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maui4marko · 03-21-2015, 06:46 AM

Just as the oil industry shifted exploration and production offshore in the 1970s, could the mining industry be set to follow nearly 50 years later and generate an entire new business stream for shipyards and dry bulk owners?

In 1873, the sailing ship Challenger discovered polymetallic nodules on the seabed made up of almost pure manganese oxide and, in so doing, opened the prospect of deepsea mining for the first time.

Today, the technology is in place to excavate, with all eyes on the Solawara 1 project run by Nautilus Minerals to mine for gold and copper at a depth of 1,600 metres off the north-eastern coast of Papua New Guinea in the Bismarck Sea.

The seabed-mining vessel ordered for the project at Fujian Mawei Shipbuilding in China late last year could turn out to be more than just a one-off and become the first of dozens of such orders. That is if the deepsea-mining ventures now at the development stage get the financial and regulatory green lights.

The 227-metre-long, 40-metre-wide unit will be delivered in 2017 and is the equivalent of the oil industry’s floating production, storage and offloading (FPSO) vessel.

It digs out minerals from the seabed, extracts seawater from the slurry, separates the ore and stores it before loading it onto handysize bulkers.

The seabed-mining vessel expects to excavate around 1.3 million tonnes of ore per year once production begins in 2018.

It is being employed on a charter basis from Dubai-based Marine Assets Corp by the developers at an eye-watering $199,910 per day for a period of five years, Nautilus Minerals has revealed.

The vessel will be located around 30 kilometres (18.6 miles) from shore and so has been equipped to meet the toughest marine environmental regulations. Its Rolls-Royce engine also fully complies with nitrogen oxide emission limits.

A number of traditional dry bulk cargoes have been discovered on the seabed, such as copper and nickel, as well as deposits of other minerals, including gold, zinc, phosphate, iron, manganese and cobalt.

Nautilus Minerals chief executive Mike Johnston was recently quoted by the Financial Times as saying: “I believe 30% of the world’s mineral production could, in the future, be mined from the sea floor.”

A key advantage of deepsea mining is that the high mineral content of the ore could be more than 10% in the case of copper compared to less than 1% from that mined on land. The deepsea projects also do not require anywhere near the high capital expenditure in transport and infrastructure often invested in land-based mining.

So far, the United Nations’s International Seabed Authority (ISA) has granted 26 exploration licences covering 1.2 million square kilometres (463,320 square miles) of the world’s oceans, mainly concentrated in the southern Pacific, to a combination of government-backed organisations and private companies.

The most recent licence granted by the ISA is typical of many of the projects now under way. Earlier this month, the ISA awarded the Ministry of Natural Resources and Environment of the Russian Federation a 15-year contract to explore for cobalt in the Pacific Ocean’s Magellan Mountains.

Deepsea mining could make even the smallest of nations rich. Around 10 billion tonnes of manganese nodules have been discovered off the Cook Islands, which, along with many other countries, has developed its own deepsea-mining law to cope with the expected developments.

The main barrier to the deepsea-mining industry appears to come from the environmental lobby groups. Although vessels such as the one Nautilus Minerals is building at Fujian Mawei can meet all International Maritime Organisation (IMO) requirements, it is the damage that its specially developed “cutters” could do to the marine ecosystem that has Greenpeace and others up in arms.

In a worrying sign for the development of an offshore-mining industry, New Zealand recently rejected an application from Chatham Rock Phosphate for a project off Canterbury, in the south island, on environmental protection grounds.

Not only has the decision being viewed as a setback for the developers but also as damaging the prospects of attracting investment capital to other deepsea mining projects around the world.

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