Deep Sea Minerals in the Pacific Islands region: Status, Challenges and Opportunities

“Pacific Mining Symposium”Noumea, New Caledonia

21st – 25th November 2011

Akuila TawakeSOPAC Division

Secretariat of the Pacific Community

Mining History… • Conventional onland mining methods:

• - Underground mining, e.g. Vatukoula Gold Mine, Fiji; Tolukuma Gold Mine, PNG. - Open pit, e.g. Bougainville Copper Mine, PNG; Gold Ridge, SI.

• Marine mining is a relatively new method of developing mineral deposits and ongoing since the 1960s;

• Deep sea mining is a new frontier in mineral development.

Trend of Marine Mineral Exploration in the Region• 1960s – Mid 1970s: Manganese Nodules;

• Mid – Late 1970s: Manganese Nodules, Precious Coral, MetalliferousSediments, Phosphate.

• 1980 – 1983: Ongoing assessment of Manganese Nodules, Precious Coral,Metalliferous Sediments, Phosphate.

• 1981: Commencement of Cobalt-rich Crust exploration;

• 1984 – 1987: Ongoing assessment of Manganese Nodules;

• 1982 and 1984 – discovery of hydrothermal vents in the Lau Back-arc Basin.

• 1991 – confirmation of high grade Seafloor Massive Sulphide (SMS) deposits in the Manus Basin PNG by the CSIRO.

1985-2005 Japan-SOPAC Survey

1st phase: 1985 - 1999

2nd phase: 2000 - 2005

Hakurei Maru 2PNG, Solomon Islands, Vanuatu, Fiji, Tonga, Samoa, Niue, Cook Islands, Kiribati, Tuvalu, FSM, Marshall Islands

Recent Offshore Exploration in the Region• Nautilus Minerals:

- Canadian Company but Australian based.- Currently exploring in PNG and Tonga.

• Neptune Minerals:- United Kingdom Company but Australian based.- Previously exploring in NZ.

• Korea Ocean Research and Development Institute (KORDI)

• Blue-water Metals:- Australian based mineral exploration company.

Tenement Holdings of Companies

• Total land area of PICs: 550,000km2

-146,000Bluewater Metals

476,9801,067,062Total

-20,000KORDI

200,000450,600Neptune Minerals

276, 980450,462Nautilus Minerals

Application (km2)Granted (km2)Company

SMS Deposits

• Often associated with submarine volcanoes or volcanic activity.

• Form in different settings:– Mid-Ocean Ridges (e.g.

Mid-Atlantic Ridge).– Back-Arc Basins (e.g.

Manus Basin, Lau Basin).– Fore-Arc Volcanic Ridges

(e.g. Kermadec Ridge –north of NZ).

• Found in water depths of 350m – 3,700m (latest discovery at 5,000m in the Caribbean).

• More than 200 seafloor hydrothermal vent sites have been discovered world-wide.

Seafloor Massive Sulphide

Caribbean North Fiji Basin

Manus Basin

Manus Basin

Manganese Nodules and Cobalt-rich Crust

Widespread but thin encrustation on the rock surface

Nodular and encrustations

Mode of Occurrence

Nickel, Cobalt (1.0 – 2.5%), Platinum

Nickel (0.55%), Copper (0.35%), Cobalt (0.25%)

Minor Minerals

Manganese, Iron Manganese (20 %), Iron (14 %),

Major Minerals

400 – 4,0004,000 – 6,000Depth (m)

Flanks of volcanic islands and seamounts

All oceansWhere they occur?

Cobalt-rich CrustManganese Nodules

Manganese Nodules

Cook Islands Cook Islands

Cook Islands

Cobalt-rich Crust

Marshall Islands Marshall Islands

Marshall Islands Marshall Islands

Plate Tectonics and Deep Sea Mineral Occurrence

Mineral Occurrence in the Region

√√Niue√Federated States of Micronesia√Marshall Islands

√Fiji√Vanuatu√Solomon Islands√PNG√Tonga

√Samoa√√Tuvalu

√Cook Islands√√Kiribati

SMSCRCMNCountry

• No economic potential for Metalliferous Sediment, Precious Coral and Phosphate

Nautilus SMS Exploration in PNG

Solwara 1

Status of Nautilus Exploration Licenses in PNG

• Central Manus Basin - first SMS deposit discovered in the region in 1985.

PNG – Nautilus Minerals Solwara 1 Project• High resolution bathymetry and

Sidescan Sonar;• Geophysical surveys (magnetic,

electromagnetic and seismic);• Grab surface sampling (using

ROVs);• Video camera (using ROVs);• Drilling (diamond core); • Geotechnical testing of drill core;• Metallurgical test of ore material;• Independent resource estimation;• Environmental Impact Study.

