Statement to TV3

1 September 2013  

Chatham Rock Phosphate will not be entering into a public  debate with third parties concerning its proposal to recover rock phosphate nodules from the Chatham Rise.

The appropriate forum to consider our proposal is the Environmental Protection Authority under the auspices of the EEZ and Environmental Effects Act.

This forum will involve people with the expertise to evaluate our application and the dozens of scientific reports we will be submitting in support of that application.

Any party is entitled to make their own submission as part of that process.

Recent comments made by the Deep Water Group and Sanford Limited have been largely incomprehensible and reflect that either they have not read our plans and modus operandi, or do not understand what we propose.

In either scenario it’s pointless attempting to debate the matter through the media.

Chris Castle

Managing Director

 

Chatham news story in NZ Herald

The following article appeared in the New Zealand Herald on 13 August.  We prepared it in response to an article published on 6 August, by Sanford Managing Director Eric Barratt. We also provide a link to the original Sanford comment.

Seabed mining claims red herrings

By Chris Castle, 5:30 AM Tuesday Aug 13, 2013, Photo / Janna Dixon

Let's get one thing straight. Chatham Rock Phosphate wouldn't be considering extracting phosphate nodules from a tiny fraction - less than 1 per cent - of the Chatham Rise if we thought it was going to have adverse environmental impacts.

Our proposed environmental footprint is minuscule relative to the fishing industry's. But while bottom trawling requires no environmental consents, we need both a mining licence and marine consent, costing millions of dollars and years of research, consultation and official process, and involving full public scrutiny.

We're up for it because we know our proposal is - to borrow Sanford's Eric Barratt's quote in his Herald article - both good for the environment and good for New Zealand's economy.

Like fishing, our industry will be of significant economic benefit. New Zealand will be $900 million richer as a result of our developing this new industry and we'll be generating exports or import substitution of $300 million each year.

Our draft environmental impact assessment (EIA) - involving 30-plus scientific and other reports (produced by Niwa and other independent experts) - has identified no long-term impacts affecting key spawning, juvenile and young fish habitats on the Rise.

In contrast the EIA notes bottom trawling has a significant impact on the environment. Total areas trawled on the Chatham Rise (an area of 188,000km2) were estimated to be 125,744km2 for the 10 years from 1989/90. The annual trawl footprint on the Rise during the 2009/10 fishing year alone was 19,051 km2.

In contrast, Chatham's phosphate extraction means any particular area of the seabed will be affected only once, affecting about 30km2 of seabed each year and about 450km2 over 15 years.

Our operations simply temporarily lift the top 30cm of sandy silt and redeposit 85 per cent of it after extracting the nodules - the net effect on the sea floor is it's lowered by about 5cm. There's no "open pit" as a result of our activities.

The economic value of the phosphate resource is more than 500 times greater on a square kilometre basis than fishing.

Our product is expected to yield $9.1 million per km2. Bottom trawling yields less than $20,000 per km2.

Our extraction process is designed to minimise the environmental impact and includes exclusion zones to protect representative areas of benthic habitat.

The fishing industry has ignored the scientific evidence Chatham has provided about the environmental effects of our proposed operations.

Barratt makes many staggeringly inaccurate claims. Among these is his wild overstatement that our extraction "is the equivalent of a small mountain like Mt Victoria in Wellington every day". The material extracted each day would actually cover a quarter-acre section to a depth of 1.5m.

Nor are our processes untested. All the techniques proposed for our extraction are routinely used in dredging around the world. The only new thing is undertaking this work at 400m.

This project is important to provide fertiliser security for New Zealand's farming industry. Most rock phosphate fertiliser is imported from Morocco. It is high in cadmium, involves high transport costs and has a significant carbon footprint.

Chatham Rise rock phosphate, as an ultra-low cadmium direct-application fertiliser, has also proven to be at least as effective as processed fertilisers while drastically reducing the run-off effects on New Zealand waterways.

Chris Castle is managing director of Chatham Rock Phosphate.

