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Mining will enter a new era from 2010 with London-listed Neptune Minerals extracting two million tonnes of mineral-rich ore a year from deep below the sea along the Kermadec Arc north-east of New Zealand. BY HUGH DE LACY
“Seafloor massive sulphides (SMS) represent a new frontier for the minerals industry,” says Neptune’s New Zealand manager, Campbell McKenzie, in a paper he presented to the 2008 annual conference of the New Zealand branch of the Australasian Institute of Mining and Metallurgy. Backed by adaptations of the petroleum industry’s off-shore oil exploration and production technology, and with multinational giant Newmont Mining Corporation taking a significant shareholding, Neptune lodged an application with New Zealand’s Crown Minerals for a mining licence in the Kermadecs back in July. The target area is the Rumble II West seamount where hydrothermally inactive SMS deposits were discovered last year. Globally SMS deposits typically contain five to 15 percent copper (60 percent of the ore value), three to 30 percent zinc, two to 10 percent lead, 20 to 2200 grammes per tonne of silver, and two to 20 grams per tonne of gold (25 percent of ore value).
The intension is to start pilot mining by the end of 2010, he says, anticipated to be at a quarter scale to full production. “While the extensive column of water above the SMS deposits presents an obvious technical challenge, the [undersea mining] industry offers significant other benefits not open to terrestrial miners. Firstly, the ore deposits form on the modern seafloor and sit ‘proud’ as relatively discreet mounds of SMS material, often with a crown of chimneys,” says McKenzie. “There is generally no overburden to remove and manage as the ore is exposed on the seabed. Additionally, there is no breaking or blasting of the material required.” McKenzie admitts that no mining system for SMS deposits has yet been commercialised, but technologies already exist that can be adapted to the challenge and, once deployed, to be transferable to other sites. The commercial viability of SMS extraction had been confirmed by the French company Genesis-Technip which recently completed an independent scoping study. Neptune will focus on hydrothermally inactive deposits because it considers active ones too risky, both environmentally and technically. Neptune was formed in 1999 specifically to pursue the mining of SMS deposits, becoming a public company listed on London’s Alternative Investment Market in 2005. Newmont subsequently acquired a 10.6 percent shareholding. Neptune began its operations by obtaining a prospecting licence (PL) in 2002 covering the Kermadec and Colville Arcs, and the Havre Trough in between. It has since added two more PLs covering a total of nearly 100,000 square metres, and completed exploration programmes that identified the two inactive SMS fields that now are the subject of its Rumble II West mining application.
McKenzie told the conference that Neptune could move towards extraction of a multi-commodity mineral resource from Rumble II West within two or three years. This would include further appraisals to confirm the depth of the deposits, define the most appropriate mining methods and to increase the understanding of the environmental impact. It was necessary to obtain a mining licence for these appraisals because they went beyond the usual definition of prospecting in terms of the 1964 Continental Shelf Act, which is presently the legislation covering mineral exploration in New Zealand exclusive economic zone (EEZ). Rumble II West, “will form part but probably not all of Neptune’s envisaged mining operation,” McKenzie says, adding that this is Neptune’s view. “Neptune’s business model assumes that the overall resource required to support an economic mining operation would be sourced from multiple deposits. The intention is to develop sufficient SMS resources for a minimum 10-year mining project by combining the resources of the individual discoveries, and across multiple sites and potentially multiple licences.”
“Since most of the known SMS deposits are soft sediment sitting on the seabed and not requiring excavation of hard rock, there is not considered to be any significant technical impediment to their recovery,” he says. The Technip-Genesis study Neptune commissioned recommended a mining system incorporating a dynamically positioned production vessel on the surface, a flexible production riser and an airlift pumping system connected at the seafloor to an ore-crusher and seafloor miner. “It is envisaged that operations would commence with pilot mining to optimise technologies before operations are increased to an anticipated production of two million tonne per annum. Neptune has calculated, based on workings from the Technip study, a total capital expenditure plus operating production cost - mined, lifted and de-watered, which includes maintenance and replacement costs – approximating US$162 per tonne ($250/t).” In May of this year Neptune issued an Expression of Interest and Prequalification inquiry (RFP) to a shortlist of leading global dredging and undersea engineering companies to select, “the most technically competent contractor,” for a BOO (build, own, operate) contract mining system. Because the target sites are hydrothermally inactive, SMS mining operations should have a ‘lesser’ environmental affect, McKenzie says. “Initial environmental investigations by Neptune and our marine science research partners indicate the habitats to be impacted are not significant in habitat type, composition or biomass, but comprise fauna and habitat types that would be expected to be found in deep, cold, rocky seabed habitats where SMS deposits were absent.” Mining will be developed under a ‘learning by doing’ Adaptive Environmental Assessment and Management (AEAM) interactive process that allows the integration of detailed environ mental monitoring and impact assessment, regulatory observation, reporting and auditing into the operation. “We intend to develop what we aspire to eventually become a norm for good SMS mining practice and best environmental management techniques and standards globally, says McKenzie. “Neptune considers itself to be at the forefront of an exciting new industry.” |
Never before has the seabed been mined for the base and precious metals that are to be found in rich concentrations on the planet’s hydrothermal intraoceanic arcs, of which the Kermadec has proven to be the most active.
SMS deposits can range in size up to 18 milion tonne with Japan’s Sunrise deposit being typical: it’s 400 metres by 400 metres, and 30 metres thick and contains between nine million tonnes and 14 million tonnes, and with metal values ranging between US$500 and US$2000 per tonne ($770-$3100/t), McKenzie says.
The company has a further 215,000 square metres of prospecting licences issued by the Federated States of Micronesia, Vanuatu and Papua-New Guinea.
This would allow the company to mine small deposits that are individually uneconomic but collectively valuable.