Resource Estimates Comparison

-1.0--0.8910 (resource & reserve)

Porphyry Cu-Au

Ok Tedi Mine(PNG)

75-0.255.772.2115VMSKidd Mine ^

(Canada)

8.6-0.21.31.63.4VMSWhim Creek ~(WA)

377.2-0.87.51.3 (Inferred)

234.8-0.46.80.87 (Indicated)SMSSolwara 1* (PNG)

24.390.85-0.616.930.5 (Inferred)SMSTriple Junction (Fiji)

Ag (g/t)

Au (g/t)

Pb(%)

Zn (%)

Cu (%)

Average GradeResource (Mt)Type of

DepositPotential and

Operating Mines

* (Golder Associates, 2008); ~ (Collins et al, 2004); ^ (Wilton, 1998)

Economic Issues• SMS deposits are higher in mineral content than on-land deposits:

• Typical value of a tonne of land based ore: US$50-200.• Typical value of a tonne of SMS ore: US$500-1500.• One full mining operation could produce export revenues of up to

US$500m pa and taxes/royalties of up to US$50m pa.

3-23%5-20%Lead5-50%5-20%Zinc2-20g/t0.6-8g/tGold5-15%0.5-2%Copper

SMSOn-landMetal

Benefits of Offshore Mining

• Host country and the region will benefit:

(1) Wealth worth millions of dollars will be generated.(2) Significant share of the wealth shall be returned to government and the people through tax revenues, royalty and employment.(3) Mining revenue will enable government to stimulate other economic sectors.(4) Indirectly supporting other local economic activities.(5) Contribute to a well educated labour force.(6) Increase in labour mobility.

Dee Sea Mining a Possibility?• Viability of offshore mining hinges on:

- world demand;- commodity prices;- technological development.

• Any offshore mining operation has to compete with terrestrial mining;

• Previous studies have revealed that mining of manganese nodules and CRC are not feasible;

• Recent studies of SMS deposits have indicated excellent potential for mining;

• Deep sea mining will most likely be confined to SMS deposits in the next 5-10 years.

Recent Technology Development • Rapid expansion of marine

technology is driven by: - military and marine research;- gas and oil production;- relatively shallow marine mining (i.e. diamond mining in Africa).

- Nautilus Design for mining SMS deposits: - Mining Support Vessel (MSV)- Riser and Lifting Systems (RALS)- Seafloor Mining Tools (SMT)

• The development of new seabed mining technologies will increase the economic viability of manganese nodules and Cobalt-rich Crust deposits.

Comparing Terrestrial and Offshore Mining

Sulphuric acid cannot form in ocean (seawater being “alkaline”)

Acid Rock Drainage

Small footprintHuge footprint

Reasonably less amount of waste generated

Generate significant amount of waste materials

Common heritage of the nationComplex resource ownership system

Far less infrastructure to be built Huge infrastructure development

Located with national EEZOften isolated and difficult to access

No overburden Huge overburdenMarineTerrestrial

Ocean – the Overburden that won’t go away• Any mining operation has to

constantly deal with the overlying huge body of seawater.

• Ocean cannot be shifted elsewhere for easy access to seabed minerals.

• Significant distance (i.e. water depth) separates the mineral deposit from the mining platform.

• Need to develop robust seabed mining tools including the ore lifting system to ensure environmentally sound mining practice.

• Ore hoisting process will consume reasonable amount of time and energy.

Recent Developments on DSM• PNG has granted Nautilus

Minerals with the world’s second deep sea mining leasein January 2011.

• Nauru (NORI) and Tonga (TOML) registered companies have been granted exploration license in the International Seabed Area (the Area).

• PICs such such Kiribati, Samoa, Tuvalu and Fiji have shown interest in applying for exploration license in the Area.

Clarion-Clipperton Fracture Zone

SOPAC-EU EDF10 Deep Sea Minerals Project

The Project has four Key Result Areas: • (1) Regional legislative and regulatory framework (RLRF) for offshore

minerals exploration and mining;

• (2) National policy, legislation and regulations;

• (3) Building national capacities – supporting active participation of PICs nationals in the offshore mining industry; and

• (4) Effective management and monitoring of offshore exploration and mining operations.

Overall objective: to expand the economic resource base of Pacific ACP States by facilitating the development of a viable and sustainable marine minerals industry.

References• Coffey Natural Systems, 2008. Environmental Impact Statement for the

Solwara 1 Project.

• Collins P and others. 2004. Whim Creek Cu-Zn-Pb Deposit, Pilbara Western Australia.

• Golder Associates. 2008. Mineral Resource Estimate Solwara 1 Project Bismarck Sea Papua New Guinea.

• JICA and MMAJ. 2006 . Japan-SOPAC Cooperative Study 1985 – 2005 Reports.

• Nobuyuki Nokamoto. 2006. Presentation on Deep Sea Mineral Potential in the South Pacific Region.

• Tivey M. K . 2007. Generation of Seafloor Hydrothermal Vents Fluids and Associated Mineral Deposits. Oceanography Vol 20 No.1.

• Wilton D. 1998. The Northern Miner – Description of ore types.