Nautilus minerals finally bankrupt, but is it still a threat?Published by MAC on 2019-11-26
Source: Statement, Mining.com, Arena
Is Nautilus still "lost at sea?" [see: Nautilus re-emerges battered and impotent]
Or is the debt-stricken company - the first to venture into experimental ocean-bed mining - conniving to outflank the citizens of Papua New Guinea, among others outraged at the prospect?
Nautilus Minerals still lost at sea with no life raft in sight
Deep Sea Mining Campaign press release
25 November 2019
On 21st November, Nautilus Mineral's court-appointed monitors, Price Waterhouse Cooper (PwC) confirmed that the relevant legal papers had been filed to assign Nautilus Minerals Inc. into bankruptcy.[i] Whilst this news was expected, there has been no news on their plans for the Solwara 1 deep sea mining project in Papua New Guinea, leaving local communities and civil society who are opposed to the project with many questions.
Nautilus filed for protection from its debts in a Canadian Court in February 2019.[ii] The company tried to restructure but it failed to find any buyers for its assets. In August 2019, court approval was obtained for creditors to liquidate the company in order to get back a fraction of what they were owed.[iii]
Andy Whitmore of the Deep Sea Mining Campaign stated, “This should be the end of the story, but sadly the liquidation was enacted to give birth to a new, smaller Nautilus.”
“The two main shareholders – MB Holding and Metalloinvest – have effectively taken control of this ‘new’ Nautilus at the expense of major creditors and hundreds of small shareholders. Despite filing an appeal[iv] in the Canadian Court, through its company Eda Kopa, the PNG Government remains the biggest loser from the deal holding 15% equity in Nautilus PNG and the Solwara 1 project, effectively losing $US125m.”[v]
“Nautilus gave the impression that the new company was ready to roll.[vi] But it has been over a month since the confirmation and there's been no other information on what Nautilus’ new plans will be.”
“Nautilus stated in court papers[vii] that, once liquidation occurs, there may still be a buyer for at least some of the new company's assets.[viii] Does this mean the major shareholders will sell their licences and machinery to make a quick profit and run?” questioned Mr Whitmore.
Local communities opposed to Nautilus' Solwara 1 project in their seas, are still steadfastly opposed to the project, and there are still legal cases in the PNG court system.[ix]
Jonathan Mesulam from the Alliance of Solwara Warriors has recently returned to PNG from meetings in Canada[x] where he represented the fierce opposition of PNG coastal communities against experimental seabed mining.
Mr Mesulam stated, “It’s unbelievable for Nautilus to still consider mining the Solwara 1 project. Even if free of its long-term debt, this new company is created on the back of the huge financial loss for our government and the people of PNG. Our people want nothing to do with this company and its lies of prosperity. In Canada I learned that such a project would never be allowed in this company's home waters.”
This loss adds to PNGs public debt which is at about 33 per cent of GDP. Australia has recently committed a $AUD300 million loan as direct budget assistance to ‘aid its economic reforms and government financing.’[xi]
Mr Mesulam continued, “A recent article in PNG Business News seems to suggest the ‘new’ Nautilus has applied to the PNG Mineral Resources Authority to vary the existing mining lease.[xii] This is against a background of calls from right across Papua New Guinean society to cancel the licenses.”[xiii]
An added mystery is that someone is still buying shares in the old, defunct company. When Nautilus was removed from the Toronto Stock Exchange as part of the bankruptcy proceedings, it moved to unregulated trading of the now virtually worthless stock. Yet there has been a recent spike in buying that sent the price up to 0.003 cents per share.[xiv]
“So many questions, and yet to date no answers. The company still looks to be lost at sea with no life raft in sight” claimed Mr Whitmore.
For more information
Andy Whitmore, Deep Sea Mining Campaign (London)
whit[at]gn.apc.org, +44 775 439 5597
Jonathan Mesulam, Alliance of Solwara Warriors, (Papua New Guinea)
mesulamjonathan[at]gmail.com, +675 7003 8933
[i] Updates, Nautilus Minerals, Canadian Companies’ Creditors Arrangement Act (CCAA), PwC, https://www.pwc.com/ca/en/services/insolvency-assignments/nautilus-minerals-inc.html
[ii] Updates, Nautilus Minerals, Canadian Companies’ Creditors Arrangement Act (CCAA), PwC,
[iii] ‘Nautilus obtains court approval of plan of compromise and arrangement’, Nautilus Minerals media release, 13 August 2019, http://www.nautilusminerals.com/irm/PDF/2096_0/
[iv] Eda Kopa filed an appeal in the Canadian Court, claiming they should be treated the same as other creditors, rather than as a shareholder, so at least they could salvage something. Nautilus fought this, complaining – among other arguments - that they could not afford to pay Eda Kopa. On 26th September the Court dismissed Eda Kopa's appeal, and on 22 October it was confirmed that no further appeal would be submitted.
