Chatham updates on EPA hearings

Update

6 October 2014

Hearings into third week

Our hearing travels to the Chatham Islands this week, with sessions held on Wednesday and Thursday.  A number of local individuals and groups are making representations both in support of, and in opposition to our proposal.

While we understand people have concerns, we believe our application addresses those, especially through suggested conditions, which include comprehensive monitoring.

You can follow every word of what happens in the hearings on the EPA website.  Proceedings of each day appear the day after. 

Check out:

http://www.epa.govt.nz/EEZ/chatham_rock_phosphate/Pages/default.aspx

Seven days down ……

Public hearings got underway on 25 September at the RA Vance stand at the Basin Reserve in Wellington, and continued each day last week.

We’ve had visits from a regular stream of people with an interest in the project and there’s been media coverage on TV, radio, newspapers and other electronic media. 

We’ve chosen to ignore the snapshot comments posted on social media from some submitter supporters randomly present at the hearings.  They are made completely out of context, are inaccurate and misleading.

Fundraising Opportunity

Following the recent capital raisings, including the last two successful shareholder rights issues, with a strong show of support from our 700 New Zealand shareholders, we now offer other investors a chance to participate at share prices last seen in 2010.

The shortfall from the most recent issue is being offered to qualified habitual investors in a limited, short term opportunity to participate.  The shares are offered at NZD 0.12 per share (or the approximate foreign currency equivalent). In addition, for each share issued, one CRPOB $0.688 option is offered.

We continue to believe these share price levels represent exceptional value and that after the Marine Consent grant the share price should be much higher.  If you are interested please immediately contact me.

Boskalis evidence very impressive

Three representatives from Boskalis made the long trip from Holland for a three-day visit to watch some of the relevant evidence first hand and to give their own expert evidence.

Sander Steenbrink, development dredging manager, talked about the close links and commitments between the two companies.  In a report by Business Desk he is quoted as saying Boskalis has a strong track record in managing these types of projects.  He considered measures to mitigate the impact of mining on the environment by leaving areas to aid re-colonisation of the marine ecosystem met the firm's corporate social responsibility goal of 'building with nature'.  He didn't think there were any technical concerns that would limit monitoring the project.

Boskalis senior engineer Jamie Lescinski said the modelling used to determine the impact of the plume of discharged sediment from the mining operation took a conservative approach. The plume is expected to average 10m above the seabed during a mining cycle, but she said it could go as high as 20m without any substantial variation.

Lescinski said lessons and samples from the initial mining stage would be used to model the potential impacts in expanded areas if the project proceeds to those later stages.

"I would advise that, before mining in a new area, a condition should be imposed that seabed samples need to be collected and analysed and that information should be used in the model as inputs to rerun operational predictions before moving into new mining," she said.

"My expectation is it would be similar, but that's an expectation. I would want to see that sediment first and see if there are any similarities to the area that's already known."

Gerard van Raalte, who has been overseeing the project for Boskalis, said project would draw on existing techniques and equipment, but would also need its own bespoke solutions to deal with unique issues.

"What we have developed so far is complex, but in fact it's a combination of state of the art techniques that are applied in a new context," van Raalte said. "We are convinced we have chosen the best available technology with the best environmental practices to mitigate as much as possible what we can do in the design stage."

He said the project will need extensive monitoring in the early stages to ensure it would be able to cope with any unexpected problems that arise.

Conferencing almost there

In the lead up to and the first days of the hearing there has been intensive conferencing by experts from CRP and submitters.  This is designed to find out agreed common ground and areas still in dispute. 

Areas covered include:

• impacts on commercial fishing
• fish
• rock lobsters
• sediment modelling
• benthic ecology
• seabirds
• radioactivity
• spatial planning
• economics
• toxicology and water quality
• ecosystems effects.

There are a couple of sessions yet to complete including one on mammals.

It’s heartening to see how effective this process is and how much “noise” it removes from the hearing process – though it doesn’t stop some opposing legal counsel from inferring uncertainty even where it is negligible.

The conferencing is pretty intensive, especially as some of the experts are joining from all parts of the globe and sometimes in the middle of their night!  CRP is very grateful for the high level of professional input.

