Investment in resource extraction from New Zealand's vast Exclusive Economic Zone has taken a major knock today, with a decision-making committee of the Environmental Protection Authority rejecting an application from TransTasman Resources to mine ironsands off the seabed some 22 to 36 kilometres off the coast of Patea.
TTR issued a statement disclosing the rejection ahead of detail from the EPA, saying it was "extremely disappointed with the decision."
The company spent some $60 million over seven years developing the project, which it believed could be achieved in an environmentally sustainable way and create additional exports of around $150 million a year from the export of around five million tonnes annually of titano-magnetite iron ore to Asian steelmills, using a suction dredging process that would have returned 90 per cent of the sands to the ocean floor.
"We have put a significant amount of time and effort into developing this project including consulting with iwi and local communities and undertaking detailed scientific research to assess environmental impacts of the project," said TTR's chief executive, Tim Crossley.
"Our objective has been to develop an iron sands extraction project which achieves substantial economic development while protecting the environment.
"We will be carefully analysing the decision over the next few days and will take our time to consider what this means for the South Taranaki Bight project and for the company."
TTR has 15 days to lodge an appeal, but the next step in the company's plans was to raise as much as US$550 million in new debt and equity to fund the project, and had been working to a tight mid-year timetable to achieve that goal.
"The bottom line is our New Zealand staff and consultants now have a very uncertain future and the local community will not benefit from hundreds of new jobs and an estimated $240 million dollars increase in GDP, annually," said Crossley.
The result is a victory for Kiwis Against Seabed Mining (KASM), which mobilised large numbers of opposing submissions to the project ahead of hearings that lasted two months between March and May.
However, it is a blow to the government's desire to see mineral extraction projects become a larger part of the New Zealand economy and follows a major legislative and regulation-making programme to create a regime to manage the environmental impacts of activity in the EEZ under a fast-track regime administered by the EPA.
The second application under the new regime, from Chatham Rock Phosphate, which plans to mine phosphate nodules on the Chatham Rise some 450 kilometres east of Christchurch, is currently open for public submissions.