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Ombudsman to investigate EPA's charging in Chatham Rock application

Wednesday 17th February 2016

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Chatham Rock Phosphate has succeeded in persuading the Office of the Ombudsman to investigate the Environmental Protection Authority's charging regime for marine consent applications as it battles over its rejected plans to mine phosphate from the ocean floor.

The EPA is seeking summary judgment against CRP for payment of some $800,000 of invoiced costs that CRP is contesting, from total billings of about $2.7 million.

CRP's managing director, Chris Castle, said the Ombudsman had confirmed it "will be conducting an investigation into the matters we have raised."

"The requested scope of the investigation was first to examine the EPA's costs recovery practices for its marine consent process - including the withholding of information from CRP which was relevant to whether some of the charges were authorised by law," he said.  

CRP's was the second application for seabed mining to be rejected under the new regime regulating economic activity in New Zealand's vast offshore Exclusive Economic Zone. Its application was to take phosphate nodules from the Chatham Rise, some hundreds of kilometres to the east of Christchurch. A decision-making committee appointed by the EPA concluded there was too much uncertainty about the environmental impacts of the proposal.

CRP says it intends to reapply.

The EPA also turned down an application from Trans Tasman Resources to mine ironsands off the coast of Whanganui in 2014. TTR is also planning to reapply.

Minerals sector lobbying seeking significant changes to the EEZ regime after the rejections were largely unsuccessful, although legislation is before a select committee that would see ministers rather than the EPA appoint members of decision-making committees in future. Ministers already appoint commissioners for boards of inquiry convened under fast-track provisions of the Resource Management Act, which is used for resource consents for onshore and inshore coastal economic development.

CRP shares plunged from around 14 cents at the time of the EPA's rejection of the application a year ago, and most recently traded at 7 cents. CRP is merging with another Castle-related vehicle, Antipodes Gold, to gain dual-listing on the NZAX and Toronto Stock Exchange.

According to a January shareholder update, the company is also seeking a refund of fees it says it was overcharged by the mining licence permit issuer, New Zealand Petroleum & Minerals.

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