Chris Castle, Managing Director

chris@crpl.co.nz or +64 21 55 81 85

NZX Announcement: Media Release - CRP Marine Consent hearing starts today

Media Release

CRP Marine Consent hearing starts today

25 September 2014 

Chatham Rock Phosphate today launched its application to the Environmental Protection Authority for a marine consent to extract rock phosphate nodules from the seabed on the Chatham Rise, 450 km from New Zealand.

CRP, a New Zealand NZAX listed company, has spent four years and nearly $30 million to research its proposals to mine 1.5 million tonnes for use on New Zealand farms and export markets.

Counsel James Winchester, in his opening submissions, said the research has found effects are confined to a small area.  He said the key conclusions from an enormous body of evidence were:

·       The area is not significant for fishing or spawning

·       There is expert consensus the effects on fish and fishing are low

·       Modelling of sediment plume shows the effects will be confined and the main impact on benthic (seabed) organisms will be within the mining blocks.  There will not be material adverse effects on fish, eggs or larvae over a wider area, with suspended solids quickly returning to normal between mining cycles.

·       Risks to marine mammals and seabirds from a single vessel and the mining operation are low and can be appropriately managed.

·       There will be significant and irreversible effects on the benthic environment where mining occurs, but these are unlikely to have flow-on consequences for the food web of the Chatham Rise.  While the impact included permanent effects on stony corals, these are present throughout the Exclusive Economic Zone and CRP is proposing significant mitigation.

CRP’s proposed mitigation includes mining exclusion areas covering one fifth of the marine consent area to include sensitive and important seabed features and benthic communities, and trials to create areas of hard substrate to enable recolonisation of stony corals and other species.

“It is submitted that the greatest impacts and risks to the fishing industry and the fish that they rely on arise from their own unregulated bottom trawling, rather than a very small amount of seabed disturbance in an areas that is not important for fishing or spawning.”

Mr Winchester began his submissions saying phosphate, a natural mineral, is as essential to life as water, oxygen and carbon.  It cannot be manufactured, there is no synthetic substitute and New Zealand has no on-land sources, so all phosphate is imported, much from politically unstable parts of North Africa.

“The availability of a high quality, low cadmium local source of rock phosphate on the Chatham Rise makes this a strategic resource of national significance.”

He said the proposed dredging process is one of the most environmentally benign forms of mining practised anywhere in the world.  No overburden removal is required and no chemicals are introduced to the environment.  Damage is minimal and restricted almost entirely to the mined area. 

In contrast the environmental costs and potential damage of using an alternative supply of phosphate involves removing vast quantities of overburden, containing much higher levels of cadmium and - shipped from the other side of the world - leaving a large carbon footprint.

Mr Winchester said CRP is proposing a suite of conditions to deal with risks and effects including an adaptive management approach.

Chris Castle, Managing Director +64 21 55 81 85 or

Click Image below to read full submission: 

NZX Announcement: September Project Update

Dear Chatham Rock Phosphate shareholder or stakeholder,

This update has just been released by NZX.

Regards,

Chris Castle

Chief Executive Officer

Chatham Rock Phosphate Limited

Email: chris@crpl.co.nz

Cell: +64 21 558 185

Skype: phosphateking

www.rockphosphate.co.nz 

Update

15 September 2014

Pace not letting up

The pace and level of activities by the CRP team is at full throttle as we work on a number of fronts to advance the project.

Our first focus is ensuring the Marine Consent process proceeds as scheduled so we can get a decision by the Environmental Protection Authority’s decision-making committee before Christmas. 

The second is continuing to finance the current very high level of activity and the inevitable associated costs. We’re approaching the peak of our spending commitments – financing all of the charges associated with the Marine Consent process. 

All up we estimate our and the EPA’s costs (which CRP pays for) will be around $4 million.  These include all of the experts for CRP and the EPA and all of the associated staff, travel, venue and other costs.

Hence the need for more money

We have announced two successful capital raising tranches over recent weeks.  One was for $1.24 million and one for $1.22 million.   The shares were issued at NZD 0.12 per share (or the approximate foreign currency equivalent). In addition, for each share issued, one CRPOB $0.688 option was issued.

