Nautilus Minerals

Borrowed from deep sea news

I’ve discussed Nautilus Mineral here at DSN previously. In the past, I have been admittedly biased against the company and their operations to mine the deep. Here I will try to provide a less biased viewpoint. My goal is simply educate the public on Nautilus’s current operations, what concerns have been raised about these operations, and what unanswered questions remain.

Nautilus is based in British Columbia with extension offices currently in Brisbane and PNG. The company was formerly known as Orca Petroleum Inc. According to Yahoo Finance, Orca “encountered regulatory problems and poor testing results in its Camatindi project in Bolivia” that lead to its demise. The goal of Nautilus is to explore the “seafloor [for] massive sulphide (SMS) deposits which are considered modern day analogues of Volcanogenic Massive Sulphide (VMS) systems – a prime source of the world’s onshore copper, gold, zinc and silver deposits.” To be clear, SMS deposits is a synonymous term for black smoker hydrothermal vents. The goal of the company is to extract the chimneys, rich in valuable minerals, from hydrothermal vents. Nautilus is a publicly traded company listed on both the Toronto and London (as NUS) exchanges. It closed out 2007 with $312 million cash in the bank, the awarding of a $65 million contract for the design and build of two remote-operated deep-sea mining machines.

The company’s three largest shareholders according to the website are “three of the world’s largest resource companies, including Anglo American (5.7%), Teck Cominco (7.2%), and Epion Holdings (22.4%).” Anglo American Corp. founded by Oppenheimer also owns 45% of DeBeers, who currently mines diamonds off the shelf and slope of Africa. According to the Wikipedia entry…

“In August 2007 British charity War on Want published a report accusing Anglo American of profiting from the abuse of people in the developing countries in which the company operates…Anglo American was also accused in 2007 of damageable environmental practices: in order to complete its planned Alaskan Pebble Mine in collaboration with Northern Dynasty Minerals, the global mining giant may build a massive dam at the headwaters of the world’s largest sockeye salmon fishery, which it would risk obliterating.[4] Opponents are also pointing to the use of cyanide, heavy metals, and acid mine drainage which can all have potentially devastating effects on the pristine environment of the Bristol Bay area.”

Teck Cominco’s Wikipedia entry notes

“In the past, Teck Cominco has been criticized and sued for violating environmental laws and standards –as have most natural resource extraction companies, particularly in the mining sector. Teck Cominco, however, has made “best in class” environmental and social performance a priority of late, and is getting recognized for its efforts; awards for safety, reclamation and sustainable development are all available for public scrutiny on their website, as is their sustainability report. [reference is a Teck Cominco report]. The company’s smelter in Trail, British Columbia was blamed in 2003 for heavily contaminating the Columbia River. Legal action taken by American citizens living in settlements downriver is currently under review by the U.S. Supreme Court. The company’s Red Dog mine operation in north-western Alaska has been ranked by the U.S. Environmental Protection Agency as one of the most polluting facilities in the United States based on output tonnage of toxic chemicals, largely in the form of waste rock from mining operations. Residents living downstream from the mine recently launched a lawsuit against Teck Cominco, demanding that the Red Dog mine complies with its environmental obligations and that it pay fines for continuing to violate its water permit requirements.

The obvious first question is whether Nautilus will operate in a more environmentally cautious manner than its shareholders or former company historically has.

Nautilus & The Deep

Currently, Nautilus is developing the Solwara 1 copper and gold project, which is located at 1600m in the territorial waters of Papua New Guinea, in the western Pacific Ocean. To my knowledge this operation is in the exploration and environmental impact assessment phase. According to Mining Weekly, “Subject to Papua New Guinea government permitting and approvals, offshore mining at Solwara is expected to start in 2010 (the Nautilus website suggest as early as 2009).” According to Michael Johnston, Vice President of Corporate Development, comments to mining seminar in PNG, the basic plan is to raise the hydrothermal vent structure (SMS deposit) to the surface. The current exploratory mineral processing is planned to take place on land. Recent operations are also being carried out near Tonga. Nautilus also notes that ”

If we start mining in Tonga, we will have mining waste to dispose of. At this time the company is still examining the various options available to do this responsibly in PNG where we expect to start mining towards the end of 2010…The current process of how we plan to extract minerals from the seabed in PNG is the following: the Subsea Mining Tool (SMT) will be used to cut the rock from the seafloor. The material will then be transported to a surface vessel using the Riser and Lifting System (RALS). Once on the vessel the material will be dewatered on the vessel (ore separate from the seawater). The water will be treated and returned to the depths where it came from. The ore will be sent to the smelter to extract the relevant minerals.”

No subseafloor excavations are planned as well as no permanent installations according to Steven Scott, a geologist at the University of Toronto. However, it is suggested by Scott that the residue could “simply reoccupy the space on the sea floor from which it was originally extracted.” Overall, the process seems vague potentially because Nautilus is not clear the best way to proceed. I definitely favor more transparency in how this process is proposed to specifically occur.

Environmental Impacts

Nautilus notes on their website that

“1 .Our commitment is that undersea mining will be conducted in an environmentally responsible manner. 2. The whole idea of undersea mining is a new science, and we will work closely with environmental agencies, government and stakeholders to develop a regulatory regime that ensures undersea mining will not harm the environment. 3. Nautilus is currently conducting environmental studies in conjunction with their exploration programs. 4. This represents a totally clean slate for the mineral exploration industry, a new chapter where all the modern knowledge of the environment can be brought to bear on this new project.”

