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Mining the abyss: positing a role for economic nationalism

PETER NEILL | The Huffington Post (US)

Nautilus schematicWORLD OCEAN OBSERVATORY gathers its subject matter from sources all over the world. This week's story comes from an excellent piece by Jo Chandler published in December 2013 by The Global Mail an Internet news service, now sadly going out of business, based in Sydney, Australia.

The article is framed by the occupation of Eliuda Toxok, a resident of the west coast of New Ireland.

Toxok is a ‘shark-caller’, an artisanal fisherman and devotee of traditional lore who attracts sharks to his small outrigger canoe by rattling small half-coconuts on a chain to mimic the sound of thrashing fish that in turn lures the fish to a vine noose by which he captures his prey -- some 100 caught in a career of over 40 years.

Toxok lives on less than $2 a day, and he is representative of his friends and neighbors who live in poverty far from the eyes of the developing world.

Unless that world looks to just 30 kilometers offshore where Solwara 1, a vast area of the ocean floor, has been licensed by the Papua New Guinea government for the world's first open-cut deep water mining operation in pursuit of gold, silver, and copper in amounts significant enough to justify an investment of some $383 million toward a $600 million return over a life-span of only five years after which the "vein" is exhausted and the equipment moves on to another opportunity.

The engineering is staggering: three enormous robotic machines, two to scour the bottom and a third to vacuum this dislodged ore up to surface vessels where it will be transferred to China for processing.

The copper recovery is estimated at 10 times that of a land-based mine, and the gold is predicted at an astonishing 6.4 grams per ton. The company that has received the first exploration license is Nautilus Minerals, registered in Canada and based in Brisbane, Australia.

This enriched site is of course aligned to a volcanic ridge, near North Su, an active underwater volcano, an area where temperature, pH conditions, and the lightless environment also supports unique and profuse concentrations of heretofore unknown forms of marine life supported by the very same natural circumstances that manufactured the extreme mineral concentrations to be mined.

In this one example, you have all the conflicts of the modern world combined: our insatiable demand for natural resources from anywhere without limit, the market-driven assertion of economic value over social return, the new technical capacity to go and get without limit, the international collusion of corporate connection, corruption or political compromise by the smaller nations in which this raw wealth is found, and the social disruption resultant from the physical and financial impact on local communities that inevitably are excluded from royalties and returns exported to faceless investors far away.

There is a United Nations agency, the International Seabed Authority, based in Jamaica, that is charged with oversight of deep ocean mining, but it has done very little in its history, in part as there has not been much activity to date, and in part as it is jurisdictionally delimited from projects within a nation's exclusive economic zone.

That will change, as the economics and engineering technology have changed, and other multi-national corporations, like UK Seabed Resources, a subsidiary of Lockheed Martin in the US, are getting into the race for returns estimated in the billions.

Is this an irresistible force with an inevitable end? Two counter-forces exist and have serious oppositional power: first, the loss of the biodiversity and knowledge inherent in these unique underwater environments and the profit from the potential of future scientific transformation into medicine, food, biotechnology, and other yet-to-be-investigated contributions to human well-being; and, second, the loss to the local communities that have already experienced the disappointment of promised economic and social returns from such enterprise on land and the profit that should be derived individually, locally, and nationally from this transfer of indigenous resources and value.

"Resource nationalism" pertains here -- the right of a nation to exchange its resources for return to its population and general social welfare that is sustainable over time. Globalization has stood that idea on its head.

The Middle East has flourished on its surfeit of oil, a rich although single-sourced economy, now at risk as the resources are exhausted, similar supplies are found elsewhere, or alternatives dilute demand. Saudi Arabia and the others have had a nice ride on oil.

Why should the people of Papua New Guinea, indeed why should Eliuda Toxok not share fully in this wealth, managed as a sustainable asset in what must also be a sustainable place? We have heard this discussion before; but we are hearing it again, now, the same old debate, with perhaps the same devastating outcome, albeit in a new environment, under the sea.

Peter Neill is Director of the World Ocean Observatory


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Corney Korokan Alone

Great discussion. Appreciated.

Papua New Guineans,is still waiting to see how the flow on economic benefits of on-shore mining giants like Newcrest Lihir Mine is splashing before the locals the and the PNG's economy as a whole before we can attempt new adventures.

The last I heard, the Governor of New Ireland Province is not at all impressed with the Lihir Management in honoring their responsibilities.

That K5.00 can buy us soap and we live off the land and sea without a care of the world. Our way of perpetual sustenance is a lot different than the Canadians and the first world, unfortunately.

Whether these resources were laid there by chance or by design is not a matter for negotiation.

This is our turf. We decide what we want, when we want and how we want them

Keith Dahlberg


As a follower of PNG mining practices for the past decade, I share both the avid interest and the caution surrounding deep sea-bed mining, especially at Solwara 1.

