Pacific seabed mining - turbulent currents ahead?

Materials World magazine
1 Dec 2014

Michael Schwartz focuses on the varied trends of Pacific seabed mining

Mixed fortunes await the seabed mining operators of the Pacific. Some developments continue unaffected and some new projects are likely to be approved for national interests. Others, however, are under challenge from environmentalists and governments. In fact, in some parts of the Pacific, the next year will be one of the most important in the history of seabed mining. 

On occasions, individual disputes can be resolved. Nautilus Minerals Inc announced on 24 April 2014 that the Papua New Guinea Government had placed US$113million into escrow, a sum it had previously committed to bringing the development phase of Nautilus’ Solwara 1 project to first production. The Solwara mine is designated for copper, gold and silver production of 1.2-1.6t/y of sulphides material, in turn leading to Nautilus growing its tenement holdings in Fiji, Tonga, the Solomon Islands, Vanuatu and New Zealand

John Elias, media advisor to Nautilus Minerals, confirms the company’s overall intentions. ‘Solwara 1 remains our maiden project and primary target for production at the moment. However, we are building a pipeline of prospects for the future as well.’

Within these countries’ territorial waters, Nautilus Minerals holds more than 185,000km2 of granted tenements and a further 215,000km2 under application. More specifically, its wholly-owned subsidiary Tonga Offshore Mining Ltd (TOML) was granted a 15-year exploration licence by the International Seabed Authority (ISA) in 2011. The seabed nodules are rich in copper, nickel, manganese and cobalt between depths of 4,500–6,000m. Elias continues, ‘There is significant interest in seafloor mining from many national governments. Nautilus holds more than 500,000km2 of exploration territory or tenement applications in PNG, Tonga, Fiji, Vanuatu, the Solomon Islands, New Zealand and the Central Pacific, and has secured some of the most prospective areas of seafloor for the potential development of future projects.’

The machinery of seabed mining

Coincidentally, September 2014 saw ISA Secretary-General Nii Odunton visit the Soil Machine Dynamics (SMD) facility in Newcastle upon Tyne, UK, to examine the Seafloor Production Tool (SPT) chosen as Nautilus Minerals’ mining technology.

The Auxiliary Cutter (AC) is the third SPT being built for Nautilus Minerals to mine at Solwara 1, the others being a Bulk Cutter (BC) completed in April, and a Collecting Machine (CM) also in final assembly. The roughly 250t AC is the pioneering tool that prepares the rugged seabed for the more powerful BC. These two tools gather the excavated material, with the CM collecting the cut material by drawing it in as seawater slurry with internal pumps and pushing it through a flexible pipe to the subsea pump and on to the Production Support Vessel (PSV).  

Reviewing Nautilus Minerals’ involvement with SMD, Elias says, ‘We did have input into the design of the seafloor production tools that SMD is manufacturing for us, but they are based on existing machines that the company builds for the oil and gas and telecommunications industries for excavating seafloor trenches.’

And the difficulties ahead?

Environmental objections are always prominent when it comes to marine mining and Australia’s Northern Territory (NT) is no exception. At present, there is considerable tension in NT as a three-year moratorium on seabed mining comes to an end in 2015. This example demonstrates the difficulties facing the seabed mining industry.

Northern Manganese was looking to explore Groote Eylandt, an area in the Gulf of Carpentaria off the NT coast, when traditional owners and environmental groups raised concerns to the NT Government. The Australian Marine Conservation Society (AMCS) petitioned the Government earlier this year, stating, ‘The NT is at risk of seabed mining in 2015. Next year the current moratorium comes to an end. To secure the future of our marine environment and the healthy fishing, tourism and lifestyle that rely on it, urge the Government to put a permanent end to seabed mining in the Northern Territory. Seabed mining is a significant and unprecedented threat to Top End sea life… It destroys marine life and fish habitat. Seabed mining amounts to strip-mining the sea floor.’