To enable all shareholders to participate at these current prices directors resolved to extend the offer on the same terms.   The share offer is in the ratio of two new shares for every 17 shares you currently hold, with one non-voting option granted for every new share. You will be sent documents telling you about your entitlements and the relevant time frames. 

We naturally encourage everyone to help us raise the money we need to complete the Marine Consent process.  We really appreciate the money you’ve contributed in the past and hope you take advantage of what we believe will be temporary exceptional value at these share price levels.

In addition to the offer to shareholders, qualifying habitual investors will be able to take up any shortfall of shares not subscribed for by shareholders within three months of the offer closing.

Merger Talks

You may have noticed that as part of the “cleansing notice” regarding the issue we advised we have been in discussions with a publicly quoted company with respect to a potential merger transaction.

We can’t say much more at this stage.  The discussions are at an early stage, on-going and at present no agreement has been reached - binding or non-binding - on the terms of such a transaction.   Rest assured, if and when we get to a position where these discussions progress to a documented stage, we’ll announce further details.

Evidence and queries

In late August we submitted all of our evidence from our 31 experts.  While some is technical, there is some quite readable information about the project so it’s worth having a good look around the relevant part of the EPA website devoted to our project. http://www.epa.govt.nz/EEZ/chatham_rock_phosphate/Pages/default.aspx

In addition to our evidence the submitter evidence was filed last Friday.

As well as the evidence from our expert witnesses, we completed the mammoth task of providing detailed answers to 62 queries from the EPA. Every new report and piece of evidence increases our confidence we have built the case to demonstrate to the Decision Making Committee why this project should be approved.

All of the pieces of the jigsaw are building a compelling picture to demonstrate the environmental impacts are comparatively minor or can be readily managed and the benefits – both environmental and economic – are significant for New Zealand.

Hearings underway next week

Public hearings get underway next Thursday 25 September, and the venue will mostly be at the Basin Reserve in Wellington.  If you get the chance feel free to pop in and see the action, even for a few hours.

This week caucusing or discussions between expert witnesses will seek to identify areas of agreement and outstanding areas of contention.

We’re not the only one

We were delighted to see Mexican based undersea phosphate project Don Diego file its environmental impact assessment (EIA) with the Mexican Secretary of Environment and Natural Resources. A response is expected in 60 business days.

This is a great step forward for the marine mining industry, demonstrating the industry has real momentum and that well-researched and considered undersea phosphate mining projects have a major part to play in ensuring the world’s food security.

As with CRP, Don Diego used experts in marine dredging, plume modeling, sound propagation, ecotoxicology, phosphate research and engineering for the environmental studies and scientific findings in the EIA.

A non-technical summary of the EIA is attached.

Last word

Finally, if you missed it, it’s worth reading an article written by business journalist Pattrick Smellie regarding the concerns we had involving the EPA’s issue of a staff report.  http://www.stuff.co.nz/business/opinion-analysis/10436122/Politics-of-mining-keep-digging

We remain concerned the staff report was premature, contained many inaccuracies, demonstrated bias and most importantly was delivered at a point in time when the EPA staff were fully aware that it could be destructive to our financing arrangements.

We’re conscious we have many international shareholders who don’t fully understand the New Zealand environment.  There were several international media reports saying the staff report was the final decision – which of course it was not.  

Reassuringly, numerous local and international stakeholders saw the EPA staff report for what it was and expressed their views in writing to several Ministers.

Much more could be said about this now but that can wait.

Notwithstanding the EPA staff sideshow we remain totally confident that our project will be granted (by the EPA Decision Making Committee, not by the support staff) a marine consent as a logical outcome arising from our multi-million dollar investment, our fact based and science supported approach, and several person-years of effort.  

Chris Castle, Managing Director

chris@crpl.co.nz or +64 21 55 81 85

NZX Announcement: Notice of Offer of Same Class Financial Products for Issue

Dear Chatham Rock Phosphate shareholder or stakeholder,

This announcement, which relates to the rights issue, was filed with NZX this morning.

