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A critique of the Nautilus Minerals environmental and social benchmarking analysis of the Solwara 1 project

From the report overview:

The Canadian mining company, Nautilus Minerals Inc. (hereafter Nautilus) is set to embark on the unprecedented extraction of metals from the sea floor. The mining project, known as the Solwara 1 project, proposes to extract gold and copper from the floor of the Bismarck Sea in the New Guinea Islands Region of Papua New Guinea (PNG). It is the first of a potentially large number of deep sea mining (DSM) projects within the Pacific Islands Region, including a number of other nearby tenements granted to Nautilus.

Globally, interest in DSM is burgeoning, with new areas being opened up to exploration almost monthly. The Indian Ocean, the Red Sea and the Clarion Clipperton Zone (58,000 km2 of international waters between Hawaii and Mexico) are just some of the world’s exploration hot spots.

Over the past decade, the Pacific Islands Region has also witnessed a frenzy of seabed exploration. Over 1.5 million km2 of ocean floor in the south- west Pacific alone is under exploration leasehold to private companies and Government-company joint-ventures within both territorial and international waters.

Despite issuing exploration licences (and in the case of Solwara 1 an exploitation licence), Governments and the International Seabed Authority still lack the regulatory frameworks and decision making tools to ensure the well being of coastal and island communities and the marine ecosystems they rely on.

Nautilus commissioned United States based consultancy firm, Earth Economics (EE), to produce the Environmental and Social Benchmarking Analysis (ESBA) of the Solwara 1 project. Published in May 2015, Nautilus and the consultants consider the report a groundbreaking analysis of DSM using natural capital accounting and an ecosystem goods and services framework.

According to the ESBA report, the primary goal of the analysis is to measure the social and environmental impacts of the Solwara 1 project in comparison to three terrestrial copper mines, as a tool for good decision making. In the words of EE:

“This study provides a social and environmental review of the Solwara 1 project. It provides a preliminary framework that examines the ecosystem goods and services that may be enhanced, degraded, or consumed by the Solwara 1 project in Papua New Guinea. This study also sets out the first ever natural capital accounting and ecosystem goods and services framework for seabed mining. The Solwara 1 project is compared to modern existing and proposed terrestrial copper mines. Increased recycling and replacement of copper as alternatives to mining and the smelting process are also examined.”

However, as we explain below, the ESBA falls well short of its own stated goals and does not provide the critical analysis needed for strengthened decision making. While it employs a structure adapted from an internationally recognized natural capital accounting process, it fails to meet the well accepted requirements of a cost-benefit analysis (CBA). A CBA would identify major social and environmental concerns associated with Solwara 1 and attempt to quantify impacts as meaningfully as possible. It would seek to estimate the net benefits of the proposed deep sea mine against its net impacts. Without a CBA, the ESBA is of little value to public policy and DSM decision-making.

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