Australian miner looks to sea floor

Australian miner looks to sea floor

by Leora Moldofsky in Sydney (Financial Times)

19th January 2006

As demand rises for raw materials, companies are digging deeper underground or higher in the mountains to secure supplies. Now an Australian miner has identified another potential source of mineral-rich deposits - 2,000 metres underwater.

In 1997, Papua New Guinea granted Nautilus Minerals exploration licences for seven offshore tenements, a world first, after research scientists identified mineral-rich zones along its coastline. Produced by hydrothermal vents, the volcanic deposits are thought to contain high concentrations of metals including copper and gold.

The Sydney-based company is currently conducting a core drilling programme on PNG seafloor deposits in association with US mining giant Placer Dome. Placer Dome is funding the tests in return for 75 per cent interest in any gold-rich deposits uncovered.

If the metal contents of the deposits are found to warrant commercial development, the mineral wealth of as much as 70 per cent of the earth's surface is potentially up for grabs, says David Heydon, managing director of Nautilus Minerals. "The world's miners are watching us," says Mr Heydon, who aims to release the test results by March.

As most of the deposits lie at depths at which oil and gas producers and telecommunications cable layers have been working for decades, Mr Heydon says the technology to exploit the seafloor is already at hand.

Environmentalists say ocean mining could devastate fragile ecosystems about which little is known. Mr Heydon says he is only interested in exploring inactive vents where the ecosystems are dead or dormant. Sam Akoitai, PNG's mining minister, says: "Any underwater mining will only be done through approved government procedures and to world-standard environmental requirements."