Regards,

Chris Castle

Chief Executive Officer

Chatham Rock Phosphate Limited

Email: chris@crpl.co.nz

Cell: +64 21 558 185

Skype: phosphateking

www.rockphosphate.co.nz

Monday 8 September 2014

Client Market Services

NZX Limited

Level 1, NZX Centre

11 Cable Street

Wellington 6011

Notice of Offer of Same Class Financial Products for Issue

Chatham Rock Phosphate Limited (Chatham Rock) intends to undertake a pro-rata 2 for 17 renounceable rights offer for new ordinary shares in Chatham Rock (New Shares) to Chatham Rock’s eligible shareholders (those on the share register on the record date of 5pm, Wednesday 10 September 2014) with one option (New Option, in the same class as Chatham Rock’s listed CRPOB options) to be granted for every New Share allotted (the Offer).

Pursuant to clause 17(1)(a) of Schedule 1 of the Financial Markets Conduct (Phase 1) Regulations 2014 (Regulations) and clause 19 of Schedule 1 of the Financial Markets Conduct Act 2013 (FMCA), Chatham Rock advises that:

1.       The Offer is being made in reliance upon the exclusion in clause 19 of Schedule 1 of the FMCA and Chatham Rock is giving this notice (Cleansing Notice) under clause 17(1)(a) of Schedule 1 of the Regulations.

2.       As at the date of this Cleansing Notice, Chatham Rock is in compliance with:

(a)     the continuous disclosure obligations that apply to it in relation to Chatham Rock listed shares and options; and

(b)     its “financial reporting obligations” within the meaning set out in clause 17(4)

of Schedule 1 of the Regulations.

3.       As at the date of this Cleansing Notice, there is no information that is “excluded information” within the meaning set out in clause 17(4) of Schedule 1 of the Regulations, other than:

(a)     as announced to the market, the filed Marine Consent and all applicable documents available at:http://www.epa.govt.nz/EEZ/chatham_rock_phosphate/Pages/default.aspx; and

(b)     Chatham Rock has been in discussions with a publically quoted company with respect to a potential merger transaction. These discussions are at an early stage, on-going and at present no agreement has been reached - binding or non-binding - on the terms of such a transaction. Should these discussions progress to a documented stage a market announcement will be made giving further details.

4.       The potential effects that the Offer and the issue of New Shares and New Options will have on the “control” (within the meaning of clause 48 of Schedule 1 of the FMCA) of Chatham Rock and the consequences of those effects are as follows:

(a)     As at the date of this Cleansing Notice, the substantial security holders in Chatham Rock are Subsea Investments II LLC, Boskalis Offshore Subsea Contracting B.V, Odyssey Marine Exploration Incorporated and Aorere Resources Limited.

(b)     If all eligible shareholders take up their pro-rata entitlements to New Shares and New Options under the Offer, their percentage shareholding in Chatham Rock will remain the same and there will be no effect on the control of Chatham Rock (provided that the entitlements of any ineligible shareholders are taken up by parties not having the pre-Offer capacity to exercise “control”).

(c)      In some cases, shareholders with registered addresses outside of New Zealand and Australia may not be eligible to participate in the Offer (and their percentage shareholding will be diluted as a result of the issue of New Shares and New Options), due to the legal requirements of the relevant jurisdiction being unduly onerous for Chatham Rock to make the Offer in that jurisdiction (as provided for in NZAX Listing Rule 7.4.3(h)). However, Chatham Rock does not anticipate that the combined percentage interest of any ineligible shareholders is not likely to be sufficiently significant for its dilution to have a material effect on the control of Chatham Rock if all eligible shareholders take up their entitlements.

(d)     If some eligible shareholders do not take up their full entitlement, such shareholders' percentage shareholding will be reduced (relative to those who did take up their full entitlement), and Chatham Rock will be entitled to allocate that Shortfall to other parties who have taken up their full entitlement under the oversubscription facility.

(e)     In addition, if there is a Shortfall under the Offer (following any applications for additional New Shares and Options, as described above), Chatham Rock will be entitled to place the Shortfall to any persons (subject to complying with applicable legislative instruments and the NZX Listing Rules) within three (3) months of the Offer closing.

(f)      The New Options will not carry voting rights and will only impact upon control if and when they are exercised into ordinary shares.

(g)     Accordingly, the Offer is not expected to have any material effect or consequence on the control of Chatham Rock.

