Chatham Rock buoyed by company's African licence

A mining licence granted to a phosphate mining company off southern Africa is encouraging Chatham Rock Phosphate, which has its own Namibian ambitions.

The New Zealand listed company also says its Chatham Rise operations, about 450km east of Christchurch, will eventually fund its global expansion plans.

According to newspaper reports, Namibian Marine Phosphate has a mining licence from the country's Ministry of Trade and Industry, pending environmental approvals.

As announced in June, Chatham Rock Phosphate has applied for five prospecting licences offshore Namibia, covering about 45sq km.  

Managing director Chris Castle says NMP's news is encouraging for phosphate mining generally.

"We considered it to be good news because it meant that things are happening in Namibia – there was a hold-up with that licence and they've got it.

"The environmental consents, I understand, are not far behind."

NMP is a joint venture between listed Australian companies Minemakers (ASX: MAK) and UCL Resources (ASX: UCL), with Namibian company Tungeni Investments.

Last month, Minemakers announced the sale of its Namibian interests to Oman company Mawarid Mining.

Mr Castle says Chatham Rock, its major shareholders and himself have no interest in NMP, as far as he is aware.

Huge potential

Mr Castle says because of the higher grade phosphate in Namibia, its smaller prospect area there has potentially as much material offshore as its New Zealand mining area.

The company plans to mine phosphate from the sea floor, at depths of 400m, on the Chatham Rise.

He says the company's forecast $US100 million pre-tax profit would fund its expansion overseas.

"We've got other areas overseas also on our target list.

"Turning into a much bigger global player in the rock phosphate industry is an appealing thought."

He says any expansion beyond New Zealand and Namibia – probably beyond 2015 – will require millions of dollars of research to prove reserves, because other areas are relatively unexplored.

Chatham Rock has applied for a mining licence for the Chatham Rise and, pending environmental approval, hopes to start production in December 2014.

Shares in the NZAX-listed company (NZX: CRP) dropped 2.44% by 11am today to 40 cents – down from last month's record high of 45 cents.

The stock has more than doubled from the year's start of 17 cents.

Most of the gains have come since September, when the company announced it will seek a further $US10 million in a Toronto Stock Exchange listing before Christmas and on the back of a research report valuing the share at $1.87.

dwilliams@nbr.co.nz