Company to begin meetings on quarry

Middlemarch: Diatomite mining

THE owners of a multimilliondollar diatomite mine development near Middlemarch begin public consultation in coming weeks as the project gains impetus.

A first round of funding has been secured by Plaman Resources Ltd, which trades as Plaman Global. More than $28 million has been raised for the development, and more is sought.

Plaman’s general manager in New Zealand, Craig Pilcher, when contacted, said public consultation, including in Middlemarch, would get under way by the end of this month or early next month, including with the Otago Regional Council, Dunedin City Council, iwi, the Strath Taieri Community Board and the public.

‘‘We expect people will have a lot of questions, so there will be a fair bit of engagement [ahead],’’ he said.

Mr Pilcher said the first tranche of funding would be used mainly for land purchases, increasing corporate staffing and further diatomite trials with prospective customers.

‘‘More private [fund] raising is in progress,’’ he said.

The Foulden Hills site, up to 1000m in diameter and 180m deep, was a volcano about 23 million years ago. It became a lake and over the next 130,000 years it was layered and filled with decaying, silicabearing microscopic plant life.

‘‘Quarrying is planned to

commence in 2021, some preliminary infrastructure works will commence before this,’’ Mr Pilcher said.

Many fulltime staff directly employed by Plaman would be trained during 2021, as well as staff for large service providers who would be needed.

The diatomite at Foulden is rare in having a high organic content. It would be processed into stockfeed supplement for poultry, pigs, dairy and beef.

When asked about customers, Mr Pilcher said there were large companies across the United States, Brazil, Mexico and Argentina which had committed to undertake finishedproduct trials.

Ultimately, he believed the top export markets would be ‘‘a fairly even split’’, across North America, South America, Europe and the Asia Pacific region.

Plaman has an application before the Overseas Investment Office, to buy a further area of about 400ha at Foulden Hills.

SEED funding of $US20 million ($NZ28.5 million) has been secured by Australian company Plaman Global, which is proposes to mine more than 30 million tonnes of a rare organic black diatomite near Middlemarch, Central Otago.

Plaman Resources Ltd, which trades as Plaman Global, bought the mine in 2015 for more than $A5 million ($NZ5.4 million).

It has a potential mine life of 27 years and estimated resource of 31 million tonnes, which would be processed to supplementary stock feed and exported.

Unconfirmed funding estimates range from tens of millions of dollars’ investment to several hundred million, depending on the scale eventually achieved.

In an article by Animal Pharma, Plaman’s president of animal nutrition and health Rob Aukerman said the company had received $US20 million from multinational investment bank and financial services company Goldman Sachs.

That would be used to build Plaman’s workforce and undertake more animal feed trials.

Goldman would remain financial adviser to the project as it seeks further funding, he said.

The initial concept is for the 42ha mine at Foulden Hills to employ up to 40 staff. The raw diatomite would be trucked to a site near Bluff for processing, by up to 90 staff, then exported.

Industry sources confirmed Plaman was still considering alternative options for transport, processing and export..

It is expected the project could take three to four years to get production fully under way.

The Foulden Hills project is considered the largest black diatomite quarry known.

Mr Aukerman said diatomaceous earth was used in a range of industries, including human health, and was approved for use in animal feed in many countries.

‘‘Its a unique product that is very much rich in organic matter,’’ Mr Aukerman said.

As an animal food supplement, diatomite improves gastrointestinal health and may reduce the need for antibiotics.

To date, Plaman had completed successful feed supplement trials on poultry and pigs. Cattle were next on the trial agenda, and later, aquaculture and the pet sector.

Mr Aukerman said all the big animal health companies were trying to develop the ‘‘clean food movement’’, given antibiotics and pharmaceuticals had come in for a lot of scrutiny in recent years.

‘‘It’s the right time for our product. It’s natural, it’s nonantibiotic and it has broad applications,’’ he told Animal Pharma.

He noted there was not a complicated regulatory pathway ahead for diatomite as a supplement, given its existing approval in many countries.

Plaman’s ultimate majority shareholder is listed as tech giant Iris Corporation of Malaysia.

Earlier this month, Plaman undertook to continue its relationship with the University of Otago’s geology department, allowing access during the year.

The department considers the Foulden Hills site one of the country’s ‘‘preeminent’’ fossil sites, and hopes a part of the site will be preserved in perpetuity.

A Animal Pharma is part of the business intelligence division of Londonheadquartered Informa PLC, which is listed on the London Stock Exchange and is a member of the FTSE 100. Informa is a business intelligence, academic publishing, knowledge and events business, with a staff of 7500 worldwide.