Stuff NZ article - Fish v phosphate: Corporate sparring in action

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OPINION: After much squawking, the Government will allow fishing enthusiasts to take seven snapper, rather than nine, when they head out in the boat.

A new recreational limit of three snapper had been proposed but the white-hot anger of weekend anglers soon saw to that. Now, those same anglers will, unsustainably, deplete snapper stocks.

The little guy has won - and snapper don't vote. No wonder we are worried about our 100% Pure brand.

The commercial fishing industry - blameless, in that it is catching to its regulated snapper limits - copped a lot of nasty flak, nonetheless. That is the trouble with being the fishing industry.

No-one thinks much of you, even when you try your best to protect the environment through the quota management system, still world-leading 30 years on.

Being kicked around unfairly seems to have rubbed off on parts of the fishing industry itself.

The unusually vehement attack by the Deep Water Group, representing deep-sea fishing companies, on Chatham Rock Phosphate's mining plan for the Chatham Rise is a case in point.

Corporate arm-wrestling is more usually resolved out of the public eye by commercial players who respect one another's desire to create wealth and have no desire to destroy value without good cause.

CRP wants to hoover up about 30 square kilometres a year of seabed on the Chatham Rise to remove valuable phosphate nodules embedded in the sediment, returning about 85 per cent of what it scoops up to the sea floor.

It would provide an indigenous source for the $100 million of phosphate imported annually for New Zealand farms from Morocco, creating economic productivity, balance of payments benefits and, potentially, a new export industry.

"We wouldn't consider extracting phosphate nodules from a very limited area of the Chatham Rise if we expected it to cause more than very minor environmental impacts," said CRP's aggrieved chief executive, Chris Castle, in an open letter this week to Green MP Gareth Hughes.

But the fishing industry is dead-scared that depositing spoil back on the ocean floor will create plumes of sediment that could affect the health of the surrounding ocean - a main feeding ground for juvenile hoki (one of the industry's most valuable fisheries).

Castle argues he is targeting a relatively small 30 sq km of seabed every year for 15 years, whereas the fishing industry is bottom-trawling about 119,000 sq km in unprotected areas of the Chatham Rise annually, in perpetuity.

Both sides claim they are misunderstood. The fishing industry says bottom-trawling is really only "bottom-skimming". CRP says its multimillion-dollar investment in understanding local ecology and environmental impacts means the two should be able to co-exist.

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Environmental lobbies that are fans of neither bottom-trawling nor deep sea mining are automatic winners in this corporate tit-for-tat.

While Hughes has lined up with fishing interests against CRP, they are, at best, fairweather friends - especially as Hughes' biggest concern is reportedly the destruction of sea floor corals.

This concern appears better founded than fears for juvenile hoki.

For a start, mining would kill everything that lives on the sea floor in the sea floor mining blocks.

After all, that is what mining does, wherever it happens. Fish can move away. Coral can't.

And while the mining blocks are small total areas, CRP's modelling shows sediment can drift up to 80km on ocean currents, although it should settle at a thickness of half a millimetre or less for most of that area. Anything above 1mm could be bad news for corals but not for fish stocks.

Most of that sediment would settle in the 820 sq km mining licence area CRP will apply for - close to 10 per cent of the benthic protected area where the phosphate is located.

The fact that CRP's proposal is inside an area protected from bottom-trawling creates a serious perception issue for Castle. The Deep Water Group's executive director, George Clement, likes to describe benthic protected areas as "underwater national parks" and "parts of the conservation estate", and says the fishing industry made "the difficult call" to stop bottom-trawling in these areas.

None of these claims are strictly true.

The benthic protected areas are fisheries exclusion zones - chosen because the fishing industry did not fish there anyway.

In principle, seabed mining is not prohibited. However, it gives both concerned fishermen and environmentalists a big hook on which to hang their objections, long before CRP's formal consent application gets in front of the Environment Protection Authority, the new agency regulating the exclusive economic zone.

CRP is a small, lightly capitalised company, which has done well to bring aboard its joint venture partner, Dutch seabed mining experts Boskalis, but it needs to keep tapping investors to fund its plans. These could scatter like reef fish at enough signs of trouble.

That would be a shame. CRP's plan is bold and potentially valuable to New Zealand. It deserves the opportunity to be considered with formality and care by the authority, not decapitated in the court of public opinion by a commercial competitor for resources.

