Nautilus drops gas deal

 CANADIAN company Nautilus Minerals has terminated its deal with the government after the state failed to pay K285.71 million (US$118 million) for its share in the Solwara 1 project.

The deep sea miner won an arbitration case against the government last year.

But the state has so far refused to pay the funds owed to complete its 30% stake in the copper-gold project in the Bismarck Sea.

In a statement, Nautilus said: “The company announces that contrary to the arbitrator’s award of Oct 2, the independent state of Papua New Guinea has not completed the purchase of its 30% interest in the Solwara 1 project. 

“In accordance with the state equity option agreement (SOEA) signed by the parties in March 2011, Nautilus has terminated the agreement and will now claim damages.”

An official from Nautilus Minerals PNG office said: “Despite ongoing dialogue with the state aimed at achieving an amicable resolution to the issues, Nautilus believed the avenues for achieving such a resolution within the timeframe that Nautilus could reasonably continue to carry a share of the development costs for the project on behalf of the State were exhausted.

“Termination of the SOEA was therefore an appropriate decision to ensure that Nautilus, with the support of its major shareholders, is free to execute its plan of becoming the world’s first producer of deep sea metallic resources without the ongoing uncertainty created by the agreement, and the State’s continued non-performance.

“The mining lease and the environment permit remain valid in PNG. 

“We have received significant support from the state at both ministerial and bureaucratic levels and continue to have strong community support.  

 “We will continue to work with the government to ensure Solwara 1 and seafloor mining become a reality for the people of West New Ireland.”