UPDATE: CRP determined to reapply for seabed mining licence as fee stoush looms

Tuesday 2nd February 2016

Chatham Rock Phosphate says it intends reapplying for a licence to mine the seabed off the Chatham Rise for phosphate nodules, even as it prepares for court action with the Environmental Protection Authority over disputed fees from its unsuccessful first application.

The EPA is within a fortnight of filing affidavits relating to $795,000 of marine resource consent application fees that it claims are owed after it turned down CRP's first application last year, with court hearings scheduled for the first week of March, the environmental regulator’s chief executive, Allan Freeth, told Parliament’s environment and local government select committee.

CRP managing director Chris Castle says the fees dispute hasn't quelled his enthusiasm for the venture. He told BusinessDesk the company is watching seabed mining applications in both New Zealand and Mexico and is determined to reapply for a seabed mining licence for a remote section of the Chatham Rise in New Zealand’s Exclusive Economic Zone, the vast offshore area that has been subject to an environmental consenting regime only since 2012.

The authority has applied for summary judgement on the outstanding fees, which CRP has challenged as “unreasonable and unlawful, and for which it anticipates mounting judicial review proceedings. EPA invoices for the hearings totalled $2.66 million, of which $1.86 million has been paid.

The EPA also turned down an application from Trans Tasman Resources to mine ironsands off the coast of Whanganui in 2014. The two applications are the only ones to have sought permission to mine the seabed in the EEZ.

Castle said that proposed changes to the EEZ legislation, under resource management law reforms currently before a select committee, held out the prospect of an improved process in the future, and the company was watching with interest as TTR readies a reapplication under the existing regime.

Freeth told the select committee the authority was “very confident” that it would gain a favourable ruling against CRP, which is in the process of achieving a long-held desire to list on the Toronto Stock Exchange by merging with TSX-listed Antipodes Gold, which will change its name to Chatham Rock Phosphate.

CRP is also watching closely an application for seabed mining of phosphate off the coast of Mexico, which is close to a decision and is being pursued by investors who also hold interests in CRP. The New Zealand company continues to meet fortnightly with its technical partner and 6 percent shareholder, Dutch undersea experts Boskalis, to refine plans for mining off the Chatham Rise, Castle said.

"On another front, we are working in the phosphate market," said Castle. "We are involved in two projects to buy and sell rock phosphate."

CRP argues phosphate from the Chatham Rise would remove the need to import phosphate from the disputed North African territory of Western Sahara and that the New Zealand-sourced product would be lower in cadmium than imported phosphate. The mineral is widely used in New Zealand as an agricultural fertiliser.

EPA chair, Kerry Prendergast, said one of the five-year-old agency’s biggest budgetary challenges was the fact it has no dedicated funding for EEZ applications, which also include resource consent processes for oil and gas explorers and producers.

While it had secured one-off funding increases of $2.7 million and $4 million in the last two financial years to cover those costs, the EPA was now making an “investment case” for consideration by the Treasury for permanent funding to meet the large but unpredictable costs of EEZ consent applications.

She acknowledged lower oil prices are likely to mean reduced EEZ activity by the oil and gas sector.

BusinessDesk.co.nz

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