 

Open letter to Gareth Hughes, Green MP

Dear Chatham Rock Phosphate shareholder,

This letter has just been sent to Green MP Gareth Hughes, filed with NZX and sent to the media.

Regards,

Chris Castle

CEO
Chatham Rock Phosphate Limited
P.O. Box 231, Takaka 7142
Mobile: +64 21 558 185
chris@crpl.co.nz
Skype: phosphateking
www.rockphosphate.co.nz

17 September 2013 

Open letter to Gareth Hughes, Green MP

Dear Gareth

I was very disappointed to see you had aligned yourself publicly with the bottom trawling industry in a news item on TV3 at the weekend.

In our briefing to you last year you indicated you had not reached any conclusion about the merits of our project. I would have thought that you would make an informed decision, including discussion of your concerns with us, before going public for the sake of a TV sound bite.

You have publicly said you are not against mining per se and will evaluate each project on its merits. We wonder how much faith to put in that statement if the evaluation is based on so little consultation and so few facts.   If you have ruled out this mining project as well as countless others, are there any you do support?

We’re astonished you have formed such a negative opinion about our project given the compelling potential environmental and economic benefits it offers and its minimal environmental impacts.

To remind you:

1. Chatham Rise rock phosphate, as an ultra-low cadmium direct-application fertiliser, has proven to be as effective as processed fertilisers while reducing run-off effects on New Zealand waterways by up to 80%. 

2. This resource provides fertiliser security for farming by providing a local alternative source.  Most rock phosphate used to make fertiliser now is imported from Morocco.

3. Moroccan rock phosphate is high in cadmium, involves high transport costs and has a significant carbon footprint.

4. New Zealand is predicted to be $900 million richer as a result of our new industry and we’ll be generating annual exports or import substitution of $300 million, plus supporting farming, our biggest earner.

5. By area, the economic value of the phosphate resource is 500 times greater than fishing; it is expected to yield $9.1 million per km2. In contrast, bottom trawling yields less than $20,000 per km2.

So while our operations will have some environmental impacts, they also offer very significant environmental and economic benefits.

The TV3 news item noted your alliance with the fishing industry is an unlikely one.  I agree, given bottom trawling’s massive environmental impacts and lack of environmental oversight.

Our proposed mining operation is subject to a rigorous environmental evaluation and monitoring process. The story that should be getting your attention is not the potential environmental impact of our project, but the freedom of the fishing industry to devastate as much of our EEZ as they like (currently about 50,000 km2 per year, or 385,032 km2 or 9.3% of the EEZ since 1989) with no environmental oversight or monitoring.

We wouldn’t consider extracting phosphate nodules from a very limited area of the Chatham Rise if we expected it to cause more than very minor environmental impacts. Our operations will lift the top 30cm of sandy silt and redeposit 85% of it on the same area of seabed after extracting the nodules. Modelling indicates the material returned will not be widely dispersed, and the sediment that doesn’t immediately settle will rapidly dilute to insignificant levels.

Our draft environmental impact assessment (EIA), supported by more than 30 expert reports, has identified no long-term impacts on key spawning, juvenile and young fish habitat. Any potential impacts are predicted to be confined to our limited extraction areas, and are short-term, reversible, and of low environmental risk. 

But while bottom trawling – ploughing vast tracts of the EEZ seabed decade after decade - requires no environmental consents, our project needs a mining licence and a marine consent. These cost millions of dollars, require years of research, consultation and official process, and involve full public scrutiny.

Chatham’s planned 15-year extraction project will touch a total of 450 km2, far less than 1% of the Chatham Rise.  In contrast, over the same period fishing will bottom trawl 750,000 km2, about three times the size of New Zealand.

Year after year, weighted nets scrape about 50,000 km2 of seabed, with bottom-dwelling animals disturbed or destroyed – mostly repeatedly so areas never have the chance to regenerate.  Up to 3,000 km2 of new territory is disturbed annually - an environmental impact 100 times greater than predicted for phosphate extraction.  Each year we plan to touch just 30 km2.

Scientific research shows that hoki spawning is concentrated on the West Coast of the South Island and in Cook Strait, and juvenile growth occurs over the entire 189,000 km2 rise. The annual fish trawl footprint on just the Chatham Rise during the 2009-10 fishing year was 19,051 km2.

