One of the world's most ambitious mining proposals - to extract seafloor minerals at depths of almost 5km - is a step closer to fruition.
Toronto-listed Nautilus Minerals, in a billion-dollar bid to access the minerals, has agreed to charter a yet-to-be-built specialist $US100million ($NZ128.7million) production ship.
The company chairman, former Earnscleugh gold dredging operator Geoff Loudon, said agreement was the culmination of almost 20 years' work on ''massive sulphide deposits'' on the seafloor near Papua New Guinea.
''Against all odds, we have now progressed the project to the ship-building stage and have on board the Papua New Guinea Government as a 15% shareholder in the project,'' Mr Loudon, who is based in Christchurch, said.
Deep-ocean floor minerals were discovered in the Bismarck Sea about 1990 by Australian geologist Dr Ray Binns and other marine scientists with the Csiro.
The project, which has cost Nautilus more than $US400 million already, is expected to have cost nearly $US1 billion by the time it is operational, in about three years.
The vessel, 227m long and 40m wide, will have accommodation for 180 people and be able to generate about 31megawatts of power.
Dubai-based Marine Assets Corporation (Mac), a specialist in supplying support vessels for the offshore resources industry, will own the ship and charter it to Nautilus, for a minimum of five years.
The charter rate is $US199,910 per day, or about $72.6million a year, or more than $360million over the five years.
Mr Loudon said the Nautilus proposal, which has been granted the first mining lease for such seafloor deposits, was environmentally friendly in that the seafloor area to be mined was just 11ha in size, meaning minimal waste and no tailings.
It would operate in depths of 1500m to almost 5000m, with some of the $US100million seabed equipment.
Four-hundred-tonne cutting and collecting machines would cut the ore and load it into a pipe riser system, then up to a production support vessel.
Mr Loudon was until August operating the Earnscleugh alluvial gold dredge near Alexandra, and is principal in the L&M Group of exploration companies, which have been operating mainly around the South Island for more than two decades.
Nautilus' Sydney-based chief executive, Mike Johnston, said securing the vessel contract was a ''significant milestone'', and highlighted the experience of Mac.
Over the past decade, Mac has delivered more than 30 vessels from Chinese shipyards.
''We appreciate the continued support we have received from Eda Kopa, our joint venture partner, in reaching this milestone, and, together with them look forward to working with Mac and the shipyard in seeing the delivery of our first vessel and making seafloor mining a reality,'' Mr Johnston said in a recent market update.
Mac is set to contract with Fujian Mawei Shipbuilding Ltd, based in Fujian province in southeastern China, to design and build the vessel to Nautilus' specifications.
The ship is expected to be ready by the end of 2017.
The joint venture, named Solwara 1, has been formed by Nautilus and the Government of Papua New Guinea's nominee company, Eda Kopa (Solwara) Ltd.
New Zealand's only current seafloor mining proposal is that of Chatham rock phosphate.
It is proposed phosphate nodules be suction-dredged from the Chatham Rise seafloor, at depths of up to 400m.
A six-week hearing with the Environmental Protection Authority (EPA) for a marine consent is nearing an end.
A decision is expected by year end. An offshore Taranaki iron sand proposal by Trans-Tasman Resources, declined in July by the EPA, may yet be appealed in court.
In April this year, the PNG Government signed an agreement with Nautilus to take a 15% interest in the project and also paid a non-refundable $US7 million deposit to Nautilus.
In May, the PNG Government put $US113million into escrow, representing the balance of its 15% project interest, up to the time of first production.
