Offshore iron ore mining worth $150M a year to NZ industry, miner claims

Monday 10th March 2014

The biggest single impact from proposals to mine ironsands offshore from the southern Taranaki coast will be some $150 million a year spent on jobs and maintenance, both onshore and offshore, to service the operation, the first day of hearings on the application heard.

Wellington-based TransTasman Resources is seeking permission to mine an area of approximately 66 square kilometres of seabed in relatively shallow water in New Zealand's Exclusive Economic Zone, between 22 and 36 kilometres offshore from the coastal town of Patea.

Five commissioners appointed by the Environmental Protection Authority are considering the marine consent application, the first ever mounted under the EEZ Act, passed last year and governing economic activity in the vast area stretching out 200 kilometres from the New Zealand shoreline.

The hearings will be held around the North Island over the next two months, with TTR hoping to gain permissions that would allow it raise up to $500 million later this year, with a view to be mining by the second half of 2016.

This morning's hearings covered an overview of the project from the company's executive chairman, Tim Crossley, and procedural matters. The Environmental Defence Society will open for objectors to the project tomorrow, along with the lobby group Kiwis Against Seabed Mining (KASM).

However, expert evidence and cross-examination is weeks away. Key issues are expected to cover the way sediment plumes are dealt with when the 90 percent of sand not containing titano-magentite iron ore is returned to the ocean floor, and its impact on marine life, recovery of ocean floor organisms, and the passage through the area of Maui dolphin and blue whales.

Fishing industry views on the impacts on the fishery are mixed, with some opposing the application, despite the area not representing an important commercial fishery. The inshore fishery is popular with recreational anglers.

Crossley told the commissioners the project was using "mature technology", proven in offshore diamond mining operations by the de Beers company in Namibia - a claim that opponents will contest in light of a recent $25 million grant from Callaghan Innovation for innovations the company is developing, based on existing technologies to create what Crossley said was a "new, patented mining system."

Opponents attending the hearings also noted TTR is talking of 250 jobs for New Zealanders, compared with 400 nominated in weekend television coverage by the Economic Development Minister, Steven Joyce.

In acknowledgement that coastal communities close to the operation will not directly benefit from the offshore operation, Crossley said the company was "committed to create a direct benefit to those communities, based on a mechanism for sharing some of the mining profits to be obtained."

"The main benefit to the region is in the $150 million (approximately) which will be spent by the project in the region and New Zealand each year, and the economic stimulus which this brings."

Iron ore attracts a minerals royalty equivalent to 2 percent of the value of the minerals extracted, a regime Crossley described as "highly competitive."

TTR has spent around $50 million in seven years of investigation on the project, most of which was spent in New Zealand both proving up the resource and examining potential environmental impacts.

Crossley stressed the operation was not "deep-sea" mining, with all activity in the application area being in waters between 20 and 45 metres deep, "creating a one-off perturbation in an area which is subject to frequent perturbations naturally."

While iron ore prices had been sliding on global markets, TTR anticipated production costs far lower than land-based iron ore mining, so expected its product to continue to produce commercially attractive margins.

The process itself will use a seafloor "crawler" machine, to cover an area of around 600 metres by 300 metres every 10 days, scooping sands up to 11 metres deep, around 10 percent of which is useable iron ore. This will be processed on a floating, stationary ship and exported using two dedicated ships, to export markets, with the remaining 90 percent of extracted sand returned to the seafloor.

The company has explored around 22 percent of the 7,800 square kilometres covered by its offshore exploration licence, which straddles the EEZ and includes territory inside the 12 mile nautical limit, which is governed by the more stringent Resource Management Act.

The company understood public anxieties about the proposals, Crossley told the commissioners. "It's our task to give comfort and to remedy some of those anxieties. We do understand this (project) is the first of its type in New Zealand."

While some submissions against the proposal had suggested onshore processing would be preferable, the company believed that would increase the risks and environmental impacts of the project.

"It is impossible to prove the negative," the TTR submission says. "For any large scale project, there will not be complete certainty about a range of matters. TTR has adopted a risk assessment approach to its assessment of effects which, couple with proposed monitoring ..., addresses any uncertainty about the extent of effects."

BusinessDesk.co.nz

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