Would-be seabed miner Chatham Rock Phosphate [NZAX: CRP] is looking to raise a further $1.25 million as its key staff take paycuts and the company pursues both law changes and a new mining consent under the controversial new law governing economic activity in New Zealand's offshore Exclusive Economic Zone.
The announcement comes as the Environmental Defence Society describes as "fanciful" reported expectations that there will be either a "wholesale or urgent review of the EEZ Act" following the rejection of CRP's application to mine phosphate nodules on the Chatham Rise, some 400 kilometres east of Christchurch.
Despite the company's spending more than $30 million on research and development of the proposal, an expert decision-making committee appointed by the Environmental Protection Authority rejected the application, citing too much uncertainty about the environmental impacts of the project, particularly on marine corals in the area.
In a statement, NZAX-listed Chatham Rock said it had "no intention" of abandoning the project and it was "increasingly likely" it would lodge a fresh application for a mining consent.
"However, before it makes a final decision to do so, Chatham Rock intends to continue to work with the EPA to seek clarity on the interpretation of the EEZ legislation and the EPA's policies and procedures for managing the consent process," Chatham Rock Phosphate managing director Chris Castle says.
"Chatham Rock is also contributing where possible to the discussions about changes to the EEZ legislation and will incorporate any changes in our plans."
Environment Minister Nick Smith told Parliament on February 19 there would be "sensible finessing" of the EEZ regime.
Environmental Defence Society chairman Gary Taylor said in a statement that "the idea that government would jump when CRP stamped its feet in annoyance at a rejection of its consent application is fanciful: New Zealand is not a banana republic."
CRP was the second seabed mining application to be rejected since the EEZ regime came into force in 2013. TransTasman Resources, which sought to mine ironsands from the seafloor in the southern Taranaki Bight, was also turned down on the grounds of uncertain environmental impacts, having spent $70 million on its project. TTR is also considering a fresh application.
Taylor said it was "a reasonable expectation that there will be a review, that it will be on a measured timeline and that it won't involve tinkering with the purpose section. New Zealand clearly needs its new EEZ Act to work well, it is first generation law and there will be lessons from its operation as time passes."
Castle said CRP would also look to work up a similar project offshore from the Namibian coast to reduce its exposure to a single project and that the company had been approached about other opportunities both land and sea-floor phosphate mining opportunities.
CRP shares closed today at 1.9c apiece, having fallen 93.4% over the past 12 months. Mr Castle acknowledged the proposed capital-raising would be "highly dilutive" at the current share price, and would prioritise existing shareholders.