WELLINGTON, New Zealand,
July 4, 2019 /CNW/ - Chatham Rock
Phosphate (NZ: CRP, TSX.V: NZP) ("CRP" or "the Company") provides a
further shareholder and stakeholder briefing. In this issue
we will cover:
- Recent Food Safely announcement
- Ngati Mutunga Accord
- Chatham joins World Oceans Council
- Financing News
- Permit Reapplication Process and Trans Tasman Resources
- Chatham Rock Phosphate is an ethical fertiliser source
- Rare earths progress report
- A summary of our environmental, food safety and other
benefits
Food Safety Coup
Chatham Rock Phosphate recently advised shareholders of a huge
food safety win arising from the ultra-low cadmium levels in our
rock phosphate. This has occurred due to a final decision
being taken by the European Parliament and the European Council to
limit the sale of phosphate-based fertilizers containing high
levels of heavy metals everywhere in the EU from 2022 and to
introduce voluntary green labelling for fertilizers with less than
20 mg Cd/kg P2O5, starting this
year.
The decision is aimed at improving the safety and sustainability
of agriculture in Europe, as well
as reducing risks to human health and the environment around the
world.
The decision of the European Council is the final step to
establishing the cadmium limit in phosphate-based fertilizers
across Europe. EU-wide cap on
cadmium levels will come into full effect in 3 years.
As the EU ban on high cadmium levels has arisen due to food
safety concerns, it would be logical to assume that similar
restrictions will occur in other regions. There have been voluntary
restrictions in place in New
Zealand for many years.
A number of European countries as early as the 1980s already
recognised the importance of this issue and unilaterally introduced
strict cadmium limits for fertilizers. Limits are currently in
place in 21 EU countries, with the strictest in Switzerland, which limits cadmium to 21 mg/kg
P2O5 in 1986, Sweden (44 mg / kg
P2O5), the Netherlands (31 mg/kg
P2O5), Hungary and Slovakia (20 mg/kg P2O5) and Finland (22 mg/kg P2O5).
The good news for Chatham Rock Phosphate shareholders is that
cadmium levels in Chatham Rise rock phosphate are among the lowest
in the world. Our phosphate rock, located on the Chatham Rise
seabed east of New Zealand shows
an average of 2.2 parts per million.
Rock phosphate is already the scarcest of the three fertiliser
constituents used to sustain world food and primary sector
production. And if world-wide sales restrictions are placed on the
estimated 95% of that resource affected by excessive cadmium levels
the likely effect on the market value of the remaining 5% of traded
phosphate rock (and its producers) can only be imagined. Our
deposit could likely become a very strategic asset
indeed.
Ngati Mutunga Agreement
In April Chatham Rock Phosphate executed an Information Sharing
and Collaboration agreement with Ngāti Mutunga O Wharekauri AHC
(Ngāti Mutunga).
Ngāti Mutunga is a wholly owned subsidiary of Ngāti Mutunga o
Wharekauri Iwi Trust, based on the Chatham Islands and has a
significant interest in protecting the Chatham Islands marine
environment and securing the economic, social and cultural
well-being of the Chathams community.
CRP holds a mining permit to extract rock phosphate from an
offshore area located on the Chatham Rise (the Project).
Following discussions between Ngati Mutunga and Chatham the
purpose of the agreement is to formally collaborate on the Project
with a view to:
- Developing a CRP Marine Consent application that meets the
environmental, economic, social and cultural objectives of both
Parties individually and together;
- In the event that the content of such an application is
mutually agreed, to formally support the lodging of the CRP Marine
Consent application for approval;
- In the event that the CRP Marine Consent application is
successful, ensuring that all operations implemented under that
consent are carried out in in a manner that best mitigates
environmental effects and respects indigenous rights, beliefs and
customs to protect the interests of the Chatham Islands community;
and
- Ensuring that the Chatham Islands community realises tangible
benefits from the Project.
The first objective is to arrange close engagement with the
Chathams community to ensure that the Project proceeds in a form
that satisfactorily addresses both the reasonable concerns and
aspirations of that community. The agreement will be a
success if it results in formal community support for the
Project. If mutually agreed ways of addressing reasonable
community concerns and aspirations cannot be found then the terms
of the agreement will no longer apply.
