Nautilus gets nod for seafloor mining

Business, Main Stories

The National- Wednesday, January 19, 2011

 THE government has given the green light for what is hoped to be world’s first sea floor mining venture.

It has granted a 20-year mining lease to Canadian company, Nautilus Minerals, to mine gold and copper deposits in a 59km2 section of the Bismarck Sea, at depths of about 1,600m.

The Solwara1 one site, as it is known, is off the coast of New Ireland and about 50km north of Rabaul, Nautilus Minerals CEO Stephen Rogers told Radio Australia yesterday. 

In Toronto, Canada, Nautilus Minerals shares climbed 21% to $2.66 on Monday after the underwater miner reported that the government had granted Nautilus the lease for the development of the Solwara1 project in the Bismarck Sea.

Rogers told the Australian radio network that the site was expected to produce around 800,000 tonnes of copper and up to 200,000 ounces of gold a year. 

The PNG government now had one month to decide if it would exercise its option to take a stake in the project of anything up to 30%. 

Production is expected to begin in late 2013 or in 2014.

Rogers said it was an historic decision. 

“As this industry emerges, it is going to present a significant contribution to the PNG economy,” he added.

He said early this month Nautilus announced more drilling results from Solwara1 which showed a combined indicated and inferred resource of about 1.3 million tonnes a year.

“Any capital that we have to put into the project, going forward … the government would have to put up its 30% share. 

“Initially, it has an outlay of approximately US$20 million to US$25 million which represents the investment costs to date on the exploration, the environmental work and the development work, that has been carried out so far on the project,” he said.

Asked what sort of stake the government was considering, Rogers said: I wouldn’t like to second guess the government, but I am of the opinion that they will certainly participate.”

“As the project is offshore, you don’t have to deal with landowners. Does that mean PNG and its citizens will not get as much income from deep sea mining as it does from mining on land?

“Not at all. The same opportunities exist for people to participate in this project by providing services to the company, and in terms of the royalties going back into the country, they are exactly the same as any land-based mine. 

“So while we are not impacting people and having to move them from their homes, the general benefit back into the country is very similar.”