In June 2014, the NT Government issued a total ban on seabed mining in the area, with NT Regional Development Minister Alison Anderson describing the industry as ‘untested’. When the NT Chief Minister, Adam Giles, raised the possibility of compensation for Northern Manganese, Chairman Doug Daws responded to ABC Darwin that, ‘We don’t want compensation, we want to get on with the job’.
Eventually, Northern Manganese lodged a claim with the NT Government, demanding compensation for the Government’s intention to declare a general reservation over waters surrounding Groote Eylandt. Extensive negotiations ensued, but on 1 August this year, Northern Manganese signed an agreement with the NT Government. It would surrender its Groote Eylandt sea or ‘wet’ tenements in exchange for US$2.8million compensation as full and final settlement.

Two weeks later, Northern Manganese confirmed that it had received the US$2.8million. While this leaves the company without the four tenements in question, it still retains two other island applications within Groote Eylandt, as well as applications for four islands and the wet tenements in Blue Mud Bay. It is all too clear that negotiations in areas of intense hostility are sometimes necessary.

New Zealand’s iron ore resource

In a more favourable position is the planned extraction of iron ore from the black sand deposits off New Zealand’s North Island. Since 2007, Wellington-based Trans-Tasman Resources Ltd (TTR) has invested US$60million in investigating this area, studying the relevant aspects of engineering, marketing, the local environment and potential impacts. TTR’s objective is to develop an iron sands extraction project that is environmentally sustainable while delivering substantial economic benefits.

Some 22km off the coast of Patea lies TTR’s initial South Taranaki Bight project, stretching across 65.76km2 under 20–45m of water.
Matt Brown, TTR’s General Manager Exploration, sets the scene. ‘The project is currently seeking approval for the run of mine production of 50Mt/y for the production of up to 5Mt/y of iron sand concentrate over 10 years. The mining and production of the iron sand will be undertaken by a purpose-built integrated mining vessel, using a subsea ‘crawler’ to mine the seabed sediment. This crawler is based on the same technology that is used by DeBeers Marine to mine offshore diamonds in Namibia.’

In fact, TTR has strong technical relationships with both De Beers Marine and the Dutch-based Royal IHC company, which specialises in marine dredging and mining vessel technology.

TTR requires authorisation before it can extract any material. On 2 May 2014, TTR received a mining permit from the New Zealand Government under the Crown Minerals Act 1991 for the South Taranaki Bight. 

It now has a JORC mineral resource and ore reserve over the area for which it applied for environmental consents. Royalties are governed by the Crown Minerals (Royalties for Minerals Other than Petroleum) Regulations 2013.

Under the mining process, iron ore concentrate from the mining vessel will be slurried to a transhipment vessel, where it will be de-watered and stored ready for transfer to bulk carrier vessels for worldwide export. After that 10% of the extracted material has been exported, the residual sediment (around 45Mt/y) will be returned to the seabed via a controlled discharge below the mining vessel, usually backfilling previously extracted areas.

The environmental aspects of South Taranaki are paramount. TTR did receive an early setback, as Matt Brown explains. ‘TTR applied for the marine consents to the Environmental Protection Agency (EPA), which was refused. However, given that the EPA and the legislation used to determine the decision are very new and that TTR was the first to apply under the new regime, TTR is appealing the decision to the New Zealand High Court. It was a setback, but TTR believes the appeal process will demonstrate that there has been a significant error in law in how the EPA made its decision.’

In addition, physical processing on the mining vessel involves separation of the ore from the seabed material using gravity and magnetic processes. TTR stresses that this does not involve the addition of any chemicals or other products. The remaining sediment will be re-deposited on the seafloor in a controlled manner, usually backfilling previous mined areas. Finally, TTR has placed a self-imposed ban on operations within two nautical miles of the coastline.

While seabed mining is set to continue within the Solwara jurisdiction and South Taranaki’s difficulties are difficult but not insurmountable, would-be seabed miners need to make absolutely sure that local administrations are entirely happy with any plans submitted. As the experience of Northern Manganese shows, negotiations in the face of hostility are still an option to be assessed.