Here is the link to the Sanford article:

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10908554

Bloomberg Report: Boskalis Considers `Hundreds of Millions' for NZ Mine Investment

By Tracy Withers

     Feb. 15 (Bloomberg) -- Royal Boskalis Westminster NV, the world's biggest dredging company, is considering spending ``hundreds of millions'' on a ship capable of mining a phosphate bed twice the size of Tokyo off the coast of New Zealand.

     ``We're aiming to deliver a vessel that will do the operations,'' Gerard van Raalte, a senior engineer at the Netherlands-based company, said in an interview in Wellington. It may modify an existing ship or build one, he added.

     New Zealand's Chatham Rock Phosphate Ltd. in 2011 selected Boskalis as its partner to help tap a deep-sea bed holding about 25 million metric tons of rock phosphate, worth an estimated NZ$6 billion ($5 billion). Boskalis will likely proceed with its investment in the second half of this year, once it is confident of government approvals, Chris Castle, Chatham Rock's Managing Director, said in a telephone interview.

     Boskalis took a 20 percent stake in Chatham Rock last year as falling demand for dredging amid the global slowdown made off-shore mining more attractive. In return, Boskalis agreed to provide technology and research needed to mine the phosphate --a mineral used in fertilizers -- in an area about 450 kilometers (280 miles) off the South Island's east coast.

     ``The mining license is a given, I don't think anyone regards that as a risk,'' said Castle. For Boskalis ``it's more to do with the environmental consent and their confidence in the process. The button won't be pushed until they are sure.''

                         Final Decision

     The Papendrecht-based company has to choose a ship and develop technology in time for January 2015 -- the target production date -- to mine phosphate that's 400 meters under the ocean surface. That will require an investment of as much as ``several hundreds of millions of dollars'', said van Raalte. The company's final decision is pending consent, he said.

     The rock phosphate covers 4,726 square kilometers, according to Chatham Rock's website. That would provide a local alternative to the 1 million metric tons used in New Zealand each year that's primarily imported from Morocco, it said.

     Chatham Rock shares have surged 40 percent in the past six months and were at 35 New Zealand cents at 2:30 p.m. in Wellington. Boskalis has risen 22 percent in the same period.

     Boskalis's commitment would require the mining license and the environmental consent being granted ``or considerable certainty they are going to be issued,'' said Castle. ``We're confident of the outcome.''

     Chatham Rock applied for the mining permit last September and will seek environmental consent in April, said Castle. The permit to mine can take ``many months'' to process, Britton Broun, a spokesman for the Ministry of Business, Innovation and Employment, said in an e-mailed response to questions. There was ``no specified time period for consideration of'' Chatham Rock's application, he said.

                        Earning Millions

     Boskalis projects its mining rate will be about 70 euros ($93) a metric ton, said van Raalte. That would earn the company about NZ$165 million a year based on an estimated 1.5 million metric tons being mined in that period, Edison Investment Research analyst John Kidd said in a report last September.

     The company has been talking to New Zealand government officials and helping with the mining applications, which should help speed the process, said Castle. It has also modified its existing dredging technology to work at greater depths.

     Boskalis's New Zealand venture comes as the company broadens its business to curb reliance on dredging. It also has 92 percent acceptance for a $985 million offer for Dockwise Ltd. to add ships capable of pulling oil rigs. That followed a 2009 purchase of salvage company Smit Internationale NV, which last year removed fuel from the shipwrecked liner Costa Concordia.

     Mining ``is an interesting new market for the dredging industry,'' said van Raalte. ``Our competitors are also active in this field. Everybody's looking at it at the moment.''

For Related News and Information:

Top New Zealand Stories: {TOPZ <GO>}

Most read New Zealand stories: {MNI NZ BN <GO>}

Reports on Boskalis: {BOKA NA <Equity> CN <GO>}

--Editors: Chris Bourke, Keith Gosman

To contact the reporter on this story:

Tracy Withers in Wellington at +64-4-498-2214 or

twithers@bloomberg.net

To contact the editor responsible for this story:

Chris Bourke at +64-4-498-2215 or

cbourke4@bloomberg.net