Nautilus Minerals has entered a $US34 million agreement with lender Deep Sea Mining Finance for deep-sea mining development in Papua New Guinea, but continued local pressure continues to shake the project to its core.
|A Nautilus bulk cutter for deep sea mining. Image courtesy of ©Nautilus|
Nautilus Minerals, a Canada-based company primarily owned by Russian and Omani mining firms, is responsible for the Solwara 1 deep sea mining project in Papua New Guinea. The companies have been granted a charge over Nautilus’ 85 per cent interest in Solwara 1, subject to PNG governmental and third-party approvals.
Of the $US34 million figure, Nautilus has already received $US11.25 million as a bridge loan, with the remaining $US22.75 million to be advanced with a maturity date of 8 January 2019.
The loans are secured against the assets of the Company through a general security agreement granted by the company in favour of the lender, along with a pledge of all the shares held by the company in its subsidiary Nautilus Minerals Niugini (NMN).
As reported by The ASIA Miner in January of this year, the much publicised Solwara 1 project, which involves extensive deep seabed dredging using a seabed mining technique never used before in commercial operations to extract gold and copper deposits from 1.6km below the surface of the Bismarck Sea, has received some concern and criticism regarding its potential environmental effects.
In December last year, locals launched legal action against the PNG Government over the project, a move Nautilus chief executive officer Mike Johnston branded “a publicity stunt”.
The Centre for Environmental Law and Community Rights (CELCOR) in Port Moresby is representing the plaintiffs, who are seeking information on the legality of the mine’s approval – with the PNG Government believed to own a 15 per cent stake in the operations. Additionally, due to deficiencies in the Solwara 1 Environmental Impact Statement, the plaintiffs are seeking information that would help them to clearly understand the potential environmental, health and economic impacts of the project.
“Very little information about the Solwara 1 project has been disclosed by PNG Government or the project developer, Nautilus Minerals”, stated Peter Bosip, Executive Director, CELCOR.
The Environmental Defenders Office (EDO) NSW, who have partnered with CELCOR, called the proceedings “landmark”.
“This is a historic case, not just for Papua New Guinea but globally, as communities try to understand the legality and potential impacts of the world’s first commercial deep seabed mine,” said BJ Kim, international program manager at EDO NSW.
Adding to Nautilus’ frustrations is Anglo American’s exit from the Solwara 1 project.
The Deep Sea Mining Campaign has stated in a release that in advance of their London AGM in May this year, Anglo American had exclusively confirmed their break with Nautilus.
Dr Helen Rosenbaum, of the Deep Sea Mining Campaign said “We are pleased that Anglo American engaged with us and listened to the concerns of coastal and islands communities in Papua New Guinea, whose environment and way of life would be devastated by Nautilus’s proposed Solwara 1 mine.”
Dr Rosenbaum continued “Anglo’s decision to dump their minority stake in this controversial company was the only option consistent with their international commitments to sustainability, human rights, and environmental stewardship. Deep sea mining is financially and environmentally risky. The legitimacy of the Solwara 1 project has been questionable right from the outset with independent reviews highlighting significant flaws in the Solwara 1 Environmental Impact Statement.”
Legal action launched by Papua New Guinean communities will also answer questions about whether the Solwara 1 project was lawfully approved. In the meantime, local communities have turned out in force at formal hearings held in PNG’s New Ireland Province to object to the extension of Nautilus exploration licences.