[v] Deep Sea Mining Campaign, London Mining Network, Mining Watch Canada. 2019. Why the Rush? Seabed Mining in the Pacific Ocean. July. pp 26. http://www.deepseaminingoutofourdepth.org/wp-content/uploads/Why-the-Rush.pdf; Table 29 of the PNG Treasury Final budget outcome released in March 2019 indicates expenditure by sector - the debt of $US125m alone, ignoring interest and other costs. equates to K422m at March 2019 exchange rates, http://bit.ly/FinalBudgetOutcome2018
[vi] Monitors Sixth Report to Court, Nautilus Minerals, Canadian Companies’ Creditors Arrangement Act (CCAA), PwC, https://www.pwc.com/ca/en/car/nautilus-minerals/assets/nautilus-minerals-065_091919.pdf
[vii] Monitors Sixth Report to Court, Nautilus Minerals, Canadian Companies’ Creditors Arrangement Act (CCAA), PwC, (section 5) https://www.pwc.com/ca/en/car/nautilus-minerals/assets/nautilus-minerals-049_072419.pdf
[viii] The court papers also noted that Nautilus had two distinct business units, one dealing with polymetallic nodules, and one dealing with seafloor massive sulphides (which includes the Solwara 1 project in PNG). It is therefore unclear which, if either of the business units, the new company will concentrate on.
[ix] ‘Legal action launched over the Nautilus Solwara 1 Experimental Seabed Mine’, statement 6 December 2017 - http://www.deepseaminingoutofourdepth.org/legal-action-launched-over-nautilus-solwara-1/; ‘World-first mining case launched in PNG’, Lawyers Weekly, 13 December 2017, https://www.lawyersweekly.com.au/wig-chamber/22429-world-first-mining-case-launched-in-png
[x] Where Does Canada Stand on Deep Sea Mining?, MiningWatch Canada and Alliance of Solwara Warriors media release, 22 November 2019, https://miningwatch.ca/news/2019/11/22/where-does-canada-stand-deep-sea-mining; Briefing: Jonathan Mesulam Meets with Senior Canadian Civil Servants on Deep Sea Mining, Ottawa, Canada, 18 November 2019
[xi] ‘Australia Gives $300 Million Loan to Papua New Guinea’, Reuters, 23 November 2019, https://www.reuters.com/article/us-pacific-loan-australia/australia-gives-300-million-loan-to-papua-new-guinea-idUSKBN1XX03W
[xii] ‘Mine waits for restructure’, PNG Business News, 19 November 2019, https://www.pngbusinessnews.com/post/mine-waits-for-restructure
[xiii] ‘Joint Letter calling for the PNG Government to cancel all Nautilus Minerals deep sea mining licences’, full page ad, Post Courier by PNG Council of Churches, Voice of Milne Bay, Alliance of solwara Warriors, Bismarck Ramu Group and Centre for Environmental Law and Community Rights, 28 June 2019, http://www.deepseaminingoutofourdepth.org/joint-letter-calling-for-the-papua-new-guineagovernment-to-cancel-all-nautilus-minerals-deep-sea-mining-licences-and-to-ban-seabed-mining-in-png/; ‘Cancel all deep sea mining licences’, Loop PNG, April 24, 2019. http://www.looppng.com/business/cancel-all-deep-sea-mining-licences-locals-83822
Nautilus Minerals officially sinks, shares still trading
26 November 2019
Nautilus Minerals, one of the world’s first seafloor miners, officially went bankrupt this week, its court-appointed monitor, Price Waterhouse Cooper reported.
Nautilus filed for protection from its debts in a Canadian Court in February 2019. The company tried to restructure but it failed to find any buyers for its assets. In August 2019, court approval was obtained for creditors to liquidate the company to get back a fraction of what they were owed.
The Vancouver-based company was trying to develop its Solwara 1 deep sea gold, copper and silver project, off the coast of Papua New Guinea (PNG), but the project was plagued with community opposition and financial setbacks.
In June, the owner of the shipyard where the company’s support vessel was being made said it had cancelled the contract with the supplier chosen to build its ships after Nautilus failed to pay the third installment of the contract price — $18 million before interest.
