AUSSIE COMPANY TO TEST FOR UNDERSEA MINERALS OFF MANUS

By Robert Keith-Reid

Islands Business Magazine

SUVA, Fiji (September) - Another step towards the initiation of commercial seabed mining in the Pacific Islands region will be made next year when Nautilus Minerals, an Australian-backed company, plans to begin test drilling for copper, zinc and gold, south of Manus Island in Papua New Guinea.

Nautilus hopes to eventually add to its 2,500 square kilometers of Papua New Guinea's ocean floor tenements a 44 square kilometers patch of ocean floor in northern Fiji and a 44,000 square kilometers group of tenements in Tonga. Chief executive David Heydon says the exploratory work in two PNG tenements will be the "most sophisticated exploration program in the Pacific for massive sulphides and the most extensive drilling program for such resources in the world."

Nautilus' targets are mounds of mineral-enriched fallout around volcanic vents in the seabed known as "black smokers." These have been detected on the Pacific's ocean bed and in some other parts of the world in the last 15-20 years.

Heydon says if the results from the PNG exploration warranted it, they could lead to an estimated US$308 million investment in mining copper concentrate in the Pacific.

There is a perception that seabed mining is far more costly that land mines, he says.

One hundred and fifty five thousand tons of copper concentrate can be landed 30 percent cheaper than the cost of an equivalent sized land mine in the Andes Mountains in South America.

Worley, the project manager and Australia's largest engineering offshore oil/gas and mining specialists, estimates that Nautilus could produce copper for 39 cents per pound, he says.

Seventy-five percent of copper producers have higher costs and the current copper price is a very low 72 cents per pound. Return on capital is estimated to be about 25 percent. There is not one zinc mine making money at present because world metal prices are extremely low, but our project still shows a 20 percent return.

Heydon says Nautilus is now backed by an alliance of more than half a dozen important companies who regard offshore mining as the next big business sector for them as oil and gas seabed ventures mature.

He says Nautilus can't begin operating in Fiji until after May 2005, since under a three-year seabed research agreement signed with the South Pacific Applied Geoscience Commission (SOPAC), Japan has exclusive rights to work in Fiji and some Micronesian areas.

If Nautilus can obtain positive assurance for the Fiji and Tongan authorities that it will be granted tenement areas sought by it, the cost of work in them can be factored into the PNG project, he says. Tonga is expected to deal with the company's application in September. If the application is approved, the company is expected to begin work in 2004. Nautilus secured the PNG tenements four years ago and recently had them enlarged.

Japanese ocean bed survey ships have worked on the ramifications of the formation of mineral-enriched seabed deposits.

"Nautilus has several tons of samples recovered by a Russian ship from the North Fiji Basin, the area the company is interested in. They are now in Austria for tests to assess how their drilling and grinding qualities should influence the design of mining equipment."

Last year the company worked on engineering studies to determine the economics, capital and operating costs of seabed mining.

While marine researchers have collected important data about seabed minerals, "I believe we are the first to take this commercial approach and do such a detailed engineer study," Heydon says.

Despite the extent of pure science research "we believe that to date no such commercial exploration has been conducted for sea floor massive sulphides." The company is interested only in "dead" mounds, not in those that are still venting minerals and thus are too hot and immature for mining.

Heydon says they are quite different in nature from the much-publicized seabed fields of manganese nodules like those detected in the Cook Islands waters.

The company envisages mining mounds of not less than a football field size, about 200 by 200 meters, and mined to a depth of 20 meters in ocean depths of 2300 meters.

"The Cooks have been given precipitate expectations," Heydon says. "The manganese is only in a 40 millimeters thick crust. If you mined this, you dig at least 10 mm deeper in barren rock so that you would dilute the (mineral) content by 25 percent."

Korea, Japan, India and Russia are exploring manganese nodule prospects in international waters but "are so far behind, it is an exercise in science for science's sake."

Heydon says New Zealand recently authorized another exploration company, Neptune, to work in an area towards Tonga.

The Nautilus technique would be to anchor a converted oil-drilling platform over a mound, one of a cluster. A cutting machine the size of a D11 bulldozer would be lowered to the seabed and operated by remote control. Mine slurry would be pumped up to a suspended 100-tonne bucket and when fully loaded this would be drawn to the surface to have its contents discharged to a bulk carrier for delivery to a shore processing plant. "We aim for two million tons of ore a year, 400 tons an hour or two cubic meters a minute dug with two machines for 5500 hours at 90 percent efficiency. Our first targets are copper and zinc. Gold values in Fiji and Tonga are not as high as PNG values. There will be no environmental hazard since seabed mining has none of the hazards of land mining," Heydon says. "We would be working in such small dead areas. Any spill from the bucket will fall to where it came from. Any marine life disturbed will be replicated in the area immediately beyond it."

Heydon says it is frustrating to be excluded from the Fiji and Tonga areas until 2005 by the exclusivity of the Japanese license.

Nautilus policy will be the opposite, he says. The company intends to fully cooperate with marine scientists and share its data with them. In 2004, Dr Wolfgang Bach of the Woods Hole Oceanic Institute in the United States plans to operate a submersible in the company's East Manus tenement. The companies in the Nautilus alliance are:

"All these guys see it as the next growth sector for them. This is why they are backing us. Everyone is going to want us to succeed."

September 4, 2003

Islands Business: http://www.pacificislands.cc/pm82003/index.php

 

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