On behalf of the Board,

Chris Castle

Chief Executive Officer

Email: chris@crpl.co.nz

NZX Announcement: Allotment of Shares and Capital Raising Update

Dear Chatham Rock Phosphate shareholder or stakeholder,

This announcement has just been released by NZX.

Regards,

Chris Castle

Chief Executive Officer

Chatham Rock Phosphate Limited

Email: chris@crpl.co.nz

Cell: +64 21 558 185

Skype: phosphateking

www.rockphosphate.co.nz

5 September 2014

Allotment of Shares and Capital Raising Update

Chatham Rock Phosphate Limited (NZX: CRP) is pleased to advise that it has today raised a further NZD$1.24 million in new capital from qualified investors.

As previously announced to the market CRP is undertaking a rights issue on a 2 for 17 basis; each right granting its holder the right to subscribe for one ordinary share in CRP (and one new option to be granted for each share allotted). Rights trading is due to commence on Monday 8 September, 2014.

Shares have today been issued at NZD0.12 per share (or the approximate foreign currency equivalent). In addition, for each share issued, one CRPOB $0.688 option has been issued.

Full particulars of today’s allotment are set out below.

Chris Castle

Chief Executive

Email: chris@crpl.co.nz

NZX Announcement: CRP completes another milestone – filing evidence and answering queries

Dear Chatham Rock Phosphate shareholder or stakeholder,

This announcement has just been filed with NZX.  

Regards,

Chris Castle

Chief Executive Officer

Chatham Rock Phosphate Limited

Email: chris@crpl.co.nz

Cell: +64 21 558 185

Skype: phosphateking

www.rockphosphate.co.nz

Media Release

1 September 2014

CRP completes another milestone – filing evidence and answering queries

Chatham Rock Phosphate has achieved another major milestone by completing and filing evidence from 31 expert witnesses and answers to 62 queries from the Environmental Protection Authority.

CRP has applied for a marine consent to mine rock phosphate from an area of the seabed on the Chatham Rise, in the Pacific Ocean 450 km from New Zealand and 250 km from the Chatham Islands.  The area is within New Zealand’s Exclusive Economic Zone.

“It was a massive task and the quality of the work produced continues to demonstrate to the CRP board and management why this project is important for New Zealand – both economically and environmentally,” managing director Chris Castle said today.

The EPA's website now contains all of the evidence and answers to queries:

http://www.epa.govt.nz/EEZ/chatham_rock_phosphate/evidence/Pages/Applicants_evidence.aspx

http://www.epa.govt.nz/eez/EEZ000006/EEZ000006_Further_information_provided_by_CRP

Mr Castle said the quality and comprehensiveness of the evidence and the answers underscores the board’s confidence CRP has built the case to demonstrate to the decision-making committee this project should be approved.

“With every report and expert, we continue to demonstrate the environmental impacts are comparatively minor or can be readily managed and the benefits – both environmental and economic – are significant for New Zealand.”

The CRP team is now preparing for the start of hearings on 25 September, which includes caucusing or discussions between expert witnesses, in the week starting 15 September, to seek to identify areas of agreement and identify outstanding areas of contention. CRP is also planning the order of its witnesses given some are travelling from Europe and the United States, and to accommodate the timing of hearings in the Chatham Islands in the week starting 6 October. At this stage CRP anticipates hearings will last around 6 weeks.

Contact Chris Castle on +64 21 55 81 85 or chris@crpl.co.nz

NZX Announcement: Media Release - CRP gravely concerned at potential for bias in EPA staff report

Media Release

25 August  2014

CRP gravely concerned at potential for bias in EPA staff report

Chatham Rock Phosphate today announced it would be formally seeking the withdrawal of the Environmental Protection Authority’s staff report issued last week because of extremely worrying evidence which suggests the potential for bias.

CRP last week criticised both the content and timing of the EPA staff report on CRP's Marine Consent application.  Now a new and potentially more serious basis for concern about the validity of the report and its conclusions has emerged.  

CRP's Managing Director Chris Castle said today CRP considers the report to be potentially biased and therefore totally unreliable, and it intends to seek that the EPA staff report be formally withdrawn.  CRP will shortly make an application to the EPA's decision-making committee for that to occur.