The Deep Water Group members therefore already know they can continually disturb the ecosystem of 10% of the Chatham Rise area without harming juvenile fish stocks.  Chatham’s extra annual 30 km2 are likely to have no significant additional effect on the hoki fishery.

In summary, fishing destroys the benthic habitats of 100 times the area of previously untouched sea floor every year than we plan to, and every year fishing stops regeneration on an area of seafloor almost 2,000 times greater than our planned area of impact.

Thanks partly to Chatham’s $20 million investment, the rise’s benthic environment is now one of the best-known parts of our marine territory, and this information can now inform resource and environmental management decisions, possibly including modifying the location of benthic protection areas.  We’ve spent three years collecting data on oceanographic conditions (tides, currents, turbidity), benthic life, and analysing the impacts of disturbances on the seafloor and in the water column so we can design a mining system and operational plan that minimises environmental impacts and protects areas of benthic habitat.  

Rather than being of environmental concern, ours is a project of national significance offering significant economic and environmental benefits.

A word or two about BPAs

Benthic Protection Areas were promoted by the fishing industry, for the fishing industry, and were specifically designed to avoid fishing areas, especially those relating to bottom trawling. BPAs include a representative sample of benthic habitats, spread geographically to ensure adequate latitudinal and longitudinal variation.  The map shows how they avoid bottom- trawling areas.

BPAs were designed without regard for New Zealand’s other important natural resources such as rock phosphate or massive sulphides. 

BPAs were implemented to protect benthic biodiversity, not fish spawning grounds or nurseries, though that may be a side benefit for some species.

BPAs are only covered by fisheries legislation.  They do not relate to other legislation covering other ocean activities, such as the newly enacted EEZ legislation, which expressly excludes any direct reference to BPAs. Consideration of the relative importance of BPA’s will be part of the environmental impact assessment process managed by the Environmental Protection Authority.

The fishing industry also used the introduction of the BPAs to substantially reduce its monitoring costs, even though establishing BPAs made no difference to its ability to bottom trawl in the vast majority of the EEZ.  In recognition of the contribution BPAs would make to marine protection, the government agreed any research relating to the potential effects of bottom trawling on the benthic environment or its biodiversity should be two-thirds Crown funded and one-third industry funded.

Chris Castle, Managing Director Chatham Rock Phosphate

Attached: graphic showing the fish bottom trawl footprint of the EEZ prior to establishing the BPAs

Map.JPG

Allotment of Shares and Options

9 September 2013

Chatham Rock Phosphate Limited (NZX: CRP) advises that it has today undertaken placements at $0.30 per share and issued further CRPOB options.

CRP is presently undertaking a private capital raising offer to qualified investors which has the following key features:

  • CRP agrees an amount of shares to be subscribed for by an investor in aggregate.
  • Half of the shares are subscribed for at an issue price of $0.30 per share (Tranche One).
  • The investor commits to subscribing for the balance of the shares at $0.35 per share within 2 weeks of the Company being granted a mining licence in respect of its Chatham Rise phosphorites project (Tranche Two).
  • For every two shares subscribed for under Tranche One and Tranche Two, one option (CRPOB) is also allotted to the investor.

CRP is pleased to advise that it has entered investment agreements with qualified investors whereby a total of approximately $900,000 in new capital has been committed under this offering structure. As a result CRP is today allotting the Tranche One component of this amount representing approximately $400,000 in new capital.

Chris Castle

Chief Executive Officer

Email: chris@crpl.co.nz

   

Class of security:                           Ordinary shares

 

                                                      Options (CRPOB)

     

ISIN:                                               NZWENE0003S0

 

                                                      NZCRPE0001S3

     

Number issued:                              1,364,008 ordinary shares

 

                                                       682,004 options

     

Issue price:                                     $0.30 per ordinary share

     

Payment in cash:                            Yes

     

Fully paid:                                        Yes

     

Percentage of class:                        0.97% of shares

 

                                                        45.44% of options

     

Purpose of the issue:                       For working capital purposes towards   permitting of                                                         the Chatham Rise phosphorites project

     

Authority for the issue:                     Board resolutions

     

Date of issue:                                   9 September 2013

     

Total number of securities on issue

  following allotments:                        141,633,184 ordinary shares

 

                                                         2,182,938 options

 

 

Media Release: Low impact and high value; seabed rock phosphate is of national significance

3 September 2013 

Chatham Rock Phosphate today refuted the misinformation media campaign being run by the Deep Water Group and questioned fish trawling’s environmental record.

