NZ Herald - Chris Castle and Linda Sanders: Phosphate mining rejection hypocritical

Dear Chatham Rock Phosphate shareholder or stakeholder,


This article was published earlier this week in the NZ Herald. I include both hard copy and the link.


Best regards,


Chris Castle

Chief Executive Officer

Chatham Rock Phosphate Limited


Cell: +64 21 558 185

Skype: phosphateking

Chris Castle and Linda Sanders: Phosphate mining rejection hypocritical

On pastures, Chatham Rise phosphate minimises waterways pollution because, unlike superphosphate, it binds to the soil so very little leaches into waterways. Photo / NZME.

Phosphate is crucial to plant growth and there are no local land-based sources. For the sake of our farms and waterways, and our economy, New Zealand needs this product's strong environmental benefits.

Yet a decision-making committee of the Environmental Protection Authority last month rejected Chatham Rock Phosphate's mining application, primarily because of perceived uncertainty over environmental effects.

The misguided decision shows the law needs revising to focus on risks associated with uncertainty and how environmental effects can be monitored and managed. After all, crossing the road has uncertainty, but the risks can be managed.

Chatham Rock Phosphate (CRP), a New Zealand public company, proposes mining 30sq km a year to extract 1.5 million tonnes of phosphate nodules for use in New Zealand and Asia-Pacific. The area is on the Chatham Rise, about two-thirds of the way to the Chatham Islands, at a depth of 400m.

The committee focused on potential environmental effects, but gave no weight to what we believe are considerable environmental benefits:

On pastures, Chatham Rise phosphate minimises waterways pollution because, unlike superphosphate, it binds to the soil so very little leaches into waterways.

It needs less frequent application as the fertility effect lasts three years, not one.

The local product has almost no cadmium, a heavy metal that stores in the soil and can be a health hazard. The current Moroccan product has among the world's highest concentrations.

CRP's product has a much lower carbon footprint because it doesn't need to be shipped from overseas.

It also offers a strategic security of supply. Almost all phosphate supplies come from politically unstable areas, mainly in North Africa.

CRP would be an ethical producer of farm inputs, and New Zealand wouldn't be exporting its pollution. Importing all our phosphate requirements shows the hypocrisy of wanting the benefits of highly productive farming while exporting our environmental footprint to countries that mine phosphate on land, which involves severe social and environmental distress in communities.

The committee discounted the project's economic benefits by focusing on a World Bank nominal phosphate price, a figure with no relevance to how the phosphate market operates.

Why would CRP pursue a marginally profitable project? We advised NZX in January that based on current exchange rates our annual profit before royalties and taxation would be almost $100 million. Only a few New Zealand companies generate profits that high.

New Zealand would benefit from CRP paying $34 million in annual taxes and royalties, plus millions in port charges. Jobs - many high-value and knowledge-based - would be created in the port, on the mining ship, in environmental monitoring and broader scientific research, in the agriculture and hospitality sectors and on the Chatham Islands.

The income earned by extracting phosphate would be $9.7 million per sq km, compared with $9000 per sq km annually from bottom trawling.

The committee concluded mining would have no significant impact on fishing yields or fishing industry profitability, marine mammals or seabirds. Despite this, they worried about our mining being in a Benthic Protection Area. These are areas where bottom trawling of fish is banned under the Fisheries Act.

The committee ignored CRP's proposed no-mining areas that would maintain comparable environmental protection on the Chatham Rise until marine protected areas can be enacted.

Ninety-six per cent of New Zealand is under water and development and environmental effects already take place there, particularly commercial fishing. Why is it okay for bottom trawling to be environmentally unregulated and damage 50,000sq km of seafloor every year, yet CRP's 30sq km is a greater threat?

Chris Castle and Linda Sanders are directors of Chatham Rock Phosphate.