"It has come to CRP's attention that one of the key authors of the EPA staff report appears to have been a signatory to a Greenpeace petition in 2010 seeking the Government permanently stop all plans to open up New Zealand's coastal waters to offshore oil drilling and stop any expansion of coal mining in New Zealand.   If this is the case, it raises very serious questions over the objectivity of the report and its conclusions.

"While I accept the subject matter of the petition does not refer directly to offshore mining projects such as ours, there is certainly a strong enough link between the subject matter of the petition and our project to raise an alarm.  This is further compounded by the fact that Greenpeace is a key submitter in opposition to CRP's marine consent application.  

“Any potential for a relationship with a submitter needs to be disclosed by EPA staff and, if any connection exists, the staff member simply should not be involved.

"We have asked the EPA to confirm whether the staff member was a signatory to the petition.  The EPA's response has been the staff member is not and has never been a financial member of Greenpeace and, while the individual does not recall whether or not they signed the petition, the staff member has conceded it is possible that they may have signed it.  

“We understand the staff member did confirm they have, from time to time, received communications from Greenpeace. We have asked the EPA to investigate the matter further, but the EPA advised it is satisfied with the individual's response.

"In the circumstances, that response is simply is not good enough.  A hazy memory about such important matters is not convincing, and we believe the only reasonable inference that can be drawn is the staff member was in fact a signatory to the petition.  

“If that is the case, it confirms our suspicions the report was not an objective or fair evaluation of the merits of CRP's proposal, quite apart from the other serious problems regarding accuracy, that we have identified with it.  

“It is absolutely vital in a public process like this the people involved in assessing our proposal are objective and there is no possibility of bias.  We do not have confidence this is the case and we believe there is a serious risk our application has not been fairly assessed.

"The only option is for the report to be formally withdrawn," said Mr Castle.

“This is an important issue for all public servants. The public must have confidence in their independence.

"While we understand it is already in the public domain, in our view there should be formal recognition the report has no value and will have no legal relevance to the rest of the marine consent process."  

An application to the EPA's decision-making committee responsible for CRP's application will be made shortly.  

"We are confident the decision making committee will share our concerns about the report and direct that it be withdrawn".

Mr Castle said CRP has identified numerous errors of fact in the report and the company also has concerns about conclusions drawn which conflict with expert evidence.

He said there is no reason for a staff report to contain any conclusions or recommendations as an input into the decision-making process.  “This is particularly unfair as the views of staff cannot be tested through the Marine Consent process because they do not give evidence.”

Mr Castle said there was no need for a second staff report, nor is there any need for any delay to the marine consent process as all relevant issues will be fully aired before the decision making committee.. 

“The process underway involves several weeks of evidence and discussions between interested parties.  That is the public process which matters, where anyone who has submitted on the proposal can be involved.”

Contact Chris Castle on +64 21 55 81 85 or chris@crpl.co.nz

NZX Announcement: Media Release - CRP welcomes EPA clarification on status of staff report

Dear Chatham Rock Phosphate shareholder or stakeholder,

This announcement has just been filed with NZX. I note that at the time of writing this the market value of the company has fallen by 60% since the EPA made their release yesterday.  

Regards, 

Chris Castle

Chief Executive Officer

Chatham Rock Phosphate Limited

Email: chris@crpl.co.nz

Cell: +64 21 558 185

Skype: phosphateking

www.rockphosphate.co.nz

Media Release

19 August  2014 

CRP welcomes EPA clarification on status of staff report

Chatham Rock Phosphate today welcomed a clarification issued by the Environmental Protection Authority regarding its staff report issued yesterday.

The EPA in its announcement today said the process for considering the application was still at an early stage.  “Further information on the application and its effects is to come from both the applicant, and in the form of evidence and submissions from other parties. Our assessment of that information has the potential to alter the recommendations made in our current Staff Report,” EPA General Manager of Applications and Assessment Sarah Gardner said.

She went on to say the staff report was not the decision on the application and the Decision-making Committee appointed by the EPA Board to hear and decide the application may make a different decision to that recommended by EPA staff.

Managing director Chris Castle reiterated yesterday’s comment that the staff report was premature and would have had more value had the information requested by the EPA been provided and taken into account.  Having said that, Mr Castle acknowledged that CRP is in a statutory process and it imposes pressures on everyone involved, including the EPA.

