Developing a New Zealand source of phosphate could minimise the health risks associated with cadmium, according to Widespread Energy Ltd.
Widespread is evaluating the economic potential of developing a reserve of 30 to 100 million tonnes of rock phosphate, which has tested low levels of cadmium. The reserve is located on the seabed in shallow waters of New Zealand’s Chatham Rise.
The Ministry of Agriculture and Forestry announced on Friday it is planning to manage the gradual build up of cadmium in New Zealand soils through the cadmium contained in imported phosphate.
Tests of samples of the Chatham Rise rock phosphate by the local industry shows it has minimal cadmium levels.
“While those tests are not conclusive, they are encouraging,” Chris Castle, Widespread managing director said.
“We have been aware of the cadmium issue and we see our potentially low cadmium levels as one of the environmental benefits of developing a local phosphate resource.
Widespread is currently planning an international initial public offering to finance the development of the resource. A local resource will also reduce New Zealand’s carbon footprint through lower transport costs, and benefit the country’s balance of payments and foreign exchange exposure.
A key part of extracting the resource will focus on environmental impacts by minimising seafloor disturbance and extracting the resource from less than 1/1000th of the Chatham Rise.
“This project potentially offers major environmental and economic benefits for New Zealand, especially because rock phosphate can be applied directly as a slow release fertiliser, with none of the nitrogen run-off problems caused by super phosphate,” Mr. Castle said.
The MAF cadmium control programme follows research that shows cadmium levels have gradually increased over decades. The strategy recommends farmers and growers work closely with their fertiliser representatives to determine the most cost effective, efficient and appropriate fertiliser application and land management options.
An NZPA report says the main concerns raised by cadmium are that chronic exposure can lead to kidney damage, bone disease and may be a risk factor in breast cancer. The build-up of cadmium levels in sheep made MAF ban the export of some offal from animals older than 2-1/2 years.
Testing showed up to 28 percent of sheep kidneys and 20 percent of cattle kidneys sampled between 1989 and 1991 exceeded the maximum residue levels allowed in New Zealand meat of 1 mg per kg. Health guidelines for soil contamination at the time had a maximum level of 3mg/kg of soil.
The natural average level of cadmium in NZ soils is 0.16mg/kg, but
when farmland is taken into account, the average is more than double
that, 0.35mg/kg, and soils on farms which have had a lot of super
phosphate, such as dairy farms, can have as much as 2.52mg/kg.
Dairying areas with high fertiliser use tend to have the highest average contamination, including Taranaki (0.66mgkg), Waikato (0.60mg/kg) and the Bay of Plenty (0.52mg/kg).
Chatham Rise Project Background
On 25 February 2010, a consortium comprising Widespread Energy and associated company Widespread Portfolios Limited, (“the Joint Venture or JV”) was granted an offshore prospecting permit by the Crown Resources division of the Ministry of Economic Development covering an area of 4,726 km2 on the central Chatham Rise. The permit area, which is in New Zealand territorial waters, is located 450 km east of Christchurch and includes significant shallow seabed deposits of rock phosphate and other potentially valuable minerals.
The initial term of the permit is two years with further priority rights to either extend the prospecting permit or apply for a mining licence.
An independent valuation of the project by Rockpoint Corporate Finance in May 2010 found the project had a realistic possibility of being commercially viable. It found that, based on conservative modelling, the project could earn net profit before tax of $40 million a year. Widespread’s own models put that figure as high as $80 to $100 million a year.
In addition to its financial potential, the project offers a number of benefits to New Zealand including:
- Reduced exposure to currency and commodity risk and reduced import burden
- Known, fixed costs
- Reduced carbon footprint from lower transport costs
- Possible export earnings.
The project is also New Zealand owned and controlled.
The challenges identified of extracting the resource include its sporadic distribution (it averages 66 kg/m but there is great variability). Also extracting phosphate at 400m depth has not been achieved, though other minerals have been extracted at greater depths. The phosphate, in nodules of 2mm to 150mm, is located in a 1m layer of sandy silt above a chalky clay sediment basement.
Environmental considerations are an important part of the work being done and the company has an ongoing wide-ranging programme of consultation with fishing, conservation, Maori and other interest groups.
For further information please call Chris Castle on 021 55 81 85 or email email@example.com