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Mining sector in shock over seabed mining rejection

Mining industry leaders are in shock over the rejection of an application to mine ironsands from the ocean floor off the coast of southern Taranaki, and one is questioning whether the six month fast-track process administered by the Environmental Protection Authority is too swift for complex mining projects, where changes to plans are often a feature of obtaining consent.

A decision-making committee (DMC) appointed by the EPA yesterday rejected TransTasman Resources' bid to mine up to 50 million tonnes of ironsands annually, of which 90 percent would be returned to the seafloor after extraction of titano-magnetite iron ore, which would be shipped to Asian steel mills and would have added around $150 million annually to export receipts, TTR had argued.

TTR spent seven years and more than $60 million before seeking the first ever marine consent under a new regulatory regime established for the Exclusive Economic Zone, the vast area of ocean between the 12 mile territorial waters limit and 200 kilometres from the New Zealand coastline, but was told by the DMC that its bid was "premature."

The executive director for the minerals lobbyist Straterra, Chris Baker, said he was "struggling with a reaction other than shock."

"I understand the level of uncertainty that the DMC identified as being too big an issue to allow them to say yes, but where do we go from here? We've never had a process that's so binary."

With more time than is allowed by the EPA's six month process, Baker suggested conditions could probably have been agreed to allow the mining project to go ahead in what he described as "a barren ironsands wasteland", inhabited predominantly by sandworms, which have adapted to re-establish because rough seas in the relatively shallow waters routinely disturb the seabed.

"They come back very quickly and we're touching a few percent of it anyway," Baker said. The DMC was also concerned about the 50 kilometre by 20 kilometre sediment plume that mining would have created, and its impact on the productivity of the marine environment, since it would receive much less sunlight. Uncertainties about the environmental impact of the project were too great to grant a consent, the DMC concluded.

"One has to ask the question: has the process let us down and not allowed adequate consideration of the uncertainties and the conditions that would allow these uncertainties to be dealt with," said Baker. He predicted TTR's dilemma now would be whether to appeal the decision on points of law or mount a fresh application, and whether its coterie of mainly Australian, American and New Zealand investors would have the appetite to spend more on a project that had been rejected once.

TTR chief executive Tim Crossley has been unavailable for comment since yesterday's announcement, although the company issued a statement expressing "extreme disappointment" at the decision.

The chief executive of peak business lobby group Business New Zealand, Phil O'Reilly, said the decision was "a blow for prospects for new industries and growth in the EEZ."

"Any new industry is bound to have some uncertainties. Millions can be invested in researching and estimating the likely effects of a new industry without realistically being able to achieve absolute certainty about all outcomes," said O'Reilly.

"The rejection of an application to establish a new industry on the grounds of uncertainty - when 100 percent certainty for a completely new industry is impossible - may raise the question of whether our regulatory settings themselves may be preventing new industry from being established.

"It would be unfortunate if this was the message being heard by potential investors in New Zealand," said O'Reilly.

The TTR rejection comes as public submissions open for a second applicant, Chatham Rock Phosphate, which wants to mine phosphate nodules on the Chatham Rise, hundreds of kilometres out to sea from Christchurch.

In a statement from London, where he is putting finishing touches on a plan to list the company on London's AIM stock exchange, CRP chief executive Chris Castle said it was "important to remember our application cannot be compared with TTR's."

"It is for a different mineral, in a very different marine environment and using different extraction methods and will be considered by a different DMC."

CRP shares dropped 20 percent this morning to 20 cents apiece.

(BusinessDesk)

Comments and questions
10

Excellent. The Chatham rock phosphate chaps must now be mightily worried!

Let one lot in and then a queue will line up to do the same, each declaring its only a small area of sea bed they're affecting.
Govts that allow this stuff are usually from Africa, or small island nations desperate for money. I don't think NZ is there yet, and we are a clean green nation after all aren't we? That's what we say to earn our tourist dollars on.
You are right CRaP holders will be on here very soon saying what a travesty this is declaring their environmental advantages when all they truly care about is garnering as much capital appreciation of their share price as possible.

What opinion do Crowd Pleaser & JB have on the natural gas field off Taranki?? I'll bet they are happy to use the LPG and Butane pumped from that field.
Do you both hold the same point of view on quarrying lime from the numerous lime quarries in this country????.... or is it the fact that mining the seabed is somehow different??
90% of the solids would be returned to the seabed for goodnes sake.
Just what life forms are you whinging greenies saving. The seabed is pretty barren where iron sands exist.
How many tourists have stayed away from Taranaki because of the Maui field???
New Zealand is fast becoming land of bloody minded whingers who are quite happy to run around whinging about our low standard of living and consistently compare ourselves to Australia, but are to blind to see the opportunity to change the economic outlook.
You know the old addage; if you keep doing the same thing and expect a different result, then you're a fool. Think about it.

Exactly!! How I wish these green Taliban would all head to the hills with a flint and a grass skirt - stay off the roads at night though lest you become road kill.

Excellent decision by the EPA. Now the government might start to get the message with this EPA decision, the blocking of their political partner - the Maori Party, to loosen up the RMA, and the community rejection of the damming of the Tukituki river in the Hawkes bay.

Meanwhile the PM will be gutting an earful from President Obama who moves forcefully and deliberately to phase out coal fired power stations in the US while this government turns a blind eye to polluters.

Look out now the EPA. Without question this government will soon take steps to depower you guys too. Watch this space!

That's right stop anything that might be productive. We can all live on the smell of "fresh air".
The EPA decision is crazy. An average westerly storm , which are so prevalent in the area, would have more effect on the seabed than the proposed activity. The storm would definitely do more damage to the beaches.
As for Obama closing down the coal fired power stations. It will only take a couple of "blacks outs" to stop the policy in its tracks ( The black out will occur even if a few stations close). This is why Germany is building about 20 new coal fired power stations as fast as they can --the billions they spent on wind and solar did not work as an energy policy.

I wish I was as ignorant and/or hypocritical as crowd pleaser - it would be much easier to sleep at night after driving my car home, taking a hot shower, turning on my heater, playing on my iPhone and watching overseas crises unfold on my wide screen TV.

The Exclusive Economic Zone potential is now stuffed. There should have been an opportunity for mining to at least begin so that we could remove the uncertainties. The bar is too high and too expensive for investigating any future mining operations in the EEZ. We'll just have to stuff more cows into NZ to pay for our lifestyle. Oh wait - our rivers are already ruined. We'll just have to give up the iPads and cars then and get used to cold showers - if we can afford the water.

The day will come when milk powder prices will be so low (the US will soon be net exporters) that there will be many tears in the agri sector as young farmers bite the dust as they wallow in debt dung and nitrogen.
Its imperative we broaden our economy.
This Act is unworkable.

Assuming the 5 people who made this crazy chicken hearted decision are parents they obviously took the risk back then even though the outcome of their actions may have turned out to be less than perfect.
This decision has no logic.