Ngāti Mutunga is proposing to make a significant future
investment in Chatham Rock Phosphate if the agreement proceeds and
the Marine Consent is obtained. In those circumstances Ngāti
Mutunga and other Chatham Island
interests including the Chatham Island Enterprise Trust would
receive options that are in total equal to 15% of the number of
shares on issue at the time a Marine Consent that has their support
is granted. The exercise price of these options would reflect and
recognise the accumulated investment made to that date by our
shareholders.
Chatham joins World Oceans Council
In January this year Chatham Rock Phosphate continued to build
on its commitment to responsible marine mining by joining the World
Ocean Council (WOC), the international business leadership alliance
for "Corporate Ocean Responsibility".
It's a reality that key minerals such as phosphate are critical
to human survival and marine sources for phosphate will play an
increasingly important role as terrestrial sources become depleted
and the procedures and technology for responsible extraction are
developed.
The WOC provides a unique global industry platform for
responsible marine mining operators to collaborate and to engage
with other ocean industries and stakeholders on responsible use of
ocean resources.
Financing News
Chatham has raised a further $700,000 during 2019 by means of two private
placement initiatives and intends to raise further funds this year
to continue to progress the marine consent reapplication once the
way forward is clarified (see below).
A very wide range of fund sourcing options is being
systematically worked through and at the time of writing it's
presently looking more likely that this funding could come from a
major corporate player in a relevant industry.
Marine Consent Reapplication Process
As previously advised, a scoping review was undertaken in 2018
by independent advisers and our project director. It was intended
to be reviewed by independent experts retained by the EPA and the
feedback from that review (a significant milestone) would provide
Chatham with guidance on the content of the final application.
However, the outcome of the Trans Tasman Resources court case,
and the subsequent counter appeal, are very relevant to the way in
which our application will be framed. To clarify, neither possible
outcome of the counter appeal will be a show stopper for Chatham,
indeed once that is known it will be a much clearer and better
defined pathway going forward. Hence the temporary parking of our
application in order to optimise the effectiveness of the
reapplication and to minimise the related
cost.
As previously advised to shareholders, preparation of that
application is expected to take at least a year, involving updates
to a large number of supporting scientific reports and the likely
need to gather more environmental data from the permit
area. However, this next stage in the process cannot start
until we have raised further capital and obviously achieving that
objective is our number one priority.
Chatham Rise Rock Phosphate Contribution to Water
Quality Objectives
The Government has announced an intention to achieve a
noticeable improvement in water quality within five years and
released a blueprint to improve freshwater quality.
This is an issue Chatham Rock Phosphate has highlighted for
several years, as we have a proven, very effective solution to the
problem. In 2012 we provided detailed briefing notes on this to the
then Minister for the Environment and said:
Chatham Rise rock phosphate, being a direct application
fertiliser, offers the solution to run-off into waterways as a
range of scientific studies over many years has shown direct
application rock phosphate offers strong environmental
benefits.
CRP has evaluated studies comparing the use of rock phosphate
and super phosphate on New Zealand
and international farmland. They show when applied directly
reactive rock phosphate (RPR) is both a highly effective sustained
release fertiliser and resistant to leaching.
The findings of the studies – some of which go back several
years – are supported by Dr Bert
Quin, probably New
Zealand's pre-eminent expert on the use of rock phosphate as
a fertiliser, who first conducted extensive field trials while
working as a scientist for government agencies during the
1980s.
Dr Quin believes nutrients continue to enter waterways from
agricultural land simply because of the type of fertilisers we use.
He says the traditional fertilisers used in New Zealand have
been single superphosphate ('super'), which supplies phosphorus (P)
and sulphur (S), and urea for nitrogen (N).
He says their biggest problems are that they are 'leaky'
fertilisers.
"Super is prone to run-off of applied phosphorus into waterways
in the weeks after application, leaching into shallow sub-surface
drains and water bodies on dairy farms, and being leached right
through soils with low phosphorus retention such as those in
Northland and the West Coast. Urea is prone to volatilisation
(evaporation) losses as ammonia gas to the atmosphere, nitrate
leaching and nitrous oxide GHG emission.