With regard to two this appears to be the case as collaborations with Woods Hole Oceanographic Institute occurred in 2006 to explore the Solowara site. With respect to three, Nautilus as released this summary(pdf) of their Environmental Impact Assessment. A cursory view reveals that it encompasses both the impacts to benthic and pelagic processes and if carried out would provide an adequate assessment of the impact of the operations on the local deep sea. We also note previously that Nautilus has hired some of the finest scientific experts to explore the problem, including Dr. Cindy Lee Van Dover, who literally wrote the book on the ecology of vents. “My first impression is that Nautilus is trying to do the right thing” says Paul Lokani of The Nature Conservancy in Papua New Guinea.

However, Craig Cary, a marine biologist at the University of Delaware in Newark, says the prospect is unthinkable because of the potential effects on marine life. “If I was in charge of reviewing permit requests there would be some serious questions to answer. Metal sulphides are nasty substances – how are they going to deal with that?” In Science Magazine’s Policy Forum, Jochen Halfar and Rod Fujita (Environmental Defense) wrote on the “Danger of Deep-sea Mining”. They cite sediment plumes, nutrient loads to oligotrophic surface waters, and toxic effects to the water column among their primary concerns. The Australia-based Mineral Policy Institute noted “There is little or no independent oversight of companies’ activities. Exploration activity… is not subject to appropriate regulation and control. This is a grave issue in this case as the areas targeted by these companies coincide with what has been identified as biodiversity hotspots in the region.”

At this time, based on previous science what can we say about the environmental impacts of hydrothermal vent or SMS deposits? Officers of Nautilus have noted that marine life around hydrothermal vents, from which the SMS deposits are formed, are well adapted to the natural “pollution” pumping out of the vents. One anonymous commenter at the old DSN, likely from Nautilus, further suggested “The ability of these creatures to live in such a “polluted” and extreme environment, infact, is the subject of much scientific and biotechnological interest.” This comment has also been made in press statements by Nautilus. My response was/is that only some organisms are adapted to sulfide that naturally occurs at hydrothermal vents. These species have a chemosynthetic bacteria that utilizes this as an electron receptor in the process of converting methane or CO2 to a usable carbon. Other species do not contain these bacteria and instead prey upon the organisms that utilize the above process (i.e. fish, cephalopods, shrimp, crabs, etc.) These species are likely to be less tolerant of these emissions. Moreover vents are surrounded by nonvent communities that are not adapted for such “pollution”. The question is how much will the sulfide plume and background ambient concentrations increase due to mining operations?

It was also suggested that “Vent ecosystems are also ephemeral and opportunistic, popping up where venting occurs and dying off when the vents close due to earthquakes.” I commented at the time that individual vents are ephemeral but vents are a temporally continuous system. Colonization of new vents by species requires a source vent to be near. By destroying one vent, or a series of vents (which is the more likely case) you decrease the probability of new vent communities to arise at new venting sites. Another issue that Nautilus plans for excavation included a “bus-size” ROV and eventually a fairly large scale commercial mining. With this much activity in a hydrothermal vent field, can the impacts be minimal?

Another remaining question is whether active or nonactive vents are to be extracted. If nonactive vents are to be removed, how close will these be to active vents? It would be reasonable to assume that if an extinct vent far from active venting was removed then the impacts could be negligible. Although, I remember seeing a very well-delivered talk at the last Deep-Sea Biology symposium by Erikson, a student of Cindy Lee Van Dover’s, about the communities that form on inactive vents including branching corals, stalked barnacles, and hydroids.

There is also another issue that surrounds this and must be taken into account, consideration of the impacts of deep sea mining with impacts of terrestrial mining. Conservation often requires prioritizing threats. There is no doubt need for these minerals (evidenced by the skyrocketing values that makes such a deep-sea endeavor financially feasible) and some of the products they occur in are vital to society. So the question is what do we choose, an impact to the ocean (large or small) or an impact to land (large or small). Of course the mining industry has a poor environmental record so concern that impacts to oceans will be equally large is not unreasonable. One consideration is the extent that deep-sea systems are different and possess a unique set of constraints (like temperature extremes) that constrain how deep-sea communities respond to a disturbance.

We also noted previously, that the 2000 tribe members from Bagabag Island (PNG) urged the government to put end to exploration and mining on the seabed in a paid advertisement in the national paper. In the piece they voiced their frustrations and absolute disgust over the manner in which the provincial and national governments have issued license to Nautilus Minerals Corporation Ltd to conduct deep sea mining activities near Bagabag Island and in the surrounding outer islands in the province…Mr. Daing and Rev. Kinim said Nautilus has no experience in sea bed mining and therefore do not want to see their ocean as a training ground for this company.

Another concern of many is why Nautilus is targeting PNG, as opposed to Canadian EEZ. Rick at MBSL&S suggests lax environmental regulation and a corrupt government might be one reason. Nautilus notes, “We believe the highest grades occur along back arc basins (such as that in Tonga and PNG) and less so mid-ocean ridges (such as those offshore Vancouver).

Overall, I hope that Nautilus is truly trying to move towards a small environmental footprint. However, I am concerned by the vulnerability and slow recovery of deep-sea systems, the poor environmental track record of the mining industry (including some of those companies who hold shares of Nautilus), and the lack knowledge about the specifics of Nautilus’s proposed activities.

Originally posted March 23, 2008 2:00 PM, by CR McClain