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Former Attorney General of Papua New Guinea warns potential investors - Nautilus is a risky deal!

Source: 
Centre for Environmental Law and Community Rights – Solwara Warriors

(Papua New Guinea) Sir Arnold Amet, former Papua New Guinean Attorney General and Minister for Justice has joined the growing opposition against Nautilus Minerals Solwara 1 deep sea mining project.

"It is understandable that Nautilus shareholders want to protect their own financial interests but new investors should beware - the Solwara 1 project is very high risk”, said Sir Amet.

“The muddy puddle at the so-called test site at Motukea Island is not fit for purpose. It will not provide any evidence that these machines won't malfunction at the intended operating depth of 1.6 km.  The hulks are already deteriorating in our tropical conditions.”

Canadian company Nautilus is still desperately seeking funds for its flagship Solwara 1 deep sea mining project. Commercial operation has been delayed year after year since it received its licence to mine the floor of the Bismarck sea in 2011.

In a last ditch bid to finance Solwara 1, Nautilus's two largest shareholders have now formed a new company whose sole job is to secure funding for the Solwara 1 project [1].   

“Nautilus is not a professional outfit,” stated Sir Amet.

“I am concerned that the Papua New Guinean Government has bought a 15% share in a dodgy project, any operating disasters by Nautilus Minerals will quickly translate into an environmental catastrophe for the Bismarck Sea and its communities. The associated financial liabilities will be huge.”

In recent statements the machine operators of the Solwara 1 project voiced their fears about the safety of operating the equipment 1.6 km under the surface and only 25 km off the coast of New Ireland Province [2].

In their Annual information forms lodged with Canadian Securities, Nautilus describes Solwara 1 as an experiment - both the environmental impacts and profits are complete unknown [3]. Nautilus has declined to conduct a preliminary economic assessment, pre-feasibility study or feasibility study – as per conventional industry practice.

"With this high level of environmental and financial risk, The PNG Government should never have issued Nautilus with its licence. It was issued even though PNG has no legal framework to regulate such a mine and we have no capacity to monitor its impacts. The legal context for the licensing Solwara 1 is highly questionable," continued Sir Amet.

Coastal communities in Papua New Guinea are holding the PNG Government to account. Formal letters have been submitted to the Ministry of Mining and Ministry of Environment and Conservation requesting that key documents relating to the licensing of the Solwara 1 project be made public. They have given the PNG Government until October 18 to respond or face the prospect of legal proceedings [4].  

For further information:

Notes

[1] Nautilus signs funding mandate with major shareholders, Nautilus Minerals press release, October 11 2017, http://www.nautilusminerals.com/irm/PDF/1929_0/Nautilussignsfundingmandatewithmajorshareholders

[2] PNGeans to pioneer new mining technology, Post Courier, 28 September 2017, http://postcourier.com.pg/pngeans-pioneer-new-mining-technology/

[3] See sections on Risk factors in Annual information forms for financial years 2015 and 2016. For example:

"Our operations are speculative due to the high-risk nature of business related to the exploration and acquisition of rights to potential mineable deposits of metals. These risk factors could materially affect the Company’s future results and could cause actual events to differ materially from those described in forward-looking statements relating to our Company." (FY 2016, p 52)

"... Performance, availability, reliability, maintenance, wear and life of equipment are unknown. There can be no guarantee that sub-sea engineering and recovery systems can be developed or if developed, will be employable in a commercially-viable manner."  (FY 2015, p54)

"... while Company studies have indicated a low likelihood of risk to the aquatic environment from mining activities, the actual impact of any SMS [seafloor massive sulphide] mining operations on the environment has yet to be determined.” (FY 2015, p61)

"Nautilus has not completed and does not intend to complete a preliminary economic assessment, pre-feasibility study or feasibility study before completing the construction and first deployment of the Seafloor Production System at the Solwara 1 Project.”  

"No independent Qualified Person has confirmed the amount of these costs or recommended that these costs be incurred. There is significant risk with this approach and no assurance can be given that the Seafloor Production System, if fully funded and completed for deployment at the Solwara 1 Project, will successfully demonstrate that seafloor resource development is commercially viable." (FY 15, p52)

[4] Constitutional Right to Key Documents on Experimental Seabed Mining, Centre for Environmental Law and Community Rights (CELCoR) and Alliance of Solwara Warriors media release, 3 October 2017, http://www.deepseaminingoutofourdepth.org/constitutional-right-to-key-documents-on-experimental-seabed-mining/