New Zealand election stirs optimism for seabed mining sector

Miners see New Zealand's new government as a "game-changer" for the development of seabed mining within territorial waters.

Manuka Resources Ltd.'s share price doubled between the Oct. 14 election and Dec. 13, when newly appointed Resources Minister Shane Jones told parliament that "seabed mining has a legitimate place in New Zealand's regional economy." Jones is part of a three-party coalition government formed in November following the election.

"The new government has committed to exploring the potential for a critical minerals list, where such minerals would have a preferential pathway for development once identified," a spokesperson for the Ministry of Business, Innovation & Employment confirmed to S&P Global Commodity Insights.

New Zealand's offshore minerals potential includes iron sands off the North Island's west coast, phosphate at Chatham Rock Phosphate Ltd.'s Chatham Rise and concentrations of gold, silver, copper, lead and zinc from undersea vents known as seafloor massive sulfides at Kermadec Arc and Colville Ridge.

Manuka unit Trans-Tasman Resources Ltd. (TTR), Chatham Rock Phosphate and Pacific Offshore Mining Ltd. hold the four offshore minerals permits in New Zealand territorial waters, with TTR and Chatham Rock Phosphate already having published resource estimates.

New Zealand could become the world's third-largest vanadium pentoxide producer behind China and Russia purely based on TTR's planned 11,000 metric tons per year output from the South Taranaki Bight iron sands and vanadium project, according to US Geological Survey data.

"What's changed significantly — and this election is the biggest game-changer I've seen in 20 or 30 years — is a coalition government that wants to get out there and actually protect our economy and our supply of vanadium, rare earths and the like," Chris Castle, CEO of Chatham Rock Phosphate, told Commodity Insights.

The new coalition government has created a "turn in sentiment," said Alan Eggers, executive director of Manuka.

"The new government has refocused on natural resources and mining and said 'if these projects come up to scratch, we should get on with it,'" Eggers told Commodity Insights. "We should encourage seabed mining in New Zealand."

Past opposition

Seabed mining in New Zealand has faced challenges from entities concerned with environmental impacts, including Greenpeace, which has opposed Manuka's South Taranaki Bight project.

"I have seen a common sentiment among the general public against mining and marine mining," which pervaded New Zealand politics and public opinion for the last decade due to environmental concerns, Castle said.

While there is no outright ban on seabed mining in New Zealand's territorial waters, projects have stalled due to permitting challenges.

"There is no moratorium that prevents seabed mining being undertaken in New Zealand's waters but to date this has not occurred, as the marine consents needed by mining companies have been refused," the ministry spokesperson said in an email interview.

Chatham Rock Phosphate was granted a 20-year mining permit in 2013, the year New Zealand's Exclusive Economic Zone Act for seabed mining was enacted, but had its environmental consent declined in 2015.

TTR's 2014 mining permit and 2017 environmental permit have been challenged in New Zealand's High Court, Court of Appeal and finally Supreme Court, all of which identified "apparent information deficits" and summarized "legal deficiencies" in the environmental regulator's decision in particular.

TTR has spent about NZ$85 million on its project, including about NZ$20 million on legal and court costs, and has produced over 11,500 pages of "expert reports that have been internationally peer reviewed on the project, how it will operate and what its impact, if any, on the environment is," Eggers said.

While "there are currently no plans to amend or reform the specific regulation governing seabed mining in New Zealand waters," the inquiry is looking into the potential benefits and risks of seabed mining and whether changes to its domestic regulatory framework are required, the ministerial spokesperson said.

The Environment Committee is yet to confirm the status of the inquiry.

Beyond borders

For areas beyond national jurisdictions, the International Seabed Authority (ISA) is negotiating rules to regulate seabed mining.

The New Zealand ministry spokesperson said the government still backs its 2022 conditional moratorium on deep sea mining in these areas "until a mining code can be agreed at the ISA that ensures the effective protection of the marine environment, as required by the United Nations Convention on the Law of the Sea. This also requires adequate scientific knowledge about the impacts of mining on the marine environment."

The Metals Co. Inc. tapped a consortium led by Australia's chief science agency in July 2022 to pioneer an environmental management and monitoring plan for proposed polymetallic nodule collection operations in the Pacific Ocean's Clarion Clipperton Zone, north of New Zealand. The consortium includes New Zealand's National Institute of Water and Atmospheric Research.

As of Dec. 19, US$1 was equivalent to 1.59 New Zealand dollar.

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