Phosphate miner cries foul over 'premature' EPA report
By Pattrick Smellie
Aug. 19 (BusinessDesk) - Chatham Rock Phosphate is crying foul over the publication of a report by staff at the Environmental Protection Authority concluding it cannot recommend approval for the company's proposed seabed mining operation, saying the report is "premature" and that the government agency failed to take account of the NZAX-listed company's obligations to the market for continuous disclosure of material events.
CRP's managing director, Chris Castle, says in the statement first released late last evening that the report "should have not have been issued until the information requested of CRP was provided."
Shares of thinly traded CRP fell 10 percent to 18 cents a share in early trading of 5,500 shares of the company's 160 million issued shares on the NZAX this morning, its lowest level since January 2012.
The company had gained a two week extension to EPA deadlines to answer a range of additional questions from both the agency and submitters on the project, which seeks to mine phosphate nodules off the seafloor on the Chatham Rise, some 400 kilometres east of Christchurch, for up to 30 years. CRP also halved the size of its initial marine consent application area and has delayed its planned listing on London's AIM exchange until after hearings on the proposal conclude. That is scheduled for late this year.
A decision-making committee (DMC) of experts has been appointed by the EPA to hear the application, the second for a marine consent involving seabed mining since a new regime governing economic activity in the Exclusive Economic Zone came into effect last year. The first application, for ironsands mining off the coast of Patea, was rejected in June and is to be appealed by the applicant, Trans Tasman Resources.
EPA staff reports are an input to the DMC's process, but the CRP staff report is far tougher on the project than its first report on the TTR application.
It found the range of environmental uncertainties both from the mining itself and the sediment plume it would create were too great to be able to recommend the project "as it stands, but recognise that there is more information to be provided, which may change our view.”
Castle said CRP would "never expect a report at this stage in the process to recommend approval. Otherwise what is the point of all of the additional information, the caucusing of expert witnesses, and the weeks of hearings that are still ahead?
“Of course there are uncertainties. That’s what this whole Marine Consent process is designed to identify and clarify.
“It was unnecessary for the staff report to come out prior to us completing the additional information that was requested. I understand the report should not be too late in the process (as it was with Trans Tasman Resources) but I think in this case it was too early," said Castle.
“My other key concern is the EPA issued the report without any reference to us, in the middle of a business day. We are a stock exchange listed company and need to ensure our investors are continually informed. We had expected that the EPA understood the issues that would be caused by their releasing a huge swathe of information without us having the opportunity to assess the information and advise our shareholders.
CRP argues New Zealand agriculture's reliance on imported phosphate, used for fertiliser, could be replaced by phosphate from the Chatham Rise and potentially create a new export industry.
The bid is strongly opposed by the commercial fishing industry, which is prevented from bottom-trawling in a much larger zone that includes the mining permit application area.