"In early November,Nautilus Minerals, which believes the government has a contractual obligation to pay approximately 75 million dollars associated with a 30 percent investment in the project, announced it was terminating construction of the 407 million-dollar seafloor production system."
Updated Fri 18 Oct 2013, 2:42am AEDT
Photo: Nautilus Minerals has been exploring the territorial waters of Papua New Guinea (PNG) for mineral deposits since 1997, when the first offshore mineral exploration licenses were granted. (Nautilus Minerals )
Canadian company Nautilus Minerals could begin seafloor mining at a second site in the Pacific in as little as four years.
The company hopes to be the first in the world to mine copper and gold from the deep ocean at its site in the Bismark Sea in Papua New Guinea.
Natuilus's CEO, Mike Johnson, has been keeping a low profile in the media since last year when its dispute with the PNG government was referred to international arbitration.
Now that the dispute has been resolved, the company is pushing ahead with its plans in PNG and elsewhere in the Pacific.
Natuilus is now willing to answer questions from its critics.
Nautilus Minerals says it is to ready ramp up its deep-sea copper and gold exploration project after an international arbitrators ruling on its dispute with the government of Papua New Guinea.
Earlier this month former Chief Justice of the High Court of Australia Murray Gleeson ordered PNG to pay for its 30 per cent stake in the joint venture and to pay its share of costs to date.
Papua New Guinea had argued that Nautilus had not kept its obligations, allowing it to terminate its role in the venture.
"Now that the arbitration dispute has been dealt with...we are looking forward to accelerating the rest of the contracts and build [our] schedule," Mr Johnson said.
The State has been told to comply with the arbitrator's decision which means the PNG government is expected to pay US$118 million by October 23rd.
Mr Johnson said they are confident that the state would meet its obligation.
Metal prices have been falling and the dispute caused delays and extra costs.
But Mr Johnson believes the value of copper is still rating well enough.
"The project is largely a copper mine. Copper pricing is still very, very good; $3.20 last friday," Mr Johnson said.
"There is a little bit of jitteriness around gold as there always is when you have significant political events happening, and I guess the current sate of the U.S. would be classified as a significant political event."
Mr Johnson admits that the dispute had some damaging effects on the company.
"Definitely, it has had an impact on our company...and on the project because delays ultimately result in increased cost," Mr Johnson.
"We have managed to track to a revised schedule on [our three main contracts] but any delays, generally, in the mining industry result in increased cost."
Mr Johnson believes the dispute has not risked the commercial viability of the project.
"We always planned for a significant ramp-up period when we were commissioning the machines and bringing them on line, but now we will have the ability to do a fair bit of that work closer to home where they were built back in Newcastle." Mr Johnson said.
"It will be a lot easier to fix any minor problems...so there has been a few benefits there with the time delay."
Mr Johnson believes there is a lot more support for the project than people are aware of.
"It is a very, very good project that suits what PNG needs [to] go forward," he said.
"Papua New Guinea needs to start developing small to medium sized enterprises. This project sits nicely in the desire to develop those sorts of industries."
"It is not your normal type of mining project."
Mr Johnson believes if PNG takes up the areas of business associated with the project, it can capture 60-70 percent of the value chain for an investment of 30 per cent of the actual capital.
"It is my belief that this would still be the first project [commercial deep-sea mining] in the world," Mr Johnson said.
"We are well advanced on design work for the vessel and discussions with yards and financiers but until a contract is decided on and awarded we won't be able to say exactly what that timeframe will look like."
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