Mr Castle said CRP was in the process of completing evidence and providing responses to 62 questions – some of which required detailed consideration and further research. 

He noted the staff report was a snapshot, based on the information available at the time.  The cut-off for the information was 1 August and so it did not include considerable information that has since been supplied and was continuing to be gathered.

“Based on the information we are amassing, and the evidence that is near completion, we remain confident we can provide a compelling case for the grant of a Marine Consent later this year. We also note the EPA’s comment that the staff are not the decision makers – the Decision Making Committee is.

“We believe we have provided and will provide the necessary information to address all of the issues raised in the report, and that the Decision Making Committee will have the evidence it requires to enable a Marine Consent to be granted.”

Mr Castle said CRP remained confident the company has done the work to show it can undertake its mining operations in a sustainable way, and the Marine Consent process would demonstrate this.

The EPA media release follows:

EPA issues preliminary report on Chatham Rock Phosphate application

The Environmental Protection Authority has issued a preliminary report on the marine consent application by Chatham Rock Phosphate Ltd (CRP) for its phosphate mining project on the Chatham Rise.

The report, which is an input into the decision-making process for determining the application, evaluates the information that CRP has provided to the EPA as at 7 August 2014.

It provides the EPA’s staff view on the potential adverse effects of the proposed mining operations and discusses the matters which should be addressed by the Decision-making Committee when making its decision on the application.

EPA General Manager of Applications and Assessment Sarah Gardner said it was important to note that the process for considering the application was still at an early stage.

“Further information on the application and its effects is to come from both the applicant, and in the form of evidence and submissions from other parties. Our assessment of that information has the potential to alter the recommendations made in our current Staff Report.” 

Mrs Gardner said that on the face of the application at this time, and without all of the information requested of CRP yet being available, the EPA was currently unable to recommend that the application be granted.

“However, this is not the decision on the application and the Decision-making Committee appointed by the EPA Board to hear and decide the application may make a different decision to that recommended by EPA staff.”

The hearing on the CRP application by the Decision-making Committee is scheduled to start on 25 September with a decision due around 18 December 2014.

Background notes: On 10 July, the Hearing Procedures issued by the Decision-making Committee stated the Staff Report would be released on 4 August. Following a request from CRP the EPA agreed to delay the release of the report to 18 August. The EPA advised all parties on 11 August that it would be released on 18 August. 

Contact Chris Castle on +64 21 55 81 85 or chris@crpl.co.nz

NZX Announcement: Media Release - EPA staff report premature

Media Release

18 August  2014

EPA staff report premature

The Environmental Protection Authority staff report issued today is premature and should have not have been issued until the information requested of Chatham Rock Phosphate was provided, managing director Chris Castle said today.

“In order to be a fair and balanced report, it should have taken account of information we either recently provided or is still yet to be prepared.”

Mr Castle said CRP would never expect a report at this stage in the process to recommend approval.  “Otherwise what is the point of all of the additional information, the caucusing of expert witnesses, and the weeks of hearings that are still ahead. 

“Of course there are uncertainties.  That’s what this whole Marine Consent process is designed to identify and clarify, and it is important to remember that the decision will be made by an independent committee rather than EPA staff.”

Mr Castle said the key sentence in the report is: “EPA staff are not currently able to recommend granting this marine consent on the face of CRP's application as it stands, but recognises that there is more information to be provided, which may change our view."

“I should hope so – otherwise the value of a hearing process is undermined.

“However I do think it was unnecessary for the staff report to come out prior to us completing the additional information that was requested.  I understand the report should not be too late in the process (as it was with Trans-Tasman Resources) but I think in this case it was too early.

“My other key concern is the EPA issued the report without any reference to us, in the middle of a business day.  We are a Stock Exchange listed company and need to ensure our investors are continually informed.  We had expected that the EPA understood the issues that would be caused by their releasing a huge swathe of information without us having the opportunity to assess the information and advise our shareholders.

“While the EEZ Act contains a prescribed process for dealing with Marine Consent applications,  the EPA should be more careful to consider the commercial position of applicants when it follows those processes.

“We remain confident we have done the work to show we can undertake our mining operations in a sustainable way, and we believe the Marine Consent process will demonstrate this.

