including Nautilus, DeepGreen doesn’t want to drill, blast or dig the bottom of the ocean. The explorer, also Canadian, plans instead to scoop up small metallic rocks located thousands of metres below the surface in the North Pacific Ocean.

The deep sea, more than half the world’s surface, contains more cobalt, nickel, copper, manganese and rare earth metals than all land reserves combined, according to the US Geological Survey.

Companies exploring or already developing projects to mine the seafloor argue the extraction of those deep-buried riches could help diversify the sources currently supplying metals needed for electronics and evolving green technologies, such as electric vehicles (EVs) and solar panels.

Not enough studies

Academics and scientists, including the DSMC  — a group of non-profit organizations and citizens from the Pacific Islands, Australia, Canada and the US — are concerned by the lack of research on the possible impacts of high seas mining. They fear the activity could devastate fragile ecosystems that are slow to recover in the highly pressurized darkness of the deep sea, as well as having effects on the wider ocean environment.

Last year, the European Parliament called for a ban on seabed mining until the environmental impacts and risks of disturbing unique deep-sea ecosystems are understood.

In the resolution, it also urged the European Commission to persuade member states to stop sponsoring and subsidizing licenses to explore and exploit the seabed in international waters, as well as within their own territories.

Shortly after, an international team of researchers published a set of criteria to help the International Seabed Authority (ISA), a UN body made up of 168 countries, protect biodiversity from deep-sea mining activities.

So far, it has granted 29 licences to governments and companies, authorizing them to explore in international waters.

Nautilus, however, has been the only company to go beyond the exploration stage for what was supposed to be the first polymetallic seabed mine.

More projects may be surfacing soon, as the ISA is expected to open up the high seas to mining.

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