Seabed mining bid was 'premature', says EPA committee

UPDATED: The bid by TransTasman Resource to mine the seabed in the south Taranaki Bight was "premature" and should have spent longer on understanding the impacts of its proposals on both the environment and existing users, the decision-making committee appointed by the Environmental Protection Authority says in its decision, released today.

The decision, the first in response to an application for seabed mining under the new regime governing activity in New Zealand's vast Exclusive Economic Zone, comes after a seven-year, $60 million effort to establish a new industry to dredge iron ore-rich sands between 22 and 36 kilometres off the coast of Patea and export around five million tonnes of ore to Asian steel mills on dedicated ships.

The operation would have required 45 million tonnes of sand annually to be returned to the ocean floor after the extraction of titano-magnetite ore, creating a sediment plume that would have stretched over an area around 50 kilometres by 20 kilometres, and was among key uncertainties that led to the proposal's rejection.

TTR said it was "extremely disappointed" with the decision and its chief executive, Tim Crossley, declined interviews today. However, environmental groups are delighted, with the Environmental Defence Society saying it gave some comfort that the EPA process was "robust and free from political influence."

Kiwis Against Seabed Mining (KASM), which rallied national opposition to the scheme, called it "a victory for commonsense."

No immediate statements were forthcoming from government ministers, who invested substantial political capital and parliamentary time in establishing the EEZ regime, in the hope that it would pave the way to new industry developments, or from the minerals industry lobby group Straterra.

The DMC's decision said the "major reason" the application for a marine consent was declined was "uncertainty around the scope and significance of the potential adverse environmental effects, and those on existing interests (such as the fishing interests and iwi).

"It (the DMC) was not satisfied the life-supporting capacity of the enviroment would be safeguarded or that the adverse effects of the proposal could be avoided, remedied, or mitigated, given the uncertainty and the inadequacy of the information presented."

While TTR had proposed a new adaptive management regime on the last day of the 25 days of hearings held on the application, "the DMC found that the conditions proposed by the applicant (including the adaptive management approach), were not sufficiently certain or robust for the application to be approved."

"There was also a lack of clarity about the extent of economic benefits to New Zealand outside of royalties and taxes and the economic value of the adverse effects."

TTR estimated a total of 420 direct and indirect jobs would be created by the initiative, that it would yield around $50 million a year in taxes and royalties and add around $150 million a year to export receipts.

On the sediment plume, the DMC said "one of the more significant impacts would be on the primary productivity. Modelling of the optical properties and primary production indicated a reduction of total primary production in the 12,570 square kilometres of the South Taranaki Bight could be in the order of 10 percent, and a reduction in energy input into the seabed ecosystem (through reduced sunlight reaching the ocean floor because of the sediment) of up to 36 percent."

"More time to have better understood the proposed operation and the receiving environment and engage more constructively with existing interests and other parties may have overcome many of the concerns we have set out in this decision," the DMC said.

(BusinessDesk)

EARLIER: Rejection for ocean floor ironsands mining bid

Investment in resource extraction from New Zealand's vast Exclusive Economic Zone has taken a major knock today, with a decision-making committee of the Environmental Protection Authority rejecting an application from TransTasman Resources to mine ironsands off the seabed some 22 to 36 kilometres off the coast of Patea.

TTR issued a statement disclosing the rejection ahead of detail from the EPA, saying it was "extremely disappointed with the decision."

The company spent some $60 million over seven years developing the project, which it believed could be achieved in an environmentally sustainable way and create additional exports of around $150 million a year from the export of around five million tonnes annually of titano-magnetite iron ore to Asian steelmills, using a suction dredging process that would have returned 90 percent of the sands to the ocean floor.

"We have put a significant amount of time and effort into developing this project including consulting with iwi and local communities and undertaking detailed scientific research to assess environmental impacts of the project," said TTR's chief executive, Tim Crossley. "Our objective has been to develop an iron sands extraction project which achieves substantial economic development while protecting the environment.

"We will be carefully analysing the decision over the next few days and will take our time to consider what this means for the South Taranaki Bight project and for the company."

TTR has 15 days to lodge an appeal, but the next step in the company's plans was to raise as much as US$550 million in new debt and equity to fund the project, and had been working to a tight mid-year timetable to achieve that goal.

"The bottom line is our New Zealand staff and consultants now have a very uncertain future and the local community will not benefit from hundreds of new jobs and an estimated $240 million dollars increase in GDP, annually," said Crossley.

The result is a victory for Kiwis Against Seabed Mining (KASM), which mobilised large numbers of opposing submissions to the project ahead of hearings that lasted two months between March and May.

However, it is a blow to the government's desire to see mineral extraction projects become a larger part of the New Zealand economy and follows a major legislative and regulation-making programme to create a regime to manage the environmental impacts of activity in the EEZ under a fast-track regime administered by the EPA.

The second application under the new regime, from Chatham Rock Phosphate, which plans to mine phosphate nodules on the Chatham Rise some 450 kilometres east of Christchurch, is currently open for public submissions.

(BusinessDesk)