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Nautilus mining project not as bad as it’s cracked up to be

Artists's impression of the Solwara production support vessel


CALIFORNIA - Everyone take a deep breath.  We need some clarity of thought on the Solwara 1 project in the territorial waters of New Ireland and East New Britain.  

Sir Arnold Amet is the latest person to jump on the anti-Nautilus bandwagon.  He served as Attorney-General and is familiar with many of the details of the Solwara 1 agreement.

In PNG Attitude recently, Sir Arnold made what I believe to be unfounded accusations against Nautilus Minerals, claiming that Solwara 1 is a “dodgy project” and “Nautilus is not a professional outfit.”

To the contrary, Nautilus has demonstrated its professionalism by investing at least K1.7 billion in the project. It has done due diligence in research, sending experts to dive into the Bismark Sea to ascertain the feasibility of the project and has engaged in 10 years of research and experimentation for the project.

Papua New Guinea is one of the few places on earth where very hot water shoots up through hydrothermal vents and then mixes with the cold water on the ocean floor to form hydrothermal “chimneys” rich in gold, zinc and copper.

These chimneys, which grow to sizes of three to 30 meters, eventually tip over and fall to the ocean floor. It’s been happening that way for thousands of years. 

At 7%, the concentration of copper on these chimney shards is exponentially higher than the 0.7% found in land-based mines and the gold concentration is four times greater than land-based mines.   

Very few countries have such valuable resources lying on the floor of their territorial waters. Those resources are not doing anyone in PNG any good as long as they continue to lie one-mile deep on the ocean floor.  Experts agree these shards are definitely worth mining.

Land-based mines in PNG and elsewhere in the world are hard on the environment, with blasting, use of cyanide to isolate the gold, and dumping of tailings into river systems.

All indications are that the Solwara 1 deep-sea mining project will leave a minimal environmental footprint. Because of the greater concentrations of copper and gold, less material needs to be extracted from the ocean floor to achieve a similar production rate.

Because the mining will take place at a depth of 1,600 meters, the environmental impact will be minimal at 1,400 meters and very limited above that level. There will be no blasting. Compared to land-based mines, tailings will be minimal or non-existent. Why all the negativity?

Sir Arnold complains it’s an experiment.  Of course it’s an experiment.  A project like this has never been undertaken before. For the first time in history the technology is available to harvest the riches on the ocean floor. The government and the people of Papua New Guinea as well as Nautilus will be the beneficiaries. 

Sir Arnold fails to mention what he should know to be true, namely that the most foolish action on the part of the PNG government would be to cancel the project. 

The PNG government has already made a K294 million investment and those hundreds of millions of kina would be wasted, PNG will never benefit if the project is nixed.

Initially the PNG government stated it would exercise its option to make a 30% investment in the project, but then it never paid. The matter was brought before the courts which determined Nautilus had responsibly fulfilled its commitments whereas PNG had not honoured its end of the agreement.

Not able to afford the 30% investment (approximately K600 million), the PNG government then opted for a 15% interest in the project, but dragged its feet in paying its portion.

In October 2013 PNG was instructed by the court to pony up 15% of the project cost. Again the government failed to make a payment by the deadline. The matter was again brought before the courts and finally the government made the K294 million payment.

The procrastination by the government to pay its part of the project has probably led to a one to two year delay. 

Sir Arnold knows all this. Why is he now so sour on the project when just a few years ago he was a member of the national executive council that approved it?


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Bernard Corden

In times of universal deceit, telling the truth becomes a revolutionary act.
If this project has any American influence the environmental impact statements will be a pack of lies documented by a consultant who will ensure it passes the thump test and charge $350/ hour.
The mere length of the EIS will defend itself against the risk of being read
The further society drifts from the truth, the more it will hate those that speak it - Orwell.

Just read through the environmental approval process for the major coal seam gas projects in Queensland and the torture that whistleblowers such as Sally Macdow and Simone Marsh have endured.

If the project has any US involvement you can guarantee that the State of PNG will be carrying the risk and the corporate behemoths will be making a fortune in the current neoliberal climate.

Speak to the septics about Love Canal at Niagara Falls, The Valley of the Drums at Bullitt County near Louisville or the Radium Dial Company and its treatment of the Radium Girls. Two of the victims were buried in lead lined coffins yet radiation levels were concealed following the autopsies and one death was recorded as syphilis by a company appointed doctor.

