From Paula Taumoepeau, Country Manager-Tonga, Nautilus Minerals, Tonga.

I would like to address specific issues raised in the media recently about Nautilus Minerals Tonga and the work it hopes to do in Tonga.

However, while our project is still at a very early stage there are some issues we are not in a position to address, eg mining waste or tailings, as the company is still assessing the various options.

The following are some of the questions that we would like to answer for your readers.

What type of operation is Nautilus doing and how are they extracting the minerals?

Currently we are an exploration company that has rights to explore offshore for minerals within certain areas of Tongan waters. Because we have only an exploration licence we cannot do any mining at this stage.

As an explorer we gather data and information, by conducting different types of surveys and studies. The exploration will tell us whether or not minerals exist on the seafloor. It will also tell us if the minerals are available in commercial quantity ie that it can be mined at a profit. The same process was carried out by the company in PNG. In PNG we have identified commercial quantity minerals and have applied for a mining licence so that we can proceed to the mining phase.

It is important to realize that exploration is a low impact activity. The first stages involve mapping and surveying the seafloor, environmental monitoring and sometimes some oceanographic work and water quality studies. When sampling is required, we obtain the appropriate permits from the local governments. Again, there is a legal process to be followed, which has checks and balances and regular avenues for stakeholder consultation.

From the government's point of view, early stage prospecting allows an assessment to be made of all resources in an area which can be used for policy formulation to balance the needs of a growing population against the need to ensure required conservation values are maintained. The studies we conduct during the exploration phase (e.g. seafloor surveying and mapping, environmental monitoring and sometimes oceanography and water quality assessments) add value without us necessarily developing an area - exploration does not necessarily lead to mining. To date all of this valuable scientific data we have collected in PNG has been provided to the PNG government on an annual basis, regardless of whether or not we intend to extract minerals from an area. The same will be done in Tonga.

If we find minerals in commercial quantity during the exploration or prospecting phase, we intend to apply to the government for a mining licence.

Would you conduct such an operation in your own country without environmental and economical impact studies?

As a responsible corporate citizen, Nautilus would always assess the environmental and social impacts of any of its activities, and acquire the required permits prior to commencement of such activity. The company focuses its exploration activity in the areas of the world where deposits are most likely to occur.

Would you do this operation 100km off the coast of Vancouver, Canada?

Our current focus is on areas where we believe the best mineral bodies to be. We believe the highest grades occur along back arc basins (such as that in Tonga and PNG) and less so mid-ocean ridges (such as those offshore Vancouver). The high grade of the deposits is one of the great benefits of this project - it allows us to produce more metal whilst impacting the minimum amount of material.

Will the Canadian government allow it? Why? Why not?

To date our focus has not been around Canada - simply because that is not where we believe the minerals to be. We cannot speak for any government, but we do believe there are many environmental and social benefits associated with this method of mineral extraction.

After retrieving the minerals what are you doing with the rest of what you have dug up?

During the exploration phase all material dug up will be taken and analysed in laboratories, not taken to the local landfill. All laboratory waste is disposed off as required by the legislation of the country where the laboratories are situated. Normal household waste from the exploration ships working in Tongan waters for the company will be taken to the Tapuhia landfill.

Nautilus Minerals congratulates Tonga on having a state of the art landfill facility like Tapuhia.

If we start mining in Tonga, we will have mining waste to dispose of. At this time the company is still examining the various options available to do this responsibly in PNG where we expect to start mining towards the