Controversial Nautilus Deepsea Mining Project Approved In PNG

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Mining hoped to inject almost $950 million into national economy

By Gorethy Kenneth

PORT MORESBY, Papua New Guinea (PNG Post-Courier, Aug. 8, 2012) – The Papua New Guinea (PNG) Government has approved the world’s first commercial deep-sea mining project despite vehement objections based on real or perceived threats to marine life.

Canadian firm, Nautilus Minerals, has been granted a 20-year license by the PNG Government to commence the Solwara 1 project, the world’s first commercial deep sea mining operation.

This is an impact project estimated to generate over 2 billion kina [US$948.6 million], that will most probably involve 15,000 local people in PNG, initially to organize and participate in workshops on the project’s impacts on the environment and the people affected, including benefits from revenue flows and other spinoff benefits like employment.

Nautilus will mine an area 1.6 kilometers beneath the Bismarck Sea, 50 kilometers off the coast of the island of New Britain. The ore that will be extracted contains high-grade copper and gold.

The company estimates that the first phase of the mining, which will be over a period of 30 months, will realize US$142 million, over K290 million, in benefits to the PNG economy, with a plan to employ 70 percent of the project’s workforce from PNG within three years.

Recently, the PNG Government has come under fire for taking up a 30 percent equity stake in the project, which will require it to contribute about US$25 million, over K51 million, towards infrastructure costs, provoking accusations of a flagrant conflict of interest. In return, PNG will receive US$40.8 million (more than K80 million) in tax from a project estimated to generate US$1 billion (more than K2 billion) although revenue would be ‘a long way short of that’, along with a 30 percent return on what is still a highly experimental mining process, according to Nautilus Minerals CEO Steve Rogers.

In a statement released from United Kingdom and Canada, Nautilus Minerals announced that the "new frontier" in mining is set to be opened up by the underwater extraction of resources from the seabed off the coast of Papua New Guinea despite vehement objections from environmentalists and local activists.

The project is being carefully watched by other mining companies keen to exploit opportunities beneath the waves.

Deep Sea Mining (DSM) campaign, a coalition of groups opposing the PNG drilling, estimates that 1 million square kilometers of sea floor in the Asia-Pacific region is under exploration license. Nautilus alone has around 524,000 square kilometer under license, or pending licenses, in PNG, Tonga, New Zealand and Fiji.

"PNG is the guinea pig for deep-sea mining," says Helen Rosenbaum, the campaign’s coordinator. The mining companies are waiting in the wings ready to pile in. It’s a new frontier, which is a worrying development.

"The big question the locals are asking is: What are the risks? There is no certain answer to that, which should trigger a precautionary principle. But Nautilus has found a place so far away from people that they can get away with any impacts.

"They have picked an underfunded government without the regulation of developed countries that will have no way of monitoring this properly," she said.

The mining process will involve leveling underwater hydrothermal ‘chimneys’, which spew out vast amounts of minerals.

Sediment is then piped to a waiting vessel, which will separate the ore from the water before pumping the remaining liquid back to the seafloor.

Already a campaign report has been compiled, co-authored by a professor of zoology from the University of Oxford, which warns that underwater mining will decimate deep water organisms yet to be discovered by science, while sediment plumes could expose marine life to toxic metals that will work their way up the food chain to tuna, dolphins and even humans.

Local non-government organizations have already claimed that an environmental analysis by Nautilus failed to properly address the impact of the mining on ecosystems, nor explained any contingency plan in the event of a major accident.

Wenceslaus Magun, a PNG-based activist, has been vocal about the project, advocating that local fishing communities are concerned about the mining and are planning to challenge the exploration license.

"We are really concerned because the sea is the source of our spirituality and sustenance. The company has not explained to us the risks of deep sea mining. They haven’t responded to my requests for information," he said.

"The government has turned a blind eye to the concern of its own people. We are mobilizing people to raise funds to take this to court and to retract the Nautilus’ license."

But the company had defended the project, arguing that deep-sea mining is potentially far less damaging than land-based extraction.

Steve Rogers, the CEO of Nautilus, said the company had gone through a ‘rigorous’ study of environmental impacts over the past six years.

"This will be a relatively small footprint compared to a mine on land, on an area about the size of a dozen football pitches. We’ve sought out the best scientists in the world.

"We aren’t trying to pull the wool over anyone’s eyes," Mr. Rogers said.

"This isn’t in a fishing area and won’t impact coral. Even if it were in a fishing area, it won’t affect that upper area where the fish are."

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