“I’d prefer to see a process that actually identifies how we can undertake seabed mining, rather than say why we shouldn’t, which I believe fits with the purpose of the EEZ legislation – that is to provide a way of enabling sustainable development.”

Contact Chris Castle on +64 21 55 81 85 or chris@crpl.co.nz

Chatham issues August operations update

Update

August 2014

We’re well on the way

It’s been a hugely busy time at Chatham Rock Phosphate HQ with the team working in a wide variety of areas.

You may be aware we operate as a virtual team with only three people actually spending much time at the Straterra office on the Terrace.    The rest of the team works either for other organisations and provide input as we need it, or they work remotely from other parts of the country and the world.

Email and phone are our lifelines.  We’re in daily contact with up to 50 people around the world on any day, we’re in weekly phone contact with our technical partner Boskalis in Holland and we’re continuing to share progress with everyone from investors and media to government agencies and other stakeholders.

Marine Consent

Since our marine consent application was accepted as complete at the end of May we’ve been in a flurry of activity.  The first step was receiving the first of a myriad of enquiries from the EPA to provide further information or explanation to the hefty 450-page application and its accompanying 35 reports.  Sometimes it has involved clarifying something and other times it’s required us to do more work.

As we’ve worked with submitters who have raised questions or potential concerns we’ve also sought more information from scientists or other experts.  Since early June the EPA has come back with two more lots of questions we’re busy working on.

In the two months since the application was lodged we’ve had submissions from nearly 300 groups and individuals, of which about a third were in favour, and two thirds not.  We were absolutely delighted at the high proportion of support – with these kinds of applications you almost always only hear from the people who don’t like something, rather than those who do.

Significantly the Crown chose to make a detailed (neutral) submission with a very can-do approach – i.e. it suggested ways of overcoming concerns, rather than simply why we shouldn’t do it, just because it hasn’t been done before.

The hearings are due to run mostly over September-October and will be held primarily in Wellington, with sessions also on Chatham Island and in Hamilton, to make it easier for those submitters who asked to be heard.

Marketing

While most of our work is focused on the consent process, there’s a lot of other activity too.

We’ve been thinking ahead to when we are actually in production.  A lot of work has already been done on potential markets and we’ve identified at least six countries in Asia that would use our product for four different uses.

Managing that work is our Vice President Sales and Strategy Najib Moutia, a Canadian-based Moroccan who for 30 years worked for the world’s biggest phosphate producer in his home country, building its Asia Pacific business from 0 to 90% market share.

As part of building those potential customers – and to provide some (positive!) cash flow before we get into production, we’re looking at undertaking some phosphate trading.  We’re also testing some rock from companies with whom we are building alliances and considering the best uses for those products.

While any trading will be done at the wholesale end – and we see that as our primary market – we are not ignoring the possibility of moving up the value chain.

We know there are hugely greater potential returns in selling small bags of organic direct application phosphate rock from garden centres and DIY stores.  So we’re researching what is currently sold and what the potential might be, starting with New Zealand, but also potentially overseas.

We’ve employed a market researcher to talk to the people in the industry on a fact-finding mission.  The results so far are fascinating.  We’re only at the start of a long process in building our business plan. However we do think there is huge potential for a natural New Zealand product, especially given the rising concerns about the current mix of chemical fertilisers on offer.

Boskalis

The relationship with our technical partner Boskalis continues to be a fantastic asset for CRP.  Its 100-plus years of experience in the marine dredging industry and its wealth of expertise in a wide range of areas including engineering and hydronamics are invaluable.  Boskalis works in 75 countries around the world and environmental and existing user concerns are always the primary focus.  The company has countless examples of how it has designed a way of doing something to anticipate a potential concern – it is simply the way it does business.

Three senior managers including project sponsor and senior executive Ko de Blaeij are coming to New Zealand to give evidence at the marine consent hearings.  Ko stepped down from the CRP board recently but remains very involved in the project and will lead our expert panel which guides us through strategic decisions that have a technical focus.

We really value the energy, expertise and continuing support we receive from Boskalis.

We expect to make considerable progress on these and other aspects of our business and will be in touch with more, regular updates.

Chris Castle, Managing Director

chris@crpl.co.nz or +64 (0) 21 55 81 85