Given the number of natural deep-sea vents in the world, said to be in the thousands and many of them bringing up valuable minerals from deeper down, the opportunities they offer cannot be merely dismissed. But Solwara raises three main issues: (1) how to resolve the present spat between the PNG Government and Nautilus Minerals Inc; (2) how to protect the exotic sea creatures and vegetation that grow around such unique habitats, and (3) how to minimize pollution (there is always some degree of it at any mine site.)

This past week's argument between PNG and Nautilus, I suspect arises from the twists and turns of the English language itself. "Thirty per cent interest" can refer to the amount of investment from a business partner; it can also mean the royalty a sovereign nation might expect from goods exported. Gold and copper are, after all, non-renewable resources belonging to the nation of PNG, with which it hopes to improve its citizens' health, education, jobs, and infrastructure. The phrase can also refer to profit, but will it mean gross sales, or net profit remaining after the corporation deducts as many expenses as it can think of?

PNG government and Nautilus need to get on the same page; never mind what the original assumptions or claims were. Some re-negotiation will no doubt benefit both. There are many competitors waiting off-stage. Mining is here to stay. So is PNG, for better or for worse.

(2) The fate of living things near a mining site is important. Some twenty new species have already been discovered from this particular site, I am told. The liveable zone is narrow; they subsist on the heat and sulfides from the vent itself. What value are they? We have derived many life-saving medicines and useful raw materials from odd places. What might we discover from these creatures? Will re-depositing the rock and sand from the ore suffocate them? Are they replaceable? No one knows.

There is an obvious way to find out, now that we can sample such flora and fauna. If the same creatures are found in vents far apart (say a hundred kilometers or more) it means that these life forms can travel, either by swimming or on deep ocean currents. By permitting only a very few initial projects, carefully monitored by the World Ocean Observatory or some other credible third party, and assessing the results after five or ten years, we shall have something besides rhetoric to go by. Let Nautilus go ahead with this pilot project. But not yet with its plans for the whole Bismarck Sea.

But if such deep ocean currents exist (which some scientists deny) then they can also carry toxins and mine tailings to distant parts of the ocean, meaning we shall have to re-think our mine waste disposal methods on land, too. (Tailings paste - one of my favorite topics - is the answer to that, but that's a discussion for another time.)

Nautilus is to be commended for not wanting to dump chemicals back into the sea, but it hasn't said much about its proposed concentrator at Rabaul, or about the waste products it will produce. (My home was a block away from a lead and zinc concentrator for ten years, and it was a dirty environment.) If Nautilus plans to send two or three shiploads of ore concentrate abroad each month, isn't there some way of anchoring a larger ship alongside the permanent surface vessel and sending the ore directly to the foreign smelter, and eliminating the Rabaul plant? Or are local jobs the goal?

Thirdly, there are the inevitable claims from the people of New Ireland, New Britain, and indeed PNG as a whole. Never mind that they never knew deep sea minerals even existed until a few years ago. They claim that the spirits entrusted them with all living things on their islands and sea, and I can respect that. And they see more of their gold and copper departing the country with no visible benefit to them or to their nation.

There is more to life and commerce than gold.

There should also be more to life than the struggle to feed a family on five kina per day. That's why PNG needs funds to build infrastructure.

Corney Korokan Alone

Papua New Guinea has rejected this venture by way of her refusal to take the compulsory 30% equity.

That decision has manifold reasons.
First and foremost is the local citizens campaign against this untested experimentation at their traditional fishing grounds.

I will not venture into the other reasons.

Our friends from the land of "Long White Clouds" don't tolerate this at their turf too.

So it is pertinent that the Canadians must learn to respect our decisions and rights.

Robin Lillicrapp

The technological frontier in respect of oil is indeed a changing landscape.

NASA's discovery of hydrocarbons on Mars threw a spanner in the works of presuming oil to be a depleting fossil resource.
Rather, the notion of oil being a naturally recurring organic fashioned by the forces at work deep in the earth became a likely reality.
Now, recent developments see the capacity to produce a desirable light- sweet- crude from algae foresee energy production which minimises the otherwise enormous costs of exploration and drilling etc.

One estimate poses the ability to produce a world supply from an algal pond the size of Texas.

Algae (not Bigglesworth's co-pilot) could be a simple solution to many a small nation's energy needs.
As with most Tech advances, the predictability of availability, supply and control is yet uncertain.

Mrs Barbara Short

Yes, the "same devastating outcome"!

I was communicating with a well educated PNGian the other day who reached the top in his profession, and he mentions "I also am concerned about PNG being rich in resources but becoming poorer each day with lack of basic services and the richness being squandered."

The rich resources of PNG are not being returned to the PNG people for their general welfare. Infrastructure, education and health are not benefiting from the resource income. The rich just get richer and the poor get poorer.

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