"By far the most cost-effective option for phosphorus is
reactive phosphate rock or 'RPR'. This is a natural mineral, formed
on the sea floor originally, which is a very effective source of
sustained-release phosphorus, ideal for maintaining high-producing
pasture and extremely resistant to leaching.
Dr Quin estimates switching from super phosphate to RPR and
blends of RPR and high analysis P (TSP, MAP and DAP) would reduce
average run-off losses of P into waterways by 80-90%.
Dr Quin's company is importing RPR from Algeria, and welcomes a variety of low cadmium
content true RPRs becoming available to NZ farmers.
Chatham Rise project offers an ethical and secure local
source of rock phosphate
In recent months there has been considerable publicity
concerning the controversial importation of West Sahara phosphate
rock by Ballance and Ravensdown.
Western Sahara has been
disputed since 1975, when Morocco
claimed it as part of the kingdom and the Polisario fought a
guerrilla war for the Sahrawi people's independence.
Both New Zealand fertiliser
manufacturers source a large part of their phosphate rock supply
from that area, so the implications for farmers and the
economically important agriculture sector are serious. Agriculture
sector exporters including Fonterra and the meat companies will be
increasingly required to certify that their products were produced
using only ethical inputs.
Ballance and Ravensdown both continue to maintain they have no
acceptable alternative source of supply despite there being a
number of other rock phosphate sources overseas and, right on their
doorstep, there is of course Chatham Rise rock phosphate. Our rock
has been tested by both co-ops during the last decade and hence
they are well aware of its properties.
Rare Earths Progress Report
Chatham is still in a dialogue with both local and overseas
parties concerning research projects aimed at separating valuable
by-products (including rare earths) contained within the sandy
seafloor matrix that contains the rock phosphate deposit. Research
will also investigate the feasibility of extracting rare earths
also contained in the rock phosphate nodules. 15 of the 17 known
rare earths are present in these nodules.
Successful recovery of even a small proportion of these
by-products could add significantly to our revenue and
profitability and also establish a strategic ocean-floor asset for
New Zealand.
A summary of our Environmental, Food Safety and other
Benefits
You can and should be our advocates whenever our project is
raised in conversation. To remind you why the Chatham Rise
project remains hugely important for New
Zealand, here are the key reasons:
- Our rock is a proven reactive phosphate rock. Using it results
in much less run-off into waterways and an improved soil profile
compared with the effects of manufactured fertilisers.
- It's also an organic fertiliser with no additives being added
and with the only processing being grinding and possible
pelletisation
- It also contains ultra-low levels of cadmium, a cancer-causing
heavy metal with much greater concentrations in other rock
phosphate deposits
- Being locally sourced and needing to be applied less frequently
results in much lower carbon emissions (in effect increasing the
present NZ electric vehicle fleet from 10,000 to 29,000
vehicles)
- The environmental footprint of seabed extraction is much
smaller than the impact of onshore phosphate on local communities
overseas
- The rock is within one day's sailing distance and supply is far
more secure (and more ethical) than phosphate rock imported from
unstable regions on the other side of the world
- The project economics are attractive and Chatham will pay
significant royalties and income taxes
- The project will generate new jobs in environmental monitoring,
on the mining ship, in the home port and in the science and
agricultural sectors
- Chatham Rock phosphate has been
independently demonstrated to be as effective as other phosphate
fertilisers used in New Zealand.
The omission (most recently demonstrated in recent media reports)
of the two fertiliser co-ops to even acknowledge its existence is
hard to understand as using our product would provide them with a
green fertiliser alternative that would naturally complement their
other fertiliser products.
See also our online interactive infographic at
http://www.rockphosphate.co.nz/projectinfographic
Regards
Chris Castle, Managing
Director
Neither the Exchange, its Regulation Service Provider (as
that term is defined under the policies of the Exchange), or New
Zealand Exchange Limited has in any way passed upon the merits of
the Transaction and associated transactions, and has neither
approved nor disapproved of the contents of this press
release.
SOURCE Chatham Rock Phosphate
