Canada-based Nautilus Minerals Inc. (TSX&LON:NUS) sank to fresh lows Wednesday in London, falling almost 5%, hit by the news of a Papua New Guinea’s landowners petition to the Government to cancel the firm’s seabed mining permit.
The company, the first to explore the ocean floor for polymetallic massive sulphide deposits, was granted a mining lease by the PNG authorities in January 2011, following the environmental permit award in December 2009.
But the mine developer has been swimming in choppy waters ever since. It faces critics from the environmentalist and the marine biologist community as per the consequences of its Solwara 1 gold, copper and silver project. The company has also been locked in a dispute with the government of the South East Asian nation since June over ownership of the project, located in the Bismarck Sea.
Over 20,000 signatures submitted to PNG Mining Minister Byron Chan by residents from the provinces of Madang, Oro and New Britain, stating that they don’t want the project to go ahead, reports Radio New Zealand.
Locals insist they have seen dead fish washing up on beaches and that the water has been polluted by the exploration work. But a company's spokesperson told MINING.com that there is absolutely no truth to those claims.
"For starters, Nautilus does not currently have an exploration ship in PNG and in fact has not had an exploration ship on the water since May 2012 (…) We remind people that exploration work is a low impact activity, very similar to marine scientific research, and does not involve stirring up sediments. The work leads to a lot of data collection, which Nautilus provides to the PNG government. This includes map data that has been used to improve PNG’s navigational charts which in turn improves maritime safety in PNG," said the firm in an e-mailed statement.
The Canadian mine developer was granted a 20-year permit by the government of Michael Somare to mine an area in the Bismarck Sea to a depth of 1.6 kilometres. Nautilus has said it plans to begin extracting minerals from the Solwara 1 deposit in 2014.
The new PNG government, led by Peter O’Neill, is reportedly challenging the deal and wants to make a number of amendments, according to Radio New Zealand.
A leading copper producing country before both BHP Billiton and Rio Tinto were forced to abandon two massive mines over land and environmental disputes, PNG is one of the poorest countries in the world. It is the impoverished nation's eighth poll since it gained independence from Australia in 1975 and most observers now expect the balloting to continue beyond the initial deadline of July 6.
Shareholder in Nautilus have seen the value of their investments plummet by more than half since the company initiated the legal battle on June 1 over Solwara1.