US corporations are a bunch of lying socially autistic mercenaries. One death is a tragedy, a million is a statistic.

Then read the transcripts from the recent Queensland parliamentary inquiry into black lung and let me know what you think of their ethics.

They have no soul to save or body to incarcerate.

William Dunlop

Oil Search never needed PNG government investment assistance. I and many many PNG residents as far back as the late 1960's were regular investors maintaining Oil Search's financial viability over many decades, right back to when it was APC.

Greed, first in the form of Arthur Somare and latterly the Boyo himself Peter O'Neill brought this financial disaster about. Slainte.

Philip Fitzpatrick

O'Neill thinks like a bean counter. And he approaches government finances as if it is his own money.

Buying into these sorts of projects, therefore, seems logical to him. He doesn't understand the role of government. He doesn't understand that government is a facilitator, not an investor.

One of the biggest problems with governments the world over is they are dominated by lawyers, economists and bean counters. None of these professions are particularly trustworthy.

Governments need heart, not cold blooded money men.

Paul Flanagan

Nautilus or Oil Search - which was the worst investment decision by the O'Neill PNG government?

Neither should have involved government funding - PNG had much more pressing needs in areas such as health and infrastructure.

This type of project should have obtained private backers to bear the risks in an experimental technology. The fact that the O'Neill government was dragged through the courts to make its extra contributions suggests it is having serious second thoughts about the project.

In such circumstances, Nautilus should just move to private backers. So why are they having difficulty raising the additional funding from private sources?

30 years ago when I was an economist in the Pacific area of ADAB, sea-bed mining was considered a long-term but uncertain possibility.

Over the following decades, technology has improved. However, there remain serious concerns. When talking about the potential of Deep Sea Mining (DSM) in the recent "Pacific Possible" report by the World Bank, it notes:

"There are, however, significant challenges to this emerging industry. These include weak regulatory and institutional capacities and patchy traditions of transparency and stakeholder consultation, substantial uncertainties about the economic potential of DSM, and limited understanding of the environmental and social risks associated with DSM mining.

"This is an unusual situation for governments and industry alike, where the underlying data used to model costs and benefits is limited to scarce observations for which connectivity to the surrounding environment is not well understood. DSM mining is proposed at great depths where regulatory monitoring is exceptionally difficult." (page 71)

Like Oil Search, the Nautilus investment was a poor judgement call by the O'Neill government for the people of PNG.

There were better uses for the funds available, especially given the uncertainties highlighted by the World Bank. Nautilus should refund the moneys invested by the PNG government.

Certainly there should be no more government financing. Then there is a need for properly verified research to provide the necessary assurances to protect the people in surrounding areas.

There is a need to change PNG's system of taxation to ensure a fairer return from any resource project that proceeds. It is likely that Nautilus will have generous accelerated depreciation arrangements and other incentives which would mean that even from just a revenue perspective there will be no quick fixes to the government's budget deficits.

I applaud Sir Arnold Amet's willingness to engage in this important issue facing PNG. I do hope lessons have been learnt - and these include the government being equally cautious about directly investing in agro-industries.

The government's role should focus on research, infrastructure, appropriate regulation and removing barriers such as an uncompetitive exchange rate and limited private banking credit. There are better ways for funding and decision-making around such uncertain projects.

We just don't know how bad the Nautilus project could be - let's be more careful until we know more. Those "chimneys" won't be going anywhere so there is time.

Michael Dom

Who is Fernhout and what's his interest?

His so called clarity of thought is no clarity at all.

Don't confuse folks being anti-Nautilus with us being anti-fucked over.

Your terming Sir Arnold's's words a complaint are insulting.

First of its kind of fuck-up is not a good recommendation from an industry known for fuck-ups.

And that foolish fuck-up PNG government does not need to jeopardise the environment of New Ireland for a fuck-up business deal.

Fernhout comes from the same crowd who said the Panguna mine would be good for the country.

Yes, it was.

The people of Bougainville loved it all the way to hell and back.

Environmentally, socially and politically scarred. Oh thank you so much for taking the copper.

Show us one mine that does not have one fuck-up.

That might afford some clarity.

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