Chatham Rock Phosphate Ltd. has provided briefing notes to a number of incoming ministers following the recent change of government in New Zealand.
Individual briefing notes were sent to the 10 most relevant ministers, including the Prime Minister and Deputy Prime Minister, as well as the ministers of energy and resources, environment and economic development, agriculture, fisheries, forestry, export development, conservation, and regional development. It is pleasing that a number of responses have been received already.
The notes provided a succinct summary of the company’s project and particularly its net environmental benefits, and an example is included in this release to further reiterate these messages to existing shareholders and stakeholders.
Briefing to the incoming Minister of Agriculture, Minister for Food Safety, Minister for Biosecurity and Minister for Rural Communities
Summary
The Chatham Rock phosphate project comprehensively ticks the boxes in terms of net environmental benefits, security of supply of an essential farm input, project economics and benefits to the N.Z. economy.
Introduction
Chatham Rock Phosphate is a Wellington-based company that proposes to dredge rock phosphate from a small part of the central Chatham Rise, about 450 kilometres, offshore Christchurch.
Although it has cornerstone investors overseas and is stock exchange listed in both Canada and Frankfurt (as well as New Zealand), more than 50 per cent of CRP is owned by over 1,300 New Zealanders.
Benefits for the environment
Rock phosphate from the Chatham Rise has exceptional environmentally beneficial attributes relating to its properties as a reactive rock phosphate and its unusually low cadmium levels.
The directly beneficial environmental effects of using Chatham Rock phosphate are reduced runoff, improved water quality, a healthier soil profile, reduced heavy metals being applied to soils and much lower carbon emissions.
Ethical, secure supply
By recovering rock phosphate from the Chatham Rise, N.Z. will have its own supply without depending on imports from other countries, particularly Morocco, which is mining rock from a disputed territory. Onshore phosphate mining also impacts on local communities, causing well-documented health issues and social and environmental distress.
Project will pay taxes, create jobs and knowledge
The project would result in significant tax revenue and port charges, as well as create many high-value knowledge-based jobs in the port and on the mining ship, undertaking environmental monitoring and broader scientific research in the agriculture and hospitality sectors and on the Chatham islands.
It could lead to N.Z. leadership in marine technology potentially worth billions as marine mining becomes commonplace overseas.
By operating in the marine environment, the company will gain (and share) knowledge to better identify conservation priorities.
Project history
The deposit, located on the central Chatham Rise, was discovered by New Zealand scientists in 1952 and extensively explored during the 1960s, 1970s and 1980s by a range of private and public sector scientists (DSIR, N.Z. oceanographic survey).
An estimated $70-million in current-dollar terms was spent back then on at least seven different voyages, each involving several weeks. The data collected mean the deposit is now very well defined.
CRP was granted a 20-year mining permit in December, 2013.
The mining permit area is 450 kilometres east of Christchurch, at a depth of around 400 metres on the Chatham Rise and in New Zealand territory. Estimated reserves are 23.4 million tonnes.
The current exclusive economic zone environmental consenting regime came into force in June, 2013, and CRP’s initial application was among the first considered by the Environmental Protection Authority. It was declined in 2015, and CRP is currently planning to resubmit in early 2019.
The company is planning for an operational start two years after receipt of a marine consent and completing a mining contract (to include arrangements for a vessel to undertake the mining).
CRP’s mining permit assumes an initial mine life of 15 years. The company anticipates further sampling during this initial mining phase will quantify the extent of additional minable reserves within the mining permit area.
How the phosphate will be recovered
A modified version of the trailing suction hopper dredger pictured above will separate a 30-centimetre-thick sea floor layer of phosphate nodules, together with the surrounding sand, sieve the nodules from the sand on board the vessel, return the sand to the sea floor and take the nodules to the operation’s home port. From there, an estimated 29 per cent of the nodules will be processed and used in New Zealand, and the balance exported to neighbouring countries.
First Environmental Protection Authority decision recap:
Main public concerns submitted;Removal of seabed and associated biota;Impacts of the sediment plume on the adjacent environment and deepwater fisheries;Interactions with marine mammals and seabirds.
- Main public concerns submitted;
- Removal of seabed and associated biota;
- Impacts of the sediment plume on the adjacent environment and deepwater fisheries;
- Interactions with marine mammals and seabirds.
Trophic impacts
Mining inside a benthic protection area (fishing bottom is trawling prohibited), but in the hearing, independent/opposing experts agreed that:
Marine mammals unlikely to be affected;Seabirds unlikely to be affected;Major fish stocks unlikely to be affected;Primary food chain productivity unlikely to be affected;Toxicology effects in water column will be very low;
- Marine mammals unlikely to be affected;
- Seabirds unlikely to be affected;
- Major fish stocks unlikely to be affected;
- Primary food chain productivity unlikely to be affected;
- Toxicology effects in water column will be very low;
2015 decision-making committee’s (DMC) summary:
Damage to the benthic environment;Modest economic benefits compared with environmental effects;Significant effect on benthic protection area;Proposed adaptive management would not address fundamental concerns.
- Damage to the benthic environment;
- Modest economic benefits compared with environmental effects;
- Significant effect on benthic protection area;
- Proposed adaptive management would not address fundamental concerns.
The facts:
Damage to the benthic environment is not permanent and is limited to one-10th of 1 per cent of the Chatham Rise.The economic benefits were required to be established before the mining permit was granted by N.Z. Petroleum and Minerals in 2013. As well as being highly profitable, the project creates jobs in ports, agriculture, environmental monitoring and scientific research.Environmental benefits include reduced carbon emissions, lower runoff into waterways and significantly lower levels of cadmium. These benefits were ignored by the DMC.Only 5 per cent of the central Chatham Rise benthic protection area would be affected.The DMC failed to grasp how the proposed adaptive management regime would operate.
- Damage to the benthic environment is not permanent and is limited to one-10th of 1 per cent of the Chatham Rise.
- The economic benefits were required to be established before the mining permit was granted by N.Z. Petroleum and Minerals in 2013. As well as being highly profitable, the project creates jobs in ports, agriculture, environmental monitoring and scientific research.
- Environmental benefits include reduced carbon emissions, lower runoff into waterways and significantly lower levels of cadmium. These benefits were ignored by the DMC.
- Only 5 per cent of the central Chatham Rise benthic protection area would be affected.
- The DMC failed to grasp how the proposed adaptive management regime would operate.
Further information
Much more detailed information can be supplied to back up this summary document upon request.
All of this information is already in the public arena due to Chatham Rock’s continuous disclosure obligations as a reporting issuer in New Zealand and other markets.
Chatham executives would also welcome the opportunity to brief the minister in person.
Chris Castle, chief executive officer
Nov. 16, 2017
