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Chatham Rise Progress Report

PROGRESS REPORT - CHATHAM RISE ROCK PHOSPHATE PROJECT

Widespread Energy and Widespread Portfolios jointly applied in August 2007 for a prospecting licence over a 3,048 km2 area 600 km east of Christchurch in April which includes significant seabed deposits of rock phosphate (also known as phosphorite) and other potentially valuable minerals.  

Recently Crown Minerals released revised draft terms and conditions for the prospecting licence and the Widespread Joint Venture is now working with Crown Minerals to seek agreement on the permit details.

Approval for the prospecting permit had been delayed while the government developed suitable guidelines for regulating marine mining and mineral exploration.

“We are most gratified by the progress that has recently been made in the licensing process as our project has, since it was first announced, attracted considerable interest from fertiliser industry participants, both local and overseas based” according to Widespread Portfolios managing director Chris Castle. 

The strong corporate interest centres on the potential of a major new rock phosphate source at a time when the rapid increase in demand for biofuels is promoting substantially increased demand for fertilisers and ongoing increases in fertiliser prices.

Fletcher Challenge Corporation, and other companies explored the area first in the 1980s. Rapidly increasing superphosphate prices and advances in underwater mining technology, such as that now being undertaken by Neptune Minerals and Nautilus Minerals, means that mining of submarine mineral deposits is now much more feasible. 

The phosphorite resource may exceed 100 million tonnes (with a current market value of more than NZ$50 billion).

The Widespread Joint Venture (90% Widespread Energy, 10% Widespread Portfolios) plans a two-year work programme that, if successful, will be followed by more detailed exploration and evaluation. This will include feasibility studies updating the work already undertaken 25 years ago reflecting today’s new technology and different costs.

The advances in technology include global positioning systems (GPS) that now make it possible to precisely mine the seabed with automated equipment.

“Recently published results of feasibility studies carried out for deep sea miner Neptune Minerals are very encouraging,” Mr Castle said.

“Our license application has been surrounded by a subsequent application of 71,750 sq km by Auckland company Chatham Phosphate Limited 

Recent major increases in the market value of rock phosphate (from US$50/tonne to US$375/tonne in the last two years) means profitable exploitation of this marine mineral deposit is now more likely to be feasible.

At present virtually all of the rock phosphate used by the New Zealand fertiliser industry is imported from Morocco.  Increasing freight costs are exacerbating the problem. So a New Zealand based and owned resource could well benefit all farmers and other stakeholders in the agricultural sector by lowering fertiliser prices and also reducing the exposure of the sector to exchange rate fluctuations and increasing transport prices.     

For and on behalf of the Board,

Chris D Castle

Onekaka, 22 June 2009