In media articles George Clement of the Deep Water Group has described Chatham’s proposal to extract rock phosphate as a potential environmental “catastrophe”.

“Such descriptions could be applied to fishing, when you think about the vast area of sea floor trawling disturbs,” Managing Director Chris Castle said.

"Chatham's planned 15-year extraction project will touch a total of 450 km2, far less than 1% of the Chatham Rise. Mr Clement estimates that's about sevent times the size of Wellington harbour.

“In contrast, over the same period fishing will bottom trawl 750,000 km2, about three times the size of New Zealand. Year after year, weighted nets scrape 50,000 km2 of seabed, with bottom-dwelling animals disturbed or destroyed.  Up to 3000 km2 of new territory is disturbed annually - an environmental impact 100 times greater than predicted for phosphate extraction.”

Mr Castle said Chatham has talked to the DWG for three years. 

“We’ve given them huge amounts of information, scientific reports and models showing temporary and very localised impacts on adjacent sea floor and water column. At their request we paid for an independent review of the modelling.  They expressed cautious support for our project for most of that period. Recently the attitude of some members has changed, with no willingness to discuss their concerns.

“We wouldn’t consider extracting phosphate nodules from the Chatham Rise if it caused more than very minor environmental impacts.”

He said Chatham’s operations simply lift the top 30cm of sandy silt and redeposit 85% of it carefully on the same seabed after extracting the nodules – the net effect is selected areas of seabed are lowered about 5cm. Modelling indicates the material returned will not be widely dispersed, and the sediment that doesn’t immediately settle will rapidly dilute to insignificant levels.

“Our draft environmental impact assessment (EIA), supported by 30-plus expert reports, has identified no long-term impacts on key spawning, juvenile and young fish habitat. Any potential impacts are confined to our limited extraction areas, and are short-term, reversible, and of low environmental risk. “

He also notes the fundamentals of Chatham’s proposed method are routinely used in dredging around the world.  The only new aspect is undertaking this work at 400m. The operations will be intermittent (3 days in every 10 day cycle) and spread among geographically separate locations within the licence area.

“But while bottom trawling – ploughing vast tracts of the EEZ seabed decade after decade - requires no environmental consents, our project needs a mining licence and a marine consent. These cost millions of dollars, require years of research, consultation and official process, and involve full public scrutiny.

“The annual fish trawl footprint on just the Chatham Rise during the 2009-10 fishing year was 19,051 km2.  As hoki spawning and growth occurs over the entire 189,000 km2  Rise, DWG already know they can continually bottom-trawl 10% of the area without harming juvenile fish stocks, so Chatham’s extra annual 30 km2  is of little significance.”

Mr Castle said New Zealand is predicted to be $900 million richer as a result of the new phosphate industry and Chatham will be generating annual exports or import substitution of $300 million, plus supporting farming, our biggest earner.

By area, the economic value of the phosphate resource is 500 times greater than fishing; expected to yield $9.1 million per km2. Bottom trawling yields less than $20,000 per km2.

“The benthic protection areas, of which the fishing industry is so proud, were established to preserve areas of sea floor not already affected by bottom trawling. They were determined without considering the economic importance of resources such as rock phosphate.

“Thanks partly to Chatham’s $20 million investment, the Rise benthic environment is now one of the best known parts of our marine territory, and can now inform resource and environmental management decisions, possibly including modifying those benthic areas.

“We’ve spent three years collecting data on oceanographic conditions (tides, currents, turbidity), benthic life, and analysing the impacts of disturbances on the seafloor and in the water column so we can minimise impacts and protect areas of benthic habitat.”  

Mr Castle said this project is important to provide fertiliser security for farming.  Most rock phosphate used to make fertiliser now is imported from Morocco. It’s 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 proven to be as effective as processed fertilisers while reducing run-off effects on New Zealand waterways by up to 80%. 

Rather than being an “environmental catastrophe”, it’s a project of national significance offering significant economic and environmental benefits.

For further information contact Chris Castle on 021 55 81 85 or email chris@crpl.co.nz

 

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