Nautilus/PNG continue talks

July 13, 2012 · 5:18 pm

Growing opposition to seabed mining

Patrick Matbob | Islands Business

Discussions between Nautilus Minerals and the state of PNG have failed to resolve a dispute that has halted the progress of experimental Solwara 1 seabed mining in PNG waters.

Nautilus has reported that a number of meetings have been held between senior representatives of the two parties and discussions would continue until a conclusion was reached.

Meanwhile, opposition to experimental seabed mining plans is growing in PNG and the Pacific region.

One of PNG’s vocal local environment group, Mas Kagin Tapani Association (known as Makata), has called on Nautilus to stop exploiting the pristine Bismarck and Solomon Seas with its experimental seabed mining. It has also called on the PNG state not to pay Nautilus the 30% equity which it was taking up in the project.

National coordinator for the local not-for-profit group Wenceslaus Magun said: “There is no justification for the PNG government to pay 30% to Nautilus.

“This foreign-owned corporation does not own the resources by birth right. They cannot ask the PNG government to make such a contribution to help develop their experimental seabed mining project.

“By doing so, would imply that Papua New Guineans will remain beggars on our own land: that we cannot determine our own destiny but allow outsiders, particularly the multi-billion dollar corporate industries, to dictate our future.”

The Canada-based Nautilus Minerals is in dispute with PNG as to the state’s obligations to complete the agreement reached in March last year for its Solwara 1 copper project.

Nautilus warned the dispute could delay or cancel the project which it is experimenting with in PNG waters. The company is the first to explore the ocean floor for polymetallic seafloor massive sulphide deposits.

PNG had exercised its option to acquire 30 percent of the Solwara 1 project, located in the Manus basin of Bismarck Sea. As part of the agreement, PNG has to pay its share of the development cost for the mine.

Nautilus said: “Unless and until the dispute is resolved, completion will be delayed or may not occur and Nautilus must continue to carry these costs”.

However, PNG says Nautilus has not met certain obligations on which completion is dependent and that it has breached the agreement. Nautilus, however, has refuted the assertions.

The dispute has resulted in a dramatic 40% plunge in Nautilus shares.

The company also suffered another blow when its partner—European ship builder Harrens—announced it will no longer be able to contribute its full part to the financing of the mining support vessel as agreed in April 2011.

Harrens’ decision is a reflection of the debt crisis in Europe and the tighter bank lending rules and also the depressed shipping market.

Local and regional environmental groups and advocates have continued to oppose the development of seabed mining.

Author of a recent report ‘Out of Our Depth: Mining the Ocean Floor in Papua New Guinea’ Dr Helen Rosenbaum said that very little was understood about the possible impacts of the Solwara 1 project.

“They say they’ve continued to do research that addressed a lot of the concerns that we addressed in that report. But every time we’ve gone back to them to say, well can you share this research with us, we’ve been unsuccessful. So we’re totally unconvinced that this research has been conducted.”

Dr Rosenbaum said the campaign’s concerns were similar for the many projects in which deep-sea mining exploration was starting throughout the Pacific.

Recent discoveries by scientists of the National Institute of Water and Atmospheric Research (NIWA) in New Zealand have shown that life was plentiful on the deep seabed despite arguments to the contrary.

The scientists have found more than 5000 samples and footage of never-before-seen undersea volcanoes after a three-week voyage in waters off  Bay of Plenty and north-east along the Kermadec Ridge.

The NIWA scientists studied four different undersea habitats-—seamounts, hydrothermal vents, continental slope and canyons within a 10,000-square kilometre area.

They found that life was plentiful on the seamounts, particularly around the hydrothermal vents. Little life was seen on the surface of the soft sediment on the seafloor of the canyons, but within the sediment were large numbers and many different types of worms.

Meanwhile, it’s been suggested that Pacific Islands Countries and territories wishing to make use of resources on the deep seafloor for economic returns must adopt a ‘precautionary approach’.

This can simply be interpreted as “in any development where there are threats of serious harm to the marine environment, the lack of full scientific data shall not be used as a reason for postponing that development,” said Dr Russell Howorth, director of the SOPAC Division of the Secretariat of the Pacific Community (SPC).

But, that particular development, he added should use cost-effective measures to prevent environmental degradation.

The ‘precautionary approach’ has been in existence in Rio Declaration Principle 15 for 20 years but hardly used in the context of bringing economic benefits of the resources of Pacific islanders to improve their livelihoods, said Dr Howorth while addressing Oceans Day at the Rio+20 conference  in Rio de Janeiro last month.

Under Principle 15 of the Rio Declaration on Environment and Development (1992), the application of the Precautionary Approach is defined as: “In order to protect the environment, the precautionary approach shall be widely applied by states according to their capabilities.

“Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.”

Dr Howorth also revealed a ground breaking advisory opinion by the International Tribunal of the Law of the Sea Seabed Disputes Chamber which ruled that the precautionary approach is a legal requirement for states sponsoring deep sea mining activities.