Local communities opposed to Nautilus’ Solwara 1 project in their seas are still opposed to the project, and there are still legal cases in the PNG court system.
In the process, Nautilus has left the Papua New Guinea government, which still owns a 15% stake in the Solwara I project as well as equipment, facing K81.5 million ($24 million) in debt.
“The two main shareholders – MB Holding and Metalloinvest – have effectively taken control of this ‘new’ Nautilus at the expense of major creditors and hundreds of small shareholders,” Andy Whitmore, advocacy officer, Deep Sea Mining Campaign, said in a press release.
Court papers noted that Nautilus had two distinct business units, one dealing with polymetallic nodules, and one dealing with seafloor massive sulphides, which includes the Solwara 1 project in PNG. It is therefore unclear which, if either of the business units, the new company will concentrate on.
“Nautilus gave the impression that the new company was ready to roll. But it has been over a month since the confirmation and there’s been no other information on what Nautilus’ new plans will be,” Whitmore said.
Nautilus stated in court papers that once liquidation occurs, there may still be a buyer for at least some of the new company’s assets.
A PNG Business News report suggests the new Nautilus has applied to the PNG Mineral Resources Authority to vary the existing mining lease.
When Nautilus was removed from the Toronto Stock Exchange as part of the bankruptcy proceedings, it moved to unregulated trading, with a recent spike in buying.
At market close Tuesday, Nautilus Mineral’s shares had been traded 310,769 times on the OTC, with the stock priced at a penny.
Mining the Deep Sea: Stories for suckers, and corporate capture of the UN
by Catherine Coumans
Arena Magazine - https://arena.org.au/mining-the-deep-sea-by-catherine-coumans/
30 October 2019
When I mention that the global mining industry is eyeing the deep seabed as the next frontier in mining I am commonly met with gasps of disbelief and dismay. That gut reaction is often followed up with sensible exclamations about the fact that the world’s oceans are already overstressed by contaminants from human activity, such as plastics, and by overfishing, and, from those in the know, by acidification. Unsurprisingly, these apprehensions do not factor into the rapacious ambitions of industry pitchers for deep-sea mining, nor do they—another gasp of dismay—appear to temper the outright enthusiasm for this new form of mining shown by some highly placed officials in relevant UN bodies.
To overcome the aversion of a public already overwrought by reports of species loss, whales on the brink of extinction and the various horsemen of the climate apocalypse—drought, fires, floods, heat, sea-level rise, food insecurity and forced migrations—deep-sea mining’s frontier investors are surpassing themselves in the propaganda department. The front runner in this regard is a private Canadian company out of Vancouver called DeepGreen Metals Inc.
One of DeepGreen’s early promotional videos, DeepGreen—Metals for our Future, drives home lofty public messages that need to be critically interrogated: deep-sea mining is less environmentally and socially destructive than terrestrial mining; it is necessary in order to save the planet from climate change; and deep-sea mining, and indeed DeepGreen itself, come highly recommended, as both are enthusiastically promoted by the secretary-general of the UN’s International Seabed Authority (ISA). The private pitch of deep-sea-mining promoters is likely more focused on the bottom line: there is untapped wealth in them thar ocean depths for the savvy frontier investor ready to undertake an exciting new experimental mining adventure. DeepGreen’s CEO, Gerard Barron, concluded a sales pitch on the commercial and societal benefits of deep-sea mining in February 2019: ‘…whether you invest in a company like DeepGreen or not, everyone is a sucker for the story’.
DeepGreen’s focus is on polymetallic nodules found on the seabed in international waters of the Clarion-Clipperton Zone (CCZ) of the Pacific Ocean, an area covering some 4000 kilometres and roughly the size of the continental United States. These lumpy baseball-size nodes lie at depths of some 4000 to 6000 metres and contain primarily nickel, cobalt, copper, manganese and iron oxides. The two other targets for deep seabed mining are hydrothermal vents, typically found at depths of 1000 to 4000 metres, and cobalt-rich crusts, typically found on seamounts at depths of 800 to 2500 metres. Hydrothermal vents are believed to have hosted the earliest forms of life on earth and are famous for their abundant array of endemic species that feed on bacteria and other single-celled organisms that, remarkably, do not derive energy from photosynthesis but from the chemicals spewed out by the vents. The massive sulphide deposits built up around these vents contain copper, gold, silver, zinc and lead. Crusts that form on seamounts contain primarily cobalt and also manganese, iron, copper, nickel and platinum.
