A dispute between Papua New Guinea and a Canadian company has put an innovative sea mining project on hold. The CEO of Nautilus Minerals announced this week that the company has had to suspend operations because the PNG government has pulled out of a funding agreement.
The undersea venture hopes to use robots to mine gold and other metals for the first time from deep beneath the ocean floor.
Back in 2011, the PNG government had agreed to pay 30 per cent of the costs to build the Solwara 1 project in the Bismark Sea, which Nautilus said amounts to $80-million (U.S.) so far.
But in June, the Globe and Mail reports that the government’s investment arm, Petromin, said it was terminating the agreement. And without the funds, Nautilus says it cannot afford to go ahead with the project. The case is reportedly now in arbitration in Australia under The United Nations Commission on International Trade Law.
The newspaper also reports that Papua New Guinea has been hungry for foreign investment. But this latest hiccup with Nautilus could work against the nation’s efforts to entice foreign companies to partner up in future resource projects.
Nautilus’s shares have reportedly dropped 60 per cent since it said in mid-November it was laying off 60 workers and halting assembly work on the project to save cash. The Globe and Mail reports another round of job losses could follow this week if a resolution cannot be reached.
The project has had its share of furious criticism from environmental groups around the world. Several organizations have conducted their own studies on the effects of deep-sea mining. The Deep Sea Mining Campaign (DSM) is one of the leading coalitions against the Nautilus project. Last August, the group compiled a report, which warned that underwater mining would wipe out deep water organisms, yet to be discovered by science. The study also suggested that sediment plumes could expose marine life to toxic metals, which would then work their up the food chain to tuna, dolphins and even humans.