Papua New Guinea sea floor mining project in jeopardy

12 December 2012

Source: The Guardian

Author: Reuters

A dispute between Papua New Guinea and Canada's Nautilus Minerals threatens to sink plans to mine gold and other metals for the first time from the ocean floor.

It could also work against Papua New Guinea's efforts to restore faith in its vast resources potential and entice more foreign companies to follow the likes of Exxon Mobil, Newcrest Mining and Barrick Gold and invest billions of dollars in resource projects.

In the ground-breaking venture, Nautilus hopes to send robots a mile under water to mine the sea floor near hydrothermal vents that deposit copper, gold and other minerals.

Hungry for foreign investment, Papua New Guinea, a nation of 7 million spread, agreed in 2011 to pay 30% of the costs to build the Solwara 1 project in the Bismarck Sea, which Nautilus said amounts to $80m so far.

But in June, the government's investment arm, Petromin, said it was terminating the agreement. Without the funds, Nautilus says it cannot afford to proceed and the matter is now in arbitration in Australia under the United Nations Commission on International Trade Law (Unictral).

For more, go to: http://www.guardian.co.uk/environment/2012/dec/12/papua-new-guinea-sea-floor-mining