Success could mean the value of the rare earth minerals would ''dwarf'' the multimillion-dollar value of the initial target, phosphate nodules trapped in the seafloor sand, Chatham's chief executive, Chris Castle, said.
Chatham's plans are to suction up and separate out phosphate nodules from the seafloor at depths of up to 450m, taking up to 1.5 million tonnes a year, but during seafloor sampling several years ago it had identified, quantified and valued the rare earths present, Mr Castle said.
''We already know that they will be coming up with the nodules. The present work is aimed at learning how to separate them from the slurry as it crosses the ship.
''Nodules are easy to separate; minute particles of rare earths less so,'' Mr Castle said.
In some industries, the 17 rare earth minerals are considered to be the new ''green mineral'' future of the renewable energy sector, with uses in solar energy applications, catalytic converters, lighting, magnets and the development of massive-capacity batteries for e-cars and houses.
Rare earth mineral prices have soared in recent months as 97% global supplier China delivered less to the world.
''The value of these rare earths dwarfs the value of the phosphate, even though rock phosphate annual revenues are projected at $270 million,'' Mr Castle said. ''A recovery of only 1% of the rare earths would be very significant.''
He said the company was about to commission a research project with an unnamed ''local university''.
''The research will be aimed at separating valuable byproducts, including rare earths, that are also contained within the sandy seafloor matrix that contains the rock phosphate deposit,'' Mr Castle said.
About three weeks ago, Chatham launched a $1.24 million capital-raising programme as it prepares for a second application to gain a marine consent from the Environmental Protection Authority (EPA) for its Chatham Rise phosphate project.
Its previous attempt, after it spent about $33 million on research and development, was turned down by the EPA in February 2015.
Mr Castle said given Chatham's proposed phosphate recovery process would already bring seafloor sands to the surface vessel there would be no mining cost involved, just the cost of separating the rare earth byproducts from the sand, which was yet to be worked out.
''Successful recovery of even a tiny proportion of these byproducts could add significantly to our future revenue and profitability prospects and also establish a strategic ocean floor-based asset for New Zealand,'' Mr Castle said in a statement.
Byproduct mining has provided a cash boon for New Zealand's largest miner, Oceana Gold, in the Philippines. The byproduct of its gold extraction there is copper, which offsets the cost of producing gold by at least several hundred dollars per ounce.
Mr Castle cautioned there was no certainty the rare earths could be recovered, so would not identify the actual rare earth elements Chatham's sampling programme had found.
