Iwi may invest in seafloor mining

CHRISTCHURCH: Chatham Islands iwi groups may invest in a project to mine seafloor phosphates in the region if they can agree on a marine consent application for the project 450km east of Christchurch.

Developer Chatham Rock Phosphate has executed an informationsharing and collaboration agreement with the asset holding company of Ngati Mutunga O Wharekauri.

The pair have agreed to work together to develop an application that meets the environmental, economic, social and cultural objectives of both parties.

If they can do that, Ngati Mutunga will support the application. If the consent is granted by the Environmental Protection Authority, the parties agree to work together to mitigate any environmental impacts from the project and ensure the Chatham Islands community ‘‘realises tangible benefits’’ from it.

Chatham Rock chief executive Chris Castle said the agreement was a ‘‘very significant’’ milestone. The community, represented by Ngati Mutunga o Wharekauri, Moriori, and the Chatham Islands Enterprise Trust, would be the most directly affected by the operations and also have major fishing interests in the waters surrounding the Chatham Islands.

‘‘We are also gratified that Ngati Mutunga o Wharekauri is proposing to make a significant future investment in Chatham Rock Phosphate if the agreement proceeds and the marine consent is obtained. In those circumstances, Ngati Mutunga o Wharekauri and possibly Moriori and the CIET would receive options that are in total equal to 15% of the number of shares on issue,’’ he said.

‘‘The exercise price of these options will reflect and recognise the accumulated investment made to that date by our shareholders.’’

Chatham Rock shares last traded at 16c apiece, valuing the company at $2.95 million. About $37 million has been invested to date.

The company has spent more than a decade advancing a $US200 million$300 million ($NZ296 million$444 million) project to mine phosphate from the seafloor of the Chatham Rise, about 450km east of Christchurch.

It would be used as a lowcarbon, lowcadmium and low runoff alternative to imported fertiliser.

Chatham Rock is aiming to submit a new marine consent application in the thirdquarter of 2020. Its first, which followed about $33 million of investment and research over seven years, was rejected by an Environmental Protection Authorityappointed panel in 2015.

That proposal, which Ngati Mutunga and major South Island iwi Ngai Tahu had opposed, had proposed mining 30sq km of seabed annually using a suction dredge to produce about 1.5 million tonnes of phosphate nodules in water depths of up to 450m.

The decisionmaking committee rejected the application, inpart because of the lack of scientific knowledge about the Chatham Rise marine environment, and uncertainties about what would be the world’s first seabed mining project undertaken at such depths.

The mining the company had planned was also in an area of ‘‘potentially unique’’ stony corals, and the return of waste material to the seabed would have also had an adverse impact on the benthic community in the wider marine environment, the committee found.

Chatham Rock and Ngati Mutunga said the collaboration agreement will lapse if mutually agreed ways of addressing ‘‘reasonable community concerns and aspirations’’ cannot be found.

If the consent is granted, Ngati Mutunga, and possibly Moriori and the enterprise trust, will each have an option to acquire a 5% stake in the business. — BusinessDesk