These geographic features of the deep sea are thrilling would-be miners, as the metals they contain are commonly more highly concentrated than on land, and advancing technology makes them potentially accessible for the first time. The feverish rush to lay claim to large swathes of the seafloor has all the hallmarks of the gold rush that once drew hordes of prospectors to the Wild West, including colourful claims of fabulous treasure lying ready for the reaping on the seafloor. Former UK prime minister David Cameron reportedly pledged to bring wealth from the seabed to the United Kingdom, claiming possible values of £40 billion over thirty years. Not to be outdone, The New Economy claimed that the industry ‘could be worth as much as $1trn to the US economy each year—the value of all the gold deposits alone on the seafloor is estimated to be around $150trn. It’s not hard to see why investors are getting excited’. Indeed, speculators are already making profits without a deep-sea spade in the ground.
To date, twenty-nine exploration licences have been granted in extraterritorial waters, called the Common Heritage of Mankind in UN speak. Granted by the ISA, which has jurisdiction over the seabed in this area, the licences cover some 1.5 million square kilometres in the southwestern Pacific alone (claims also exist in the Atlantic and Indian Oceans). The licences are held jointly by industrialised countries such as China, Korea, the United Kingdom, France, Germany and Russia, as well as small Pacific island countries such as Kiribati, Nauru, Tonga and the Cook Islands, and subsidiaries of corporations, such as Lockheed Martin (UK Seabed Resources), and Canada’s DeepGreen (Nauru Ocean Resources Inc.) and Nautilus Minerals Inc. (Tonga Offshore Mining Limited).
No exploitation, or mining, licence has yet been issued for any of these claims in extraterritorial waters: the ISA is still ironing out some details, such as novel governance regimes and brand-new environmental regulations. The first exploitation licence was issued for a project in territorial waters: the government of Papua New Guinea (PNG) granted Nautilus a mining licence in January 2011, but the company’s Solwara 1 project has already tanked. Faced with concerted, vocal and growing community opposition, and apparently insufficient ‘suckers’ for the Nautilus story, the company is now facing bankruptcy. The state of PNG is on the hook for about US$125 million, which it borrowed after Nautilus used arbitration to force the state to live up to its commitment to assume and finance a 15-per-cent stake in the venture. However, some early investors in Nautilus, such as Barron, made a profit: Barron ‘turned a $226,000 investment into $31 million’ in six years before exiting in 2007. It was the founder of Nautilus, David Heydon, who created DeepGreen in 2011 and brought Barron into that company as CEO.
Perhaps if hydrothermal vents and deep-sea nodules could serve solely as inspiration for speculative investing, all would not be so dire. But investors are applying intense pressure on the ISA to finalise the deep-sea-mining regulations, not simply to create another major bump in their investments—which of course it will do—but to open the door to putting massive mining machines onto the seafloor. The ISA has proved to be an all-too-willing and shadowy agency, as pointed out by the Deep Sea Mining Campaign, and Greenpeace:
The ISA has recently rejected the establishment of an environmental committee to better include environmental considerations in its functioning, and key environmental information is not public. Its Legal and Technical Commission meets mostly behind closed doors, and its composition is such that biological and ecological considerations are underrepresented.
So what is at stake? Each of the metal-rich geological features that are of interest to miners is slowly revealing itself to be an incredible ecosystem. In spite of existing at great depths, under immense pressure, in very cold water and in inky darkness, hydrothermal vents, polymetallic nodules and cobalt crusts host diverse, mostly undiscovered and scarcely studied creatures that have amazed the few humans who have seen them in their natural habitats. Hydrothermal vents and cobalt crusts host an abundance of organisms. Those on cobalt crusts have great diversity; many of these creatures are long lived but slow to reproduce and may exist only in certain areas. Those on hydrothermal vents are abundant, though thought to be less diverse, and are often unique to a particular vent. Polymetallic nodules host a wide variety of species, but they are spread more thinly; very few have been identified, but they are also thought to be long lived and slow growing. The habitats around hydrothermal vents are, according to deep-sea biologist Cindy Lee Van Dover, ‘relatively rare on the sea floor, and they’re different from one site to the next because the animals have adapted to the fluid chemistries’. The deep ocean expanses of polymetallic nodules are among the least-disturbed ecosystems on earth. Each of these geological phenomena of the deep sea have taken a very long time to form. Cobalt crusts grow at a rate of 1 to 6 millimetres per million years. Each polymetallic nodule, commonly between 5 and 10 centimetres in diameter, has grown by 2 or 3 centimetres every million years. Furthermore, as trillions of these baseball-size polymetallic nodules lie spread in a thin layer on the surface of abyssal plains, an extensive area would be disturbed if they were to be sucked up by the huge tread-wheel-driven machines envisioned for this task. While the chimney-like structures associated with hydrothermal vents can grow by 40 centimetres over five days, it is unknown whether vent species can recover once a vent chimney has been removed by mining.
