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Neptune sees attractive margins in seafloor massive sulphides
2 July 2008, Source: Neptune Minerals and Lindsay Clark - Attractive economic margins are possible from mining seafloor massive sulphides on deep undersea volcanoes in New Zealand waters, an engineering scoping study for Neptune Minerals indicates.
The seafloor massive sulphides (SMS) contain high grades of gold, copper, zinc and silver.
The scoping study was prepared for Neptune by Technip a major French oil and gas industry engineering and technology firm.
Neptune says that the SMS deposits held by Neptune internationally have a typical in ground value per tonne of US$500 to US$2,000.
Using the Technip calculations, Neptune says that the total capital and operating expenditure per tonne for its SMS mining of its deposits would be in the range of US$145-US$162. This included mining, lifting, dewatering and maintenance and replacement costs. This cost however did not include onshore bulk handling, metal refining and processing.
Neptune’s chief executive officer Simon McDonald said the study’s cost per tonne highlights the attractive margins possible in SMS mining.
Dr McDonald said it further reinforced the company’s expectation that pilot mining phase of commercial development of SMS mining by the end of 2010 is an achievable goal.
Technip’s recommended mining system incorporates a dynamically-positioned production vessel, a flexible production riser and an airlift pumping system connected at the seafloor to an ore crusher and seafloor miner.
The system considered by Technip was for a nominal 10 year SMS mining project, commencing with pilot mining to optimise the technologies before stepping up to full production of 2 million tonnes a year.
Project costs over the 10 year scenario (in 2010 US$ terms) for 16.2 million tonnes mined are: operating cost per tonne of US$91 million and total capital expenditure of US$501 million.
Neptune is planning a long-term advanced exploration programme in New Zealand waters called Project Trident which aims to define multiple SMS deposits over which mining licence applications will be made.
Neptune is evaluating contract mining options with international dredging and subsea engineering companies, whereby a contractor would build, own and operate all the mining production assets. This would significantly reduce Neptune’s capital expenditure for a minor raise in operating costs.