Deep sea mining hopes hit by New Zealand decision – by Jamie Smyth (Financial Times – February 22, 2015)

http://www.ft.com/intl/companies/mining

Sydney – A decision to block a deep sea mining venture off the New Zealand coast has cast a shadow over an emerging global industry that proponents say could revolutionise how minerals are extracted.

The sea floor is rich in copper, nickel, manganese, cobalt, zinc and a host of other minerals used in technology products. Improvements in undersea extraction technology have now put these within reach of miners.

New Zealand has lead the way in developing sea floor mining. But progress has now stalled following this month’s rejection by environmental regulators of a proposed project by Chatham Rock Phosphate off the coast of Canterbury, the second mine application refused within a year.

The decisions were welcomed by green groups, who fret that mining would damage vulnerable undersea ecosystems, which are relatively underexplored. But their delight is not shared by companies eyeing deep sea prospects.

“To say we are bitterly disappointed is an understatement,” said Chris Castle, Chatham Rock Phosphate’s managing director. “This will make it even harder, if not impossible for companies to attract capital for new projects in New Zealand.”

For almost 20 years deep sea mining has been flagged as a commercial opportunity. David Cameron, UK prime minister, claims it could be worth £40bn to the UK over a 30-year period.

The International Seabed Authority, a UN agency, has so far issued 26 exploration licences to governments and companies enabling them to operate in international waters. New Zealand, Namibia and Papua New Guinea have awarded national licences for seabed mining exploration. De Beers uses ships to recover diamonds off the coast of Namibia at depths of up to 140 metres.

But scant deep sea mining has taken place. The world’s largest mining groups are sidelined, apparently deterred by the uncertainty of both economics and the environmental impact of the activity, which has prompted authorities to order moratoriums on mining in Namibia and the Australian state of Northern Territory.

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