While mining methods differ for each of these targeted geological features, deep-sea marine experts agree on the following points: crusts and nodules will take millions of years to reform; entire unusual species that we have never had a chance to study will be lost in the mining of all three types of ecosystem; and the dense sediment plumes that will be created as the seabed is disturbed and the pumping back down of process effluent will negatively impact and smother species over many more kilometres. Recent peer-reviewed papers by marine scientists have titles such as ‘Deep-Sea Mining With No Net Loss of Biodiversity—An Impossible Aim’ and conclusions such as ‘Seabed mining will cause irreparable damage to marine ecosystems’.
So, let us revisit the messages in DeepGreen’s Metals for our Future video. DeepGreen maintains that deep-sea mining is less environmentally and socially destructive than terrestrial mining. Nautilus tried the same spin, which the Deep Sea Mining Campaign adeptly refuted as Nautilus fought to counter vehement opposition to the Solwara 1 project by PNG coastal communities—these communities had already noticed a negative impact on their subsistence livelihoods and cultural practices related to marine species such as sharks as a result of Nautilus’ exploration activities offshore. While it is fascinating to see a new breed of would-be miners throw their terrestrial counterparts under the bus and expose the immense environmental and social harm done by mining on land, this is hardly an argument for opening up another entire ecosystem to exploitation by this rapacious industry, especially an ecosystem as immensely fragile and little understood as the deep sea. In fact, the comparison with terrestrial mining provides many arguments to show why deep-sea mining is a terrible idea, including, just as a start: it is much more challenging, technically and financially, to produce comprehensive baselines in the deep sea than it is on land; it is completely unclear how credible toxicity testing could be done in a deep-sea environment; independent scrutiny by communities, NGOs, independent scientists, media and so on would be much more limited; when things go wrong, such as spills, pipe breaks or unpredicted impacts, it would be much more difficult, nay impossible, to rehabilitate the unintentionally impacted area; modelling of the likely impact zones of toxic sediment plumes created by all forms of deep-sea mining is in its infancy; there is zero experience to draw on regarding impacts and mitigation at each step of the mining process; and the impacts of disturbances in the deep sea on critical food security, livelihood and commercial activity related to species such as tuna are not well understood.
DeepGreen maintains that mining the deep sea is necessary to avert the global climate crisis. Barron casts himself in the company’s video not as a mining CEO or a profit-seeking frontier investor but as a humanitarian eco-warrior, concluding, ‘it is a big responsibility on our shoulders’. The argument is simple: the green economy requires metals for such things as wind turbines, solar panels, and batteries for electric vehicles. While this is true, there is currently no global shortage of critical metals and minerals such as cobalt or lithium. Furthermore, technology is rapidly evolving to reduce or replace cobalt use, recycle lithium, develop urban mining of all kinds of waste products and even, according to experts, ‘biomining to extract rare earths from electronic wastes using microorganisms…use of sodium and magnesium in place of lithium, or alternative batteries based on graphene, hydrogen fuel cells, or even water and table salt. BNEF [Bloomberg New Energy Finance] has said new battery chemistries will probably shift to different source materials after 2030’. There are even reports of batteries using hemp rather than lithium-ion.
Finally, the DeepGreen video prominently features the secretary-general of the ISA, Michael Lodge. Lodge is on what appears to be a DeepGreen vessel, he wears a hard hat with the DeepGreen logo on it, and he both makes the case for deep-sea mining and discusses the ‘partnership’ DeepGreen has with the ISA. It is remarkable, and perhaps telling, that the head of this UN agency, which is tasked with environmental protection of the seabed in the Common Heritage of Mankind, and expects to soon become the regulator and issuer of mining licences for a whole new extractive industry, seems to be oblivious to the appearance of conflict of interest inherent in appearing in DeepGreen’s promotional video. Lodge has yet to respond to a recent report that raises concern about corporate capture of the ISA’s mining-code drafting processes.
