Name and Location
Solwara 1 seafloor copper/gold project, Papua New Guinea (PNG).

Client
Prospective marine miner Nautilus Minerals formed a joint venture (JV) company with PNG’s nominee, Eda Kopa (Solwara), in December 2014 to mine high-grade polymetallic seafloor massive sulphide (SMS) deposits.

Nautilus formed the JV after receiving $113-million that had been placed into escrow in May 2014, after completing the sale of 15% of its Solwara 1 project to Eda Kopa.

Project Description
Nautilus Minerals is pioneering the concept of mining the ocean bed for copper, gold, zinc and silver.

The company is exploring for high-grade polymetallic seafloor massive sulphide (SMS) deposits at 1 600 m below the surface of the Bismarck Sea, off the coast of PNG, within the Western Pacific Ocean’s Rim of Fire. The operation aims to produce ore at a rate of more than 1.3-million tons a year, with the capacity to ultimately ramp up to 1.8-million tons a year of dewatered ore, which will be delivered to the Port of Rabaul.

As of November 25, 2011, the Solwara 1 project had an indicated mineral resource of one-million tons, grading 7.2% of copper, 5 g/t of gold, 23 g/t of silver and 0.4% of zinc. Its inferred resource comprised 1.54-million tons, grading 8.1% of copper, 6.4 g/t of gold, 34 g/t of silver and 0.9% of zinc.

Net Present Value/Internal Rate of Return
Not stated.

Value
The total capital cost for the system to deliver dewatered ore on board barges to the Port of Rabaul, including a 17.5% contingency, is estimated at $383-million.

The operating cost, excluding contingency, is estimated at $237 000/d, or about $64/t of mined ore, transported to the port based on a production rate of 1.35-million tons a year. Allowing for a 10% contingency, these operating costs become $261 000/d, or about $70/t.

Duration
First production from Solwara is expected in 2016.

Latest Developments
Steel cutting for Nautilus’s production support vessel has started.

China's Fujian Mawei Shipbuilding expects to complete and deliver the vessel in December 2017, after which Nautilus and PNG joint venture partner Eda Kopa (Solwara) will commission the vessel during the first quarter of 2018, as a base for its seafloor operations planned at the project.

A ceremony took place at the shipyard on September 25 to mark the start of steel cutting.

Marine Assets Corporation will own and provide the marine management of the production support vessel, which will be chartered to Nautilus.

While Nautilus is celebrating its project advancement, environmentalist nongovernmental organisations (NGOs) have ramped-up opposition against the Solwara 1 project at the Asia Pacific Deep Sea Mining Summit, held at Marina Bay Sands, in Singapore, on September 21.

A new critique published by the Deep Sea Mining Campaign argues that Nautilus’s Environmental and Social Benchmarking Analysis (ESBA) contains “indefensible flaws”.

Reportedly endorsed by a coalition of economists, scientists, NGOs and civil society groups, the critique, titled Accountability Zero, has been launched by Professor Richard Steiner during a presentation at the summit.

The report states that US-based consultancy firm Earth Economics (EE), which Nautilus commissioned to write the report, compares the social and environmental impacts of the Solwara 1 project with existing and proposed land-based copper mines.

“Comparing the impacts of Solwara 1 to selectively chosen land-based mines is like comparing apples to oranges. Nautilus commissioned a study that purports to make a case for seabed mining but which neglects to value marine ecosystem services, or consider the likely impacts on sea water quality, marine ecosystems, or communities [that] depend on healthy oceans,” EE mining programme director Payal Sampat has stated.

The Solwara 1 project has been met with local and international opposition, including three independent scientific reports that detail deficiencies in the science and modelling employed by Nautilus, the environmentalists have alleged.

“The ESBA is not fit for its intended purpose. It fails to provide a framework to assist decisions about the advisability of Solwara 1 or of any other deep sea mining project. Indeed, using the ESBA for decision-making purposes would lead to very poor public policy outcomes.

“The risk of unexpected costs and losses, [owing] to unpredicted environmental and social impacts is high and could leave coastal and island communities carrying the brunt of the burden in the long term,” Deep Sea Mining Campaign coordinator and report co-author Dr Helen Rosenbaum has argued.

Granted a 20-year mining licence in January 2011, Nautilus has yet to formulate the environmental management plan for Solwara 1.

“The time for public relations exercises, such as the Solwara 1 ESBA, is over. Investors, civil society and governments looking at the world’s first deep sea mine need to see real substance. The release of the Solwara 1 environmental management plan would be a good step. It is critical that this foundation document be subject to independent examination and feedback in the public domain,” Oasis Earth Environmental Sustainability Consulting’s Professor Richard Steiner has added.

Mining Weekly Online was awaiting comment from Nautilus at the time of publication.

Key Contracts and Suppliers
Soil Machine Dynamics (construction and supply of two remote-operated SMTs); Technip (engineering, procurement and construction management services for the RALS components of the deep-water Solwara 1 mining and extraction system, comprising subsea pumps, a riser pipe, a riser handling system and associated deck equipment); North Sea Shipping Holding (supply of a specialist marine support vessel); Harren & Partner (supply of a platform supply vessel); GE Oil & Gas (supply of a subsea slurry lift and pump); SRK Consulting, Ausenco, Clough Engineering and Mineralurgy (offshore production system definition and cost study); Golder Associates (mineral resource estimate); Parsons Brinckerhoff (dewatering study); and Pells Sullivan Meynink (geotechnical laboratory testing programme and on-board ship laboratory, advice on rock mass and material parameters, as well as slope-stability analysis for mining).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Nautilus Minerals investor relations and communications VP Joe Dowling, tel +61 7 3318 5544 or email jjd@nautilusminerals.com.
Soil Machine Dynamics, tel +44 191 234 2222, fax +44 191 234 0444 or email info@smd.co.uk.
Technip, tel +33 1 47 78 24 00.
North Sea Shipping Holding, tel +47 55 08 88 00.
Harren & Partner, tel +49 421 46 86 0 or fax +49 421 46 86 586.
GE Oil & Gas, tel +1 203 373 2211.
SRK Consulting, tel +1 604 681 4196, fax +1 604 687 5532 or email info@srk.com.
Ausenco, tel +675 3256 033 or fax +675 3250 091.
Clough Engineering, tel +61 8 9281 9281, fax +61 8 9281 9943 or email clough@clough.com.au.
Mineralurgy, tel +61 7 3381 9295.