As first reported over at the tasty-sounding Southern Fried Science (does that come with a side of corn and buttermilk biscuits?), it seems that even Nautilus Minerals is not immune to a sour economy.In a news release dated December 17, Nautilus announced it had decided to adopt a more cautious strategy by delaying the construction of the equipment for the Solwara 1 mining system. Is that code for nervous investors jumping ship on an untested, unproven, and potentially environmentally disastrous mining process? The press release goes on to explain that to preserve capital, Nautilus contracts and purchase orders will be suspended or terminated depending on their criticality (sic) to the revised development program. Most satisfying for me, their Mining Support Vessel agreement announced on June 20, 2008 is in the process of being terminated.
Regular readers will recall that I've been following Nautilus Minerals since they first announced plans to mine deep sea vent systems in the exclusive economic zone of Papua New Guinea. Craig McClain with Deep Sea News has also been following Nautilus' activities with interest.
Nautilus’s first major exploration site, the Solwara 1 Prospect, is located in the Bismarck Sea, 50 kilometers north of the active volcanic island of Rabaul and approximately 670 kilometers east of Madang. The Company also has a total of seven other named Solwara prospects throughout the Bismarck Sea, 33 total tenements, and 57 applications for exploration. Nautilus had planned to begin development and construction in Solwara 1 in 2009, and commence mining in late 2010. The Company estimated an average of two megatons of ore per year would be extracted by Nautilus in a singe strip mining operation.
And speaking of criticality, the global biodiversity conservation community still awaits a full environmental impact study from Nautilus for any potential damage resulting from an unprecedented deep sea vent mining operation. Perhaps a delay while Nautilus awaits a more solid financial landscape will encourage them time to answer many environmental safety questions regarding their operation.
2 comments:
Nautilus Minerals has pubished our Environmental Impact Assessment on our website www.cares.nautilusminerals.com. The study is a result of 2.5 years of scientific work that includes studies by many of the world's leading ocean science acedemic institutions.
Scott...
I won't refute the intellectual pedigree of scientists and institutions Nautilus has bankrolled to conduct it's EIS.
But I might suggest that academic institutions and career academics have somewhat different motivations and standards for acceptable risk than do biodiversity conservation organizations.
Internationally respected scientist and conservationist Rud Fujita with Environmental Defense Fund (and others) continue to voice their concern and caution with unproven deep sea mining.
I echo these precautionary concerns related to the potential environmental damage. My colleague Craig McClain has also expressed his own concerns on environmental risks.
My concerns are also focused on the minute compensation the people of Papua New Guinea are receiving relative to the profit Nautilus and your investors will be banking once mining kicks into full production. Sadly, I suspect and fear Nautilus will join the long list of foreign corporations who extract PNGs finite natural resources, reap profit, while PNGs people continue to scratch away a subsistence lifestyle.
I note in the EIS Executive Summary that Nautilus makes a point (numerous times) of supporting it's confidence in legality of process and overall fair play for PNG citizens on Papua New Guinea's Mining Act of 1992, the principal policy and regulatory document governing the mining industry in PNG.
Perhaps you are unaware of a somewhat conveniently forgotten meeting that occurred in February, 1999, in Madang, PNG: The Offshore Mineral Policy Workshop. Attended by over 50 government officials, resource managers, traditional resource owners, scientists, conservationists, and mining/exploration representatives from PNG, Tonga, Fiji, the Solomon's, Japan, and the USA, the gathering was the result of a consensus opinion that the Mining Act of 1992 was not adequate to deal with mineral development in the offshore area.
The Policy Workshop delivered several key recommendations in considering deep sea mining. Key recommendations I find lacking in Nautilus' EIS analysis include:
Involvement of coastal states in a proactive manner in all significant decision making activities related to environmental concerns associated with offshore mineral exploration and exploitation;
Ensuring the long term capability of coastal states to effectively monitor offshore mineral resources activities through relevant government representative participation in all at-sea phases of mining, exploration and evaluation;
Evidence of appropriate insurance sufficient to compensate coastal states in the event of environmental damage;
Appropriation or the creation of a special use fund to provide the coastal state's human and fiscal resources to carry out needed data collection and collation, monitoring and enforcement activities with respect to resource development in the offshore.
Finally, attendees of the Offshore Mineral Policy Workshop developed a Green Paper recommending to the PNG Parliament that:
1) The Nation develop a comprehensive ‘Offshore Mining Act’ as a distinct statute separate from the Mining Act 1992; and,
2) That the Government of Papua New Guinea, and where appropriate other coastal states, should consider the declaration of non-living resources, beyond the 3-mile limit of the Provincial coastlines, as a “Common Heritage of the Nation”.
Needless to say, the fact that your EIS lacks any of these important environmental and cultural concessions is evidence of how far the Green paper got in parliament. But just because PNG's legislature could not pass these critical amendments to their laws does not mean they are not needed.
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