New Zealand rejects underwater iron mine

New Zealand rejects underwater iron mine

Authorities in New Zealand have poured cold water on Trans Tasman Resources (TTR) $70 million ocean floor iron mine project by rejecting what could have become the country’s first operation of its kind.

In its decision the country’s Environmental Protection Agency (EPA) said the major for the refusal was the vagueness around the scope and significance of the potential adverse environmental effects, and those on existing interests.

The company had applied for a permit to mine 66 square kilometres, located between 22 and 36 kilometres offshore in the South Taranaki Blight.

Up to 50 million tonnes of sand per year would have bee processed on ships to remove iron ore, with about 45 million tonnes of waste sand returned to the seabed.

The committee said it wasn't satisfied that negative effects could be avoided, remedied or mitigated. It also said it was concerned by the "lack of clarity" about the project's wider economic benefits, outside of royalties and taxes. The company now has 15 days to appeal with the High Court.

TTR had estimated it would extract about $446 million worth of iron each year, providing employment opportunities and raising the level of New Zealand's exports by $147 million per year.

Considering next steps

In an e-mailed statement, Trans-Tasman Resources chief executive Tim Crossley said his firm was extremely disappointed with the decision.

"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," he said.

The company, which has already spent more than $50 million on the project, will take the next few days to consider next steps.

The push to explore the ocean for mining minerals is gaining momentum as ore deposits on land are on the decline, and demand for hard-to-find rare-earth elements needed for portable electronics and batteries for hybrid vehicles continues to grow.

Besides New Zealand and Papua New Guinea, where Canadian Nautilus Minerals (TSX:NUS) is developing its Solwara 1 gold, copper and silver project, other countries in the Pacific are also looking at underwater mining. Fiji, Solomon Islands, Tonga and Vanuatu, have all issued exploration licenses. Cook Islands, in the South Pacific, also plans to put seabed exploration permits up for bids later this year.