It should be obvious that we cannot save the planet by continually expanding our exploitation of it and by trashing new, as yet unexploited ecosystems, such as those in the deep sea. It has taken time for communities and governments to become aware of the existential threat to our oceans, to global biodiversity and to life on earth posed by deep-sea mining. Within the last year the call for a ban or moratorium on the development of regulations by the ISA, and on the practice of deep-sea mining itself, has grown louder. The call is being made by NGOs and civil society organisations such as the Deep Sea Mining Campaign, the Deep Sea Conservation Coalition and Greenpeace, individuals such as Sir David Attenborough, and also by governments of Pacific island countries; even the European parliament has called for a moratorium on deep-sea mining.
Critical to the effort to protect the deep sea from mining is the need to review the role of the ISA in governing both the protection of the deep seabed as our ‘common heritage’ and its exploitation by for-profit corporations. This agency and its secretary-general have proven themselves to be deeply conflicted and captured by the corporations they are meant to regulate. It is time for a global treaty that will protect the entire international deep seabed from industrial exploitation.
Mining sets its sights on the deep seabed
28 November 2019
Dredging the ocean floor could supply cobalt for batteries – and threaten life on the abyssal plains
Since the influential book Mineral Resources of the Sea by J. L. Mero was published a half-century ago, governments and mining companies have dreamed of extracting untapped metal and mineral deposits from the sea floor.
Progress has been stuttering, but the technology is now sufficiently advanced that commercial scale deep sea mining is considered by many observers to be imminent.
A decade ago, deep sea mining exploration centred around prospects off Papua New Guinea, and the target was massive sulphide deposits rich in copper, gold, silver, and zinc, occurring around active or dormant hydrothermal vents. Now, geopolitical and economic forces have shifted attention to the Clarion-Clipperton Zone, a 4.5 million square kilometre swath of Pacific seafloor stretching between Hawaii and Mexico. This time the focus is on mining polymetallic nodules: billions of mineral-rich, potato-sized rocks littering the seafloor at depths of 3000 to 6000 meters.
“There’s a bunch of very valuable metals in polymetallic nodules,” says Andrew Thaler, CEO of the environmental consulting firm Blackbeard Biologic and adjunct professor at the Universities of Maryland and Delaware. “But the real driver of the industry is cobalt. We need cobalt in batteries and we need cobalt in smartphones.”
Last year, the International Energy Agency’s Global EV Outlook cautioned that skyrocketing demand for cobalt in electric vehicle batteries could lead to critical shortages of the element.
Polymetallic nodules are found on the abyssal plains – vast seafloor mudflats covering over half the earth’s surface – which, despite their bleak moniker and homogeneous appearance, support a phenomenal amount of life.
“I think it’s fair to say that the biodiversity, just on species count, rivals the tropical rainforest,” says Thaler.
The denizens of the abyssal plains are modest: worms, crustaceans, mollusks and microorganisms. Lacking the “big, sexy” appeal of ecosystems surrounding hydrothermal vents, Thaler says the plains are largely ignored in scientific literature.
“We’re not going to close any cobalt mines when we start mining the high seas.”
This knowledge gap means the biggest risk of mining polymetallic nodules is that almost nothing is known about the abyssal plains ecosystem. “Even doing a really basic risk assessment is tricky,” Thaler says.
Though it’s still theory, polymetallic nodules would be mined using remote-controlled machines resembling underwater bulldozers, each equipped with a vacuum-shovel attachment to suck nodules off the seafloor.
“These ecosystems take tens of millions of years to form, and so essentially, if you’re disturbing the seafloor under a nodule field, that’s gone for the rest of human history,” Thaler says.
The ore would be pumped up to a ship and processed, with waste tailings returned to the ocean floor – creating a sediment plume that could bury and smother organisms. As well, disturbing seafloor sediments could release unknown amounts of stored carbon, potentially making climate change worse.
According to a July Greenpeace report, In Deep Water, the combined risks pose “severe and potentially irreversible environmental harm, both at the mine site and beyond. The deep ocean’s biodiversity and ecosystem functioning is barely understood and robust mitigation is not possible.”
The Deep Sea Conservation Coalition, a group of over 80 non-governmental organizations, advocates extreme caution. Mining should not be permitted, they argue, without a strong regulatory framework and until sufficient scientific information is available to ensure effective conservation management plans can be put into place, including a network of marine protected areas and reserves.
“The question isn’t ‘can it be done and not disturb the environment?’ but rather, ‘is the ecosystem big enough that some extraction isn’t going to impact the overall health of the ecosystem?’ With the assumption that any extraction is going to be catastrophic to the local environment.”
The Greenpeace report also accuses the International Seabed Authority (ISA), the intergovernmental body tasked by the UN with regulating deep sea mining, of placing mining interests over marine protection.
The ISA denies the claim, but must balance a dual mandate to concurrently protect seafloor ecosystems and commercialize the seafloor.
“Even the ISA reps will acknowledge it’s a contradictory mandate they have to work within,” Thaler says. But because the ISA was formed under the United Nations Convention on the Law of the Sea, and its directives can’t be altered without altering that Convention, the ISA is “stuck with the management regime they’ve been dealt,” he says.
The ISA unveiled draft regulations for seafloor exploitation this summer that will be debated and finalized over the next several years.
Mining active hydrothermal vents should be off limits, says Thaler, with no way to mitigate risk to ecosystems. For polymetallic nodules, he says it’s a matter of scale: “The question isn’t ‘can it be done and not disturb the environment?’ but rather, ‘is the ecosystem big enough that some extraction isn’t going to impact the overall health of the ecosystem?’ With the assumption that any extraction is going to be catastrophic to the local environment.”
And while mining polymetallic nodules is widely seen as less damaging than land-based cobalt mining in places such as the Congo, “We’re not going to close any cobalt mines when we start mining the high seas,” Thaler says.
While the ISA controls regulations, the vagaries of commodities markets, extreme technical challenges, and social license ultimately dictate the future of deep sea mining.
Canadian mining company Nautilus Minerals learned this the hard way. With well-explored claims off the coast of Papua New Guinea, a decade ago they were predicted to be the world’s first commercial deep sea mining operation around this year. Nautilus is now insolvent and creditors are hashing out a plan to sell the company’s remains.
“Take all future prediction on the future of the industry with a grain of salt,” Thaler says. “It’s all incredibly volatile and incredibly experimental. But that said, we’re closer to being 10 years out now than we were 10 years ago.”
Collapse of PNG deep-sea mining venture sparks calls for moratorium
Papua New Guinea out of pocket $157m from failed attempt at mining material from deep-sea vents as opponents point to environmental risk
15 September 2019
The “total failure” of PNG’s controversial deep sea mining project Solwara 1 has spurred calls for a Pacific-wide moratorium on seabed mining for a decade.
The company behind Solwara 1, Nautilus, has gone into administration, with major creditors seeking a restructure to recoup hundreds of millions sunk into the controversial project.
The Solwara 1 project (Solwara is pidgin for ‘salt water’) planned to mine mineral-rich hydrothermal vents, formed by plumes of hot, acidic, mineral-rich water on the floor of the Bismarck Sea. But the project has met with fierce community resistance, legal challenges, and continued funding difficulties.
The PNG government sunk more than 375m Kina (AUD$157m) into the project, money it is attempting, but appears unlikely, to recoup. The project has been “a total failure” prime minister James Marape said.
Deepsea mining has proven contentious wherever it has been proposed and trialled across the world.
Proponents argue deep-sea mining could yield far superior ore to land mining – in silver, gold, copper, manganese, cobalt and zinc – with little, if any, waste product. The industry is potentially worth billions of dollars and could assist the transition to a renewable energy economy, supplying raw materials for key technologies such as batteries, computers and phones. Different mining methods exist, but most involve using converted terrestrial mining machinery to excavate materials from polymetallic nodules or hydrothermal vents on the sea floor, at depths of up to 6000 metres, then drawing a seawater slurry to ships on the surface. The slurry is then “de-watered” and transferred to another vessel for shipping. Extracted seawater is pumped back down and discharged close to the sea floor.
Environmental and legal groups have urged extreme caution, arguing there are potentially massive – and unknown – ramifications for the environment and for nearby communities, and that the global regulatory framework is not yet drafted, and currently deficient. Scientists argue deep sea biodiversity and ecosystems remain understudied and poorly understood, making it impossible to properly assess the potential impacts of mining - including disturbance of seafloor ecosystems; sediment displacement; and noise, vibration, and light pollution - and to establish adequate safeguards. Deepsea mining could worsen the global climate emergency, reducing the ocean’s ability to store carbon by disrupting seafloor sediments.
The Pacific has been seen as a region of immense deepsea mining potential, but some government leaders are now counselling against the rush to embrace seabed mining.
“I ask you all to… support a 10-year moratorium on seabed mining from 2020 to 2030 which would allow for a decade of proper scientific research of our economic zone and territorial waters,” Fiji president Frank Bainimarama told a climate ‘sautalaga’ – an open discussion – at the Pacific Islands Forum last month.
Charlot Salwai, Prime Minister of Vanuatu, supported Fiji’s call for a 10-year moratorium. Civil society organisations have consistently called for a moratorium on seabed mining “to prioritise the health of our communities and recognise values beyond economic gain”.
PNG had previously been one of deepsea mining’s firmest backers, but new prime minister James Marape has said he is wary of the technology, saying PNG had been “burned” by industry promises.
“Until that deep sea mining technology is environmentally sound and takes care of our environment at the same time we mine it, that, at this point in time, I support the call made by the Fijian prime minister,” he told the Post Courier.
“If there is an opportunity for deep-sea mining, so long as environmentally it is friendly and the harvest of resources is done in a sustainable manner then we can give considerations to this, but right now it is a show.
“The technology is not proven anywhere and PNG, we burnt almost 300 million Kina in that Nautilus [Solwara 1] project on a concept that someone told us can work, but is… a total failure.”
Jonathan Mesalum from the Alliance of Solwara Warriors, a community group which opposed the Solwara project, said a 10-year moratorium would be welcomed, “but we need to go further to protect our seas, our livelihoods and traditions by imposing a ban”.
He said while Nautilus’s project had collapsed, other companies might take control of the project’s licences and attempt to resurrect it.
“No one knows about the environmental impact: not scientists, not Nautilus, not the government, nor you or I,” Mesalum told The Guardian. “Our biggest fear is there might be interest from other mining companies who wish to continue the project.”
Nautilus developed and successfully tested three undersea robots designed to mine hydrothermal vents on the ocean floor, but funding for its production support vessel dried up midway through construction. Under a restructuring plan approved by a Canadian court, the company will be liquidated and left with no assets. But a PNG government-owned company Eda Kopa is seeking to recoup some of its money, in an ongoing dispute back before court this week.
A new report, Why the Rush?, from the Deep Sea Mining campaign described the Pacific as the “new wild west” for speculative mining ventures, and argued Pacific regional decision-making and political processes have been manipulated by mining companies seeking to take advantage of inchoate and incomplete regulatory frameworks in the region.
Sir Arnold Amet, former chief justice of PNG, was Governor of Madang province and an MP when Solwara 1 was approved. He said he regrets that the then government didn’t adequately scrutinise the proposal.
“Let’s recognise this failed investment in the upcoming budget and ensure we don’t enter into seabed mining joint ventures in the future or issue any more seabed exploration or mining licences. We now know how deep sea mining companies attempt to manipulate governments according to their own narrow profit motives without any conscience. We look to PM Marape to stand up for Papua New Guineans against the pressure exerted by these corporations.”
The Environmental Defenders Office NSW said deep seabed mining was similar to open cut mining at depths of between hundreds and thousands of metres below the sea’s surface.
“A 10-year moratorium on deepsea mining is an appropriate application of the precautionary principle in circumstances where the consequences and need for this type of mineral exploitation is not well understood,” the EDO’s BJ Kim told The Guardian.
“But it’s not only the risks that are not well understood, it’s also clear that appropriate legal frameworks for mining of this kind are not in place, either in the Pacific or elsewhere. This type of commercial experiment in the ocean should not progress without effective regulatory measures for risk mitigation, monitoring and enforcement of conditions.”
Communities bordering the Solwara 1 project have been concerned about a broad range of environmental impacts, Kim said, including minerals leaching into seawater affecting fisheries and livelihoods, the extinguishment of unique sea species, and the risk of accidents and spillages.
“Communities are still living with the impacts of land-based mining disasters such as Ok Tedi and Panguna. Just this year in the Pacific, we’ve seen oil and ore spills in Solomon Islands and the spillage of an estimated 200,000 litres of toxic red slurry from the Ramu Nickel mine in Madang, PNG.”
Besides PNG, the tiny island nation of Nauru has been deep sea mining’s strongest supporter.
Start-up DeepGreen is seeking to extract cobalt and other metals from a 75,000 sq km zone in the Clarion-Clipperton Zone in the Pacific, over which exclusive control has been granted to Nauru. DeepGreen has secured $150m in funding, the bulk from Swiss-based Allseas, to begin feasibility studies.
Nauru is a country already scarred by mining. More than 80% of the tiny island’s landmass has been rendered uninhabitable by phosphate mining during the 20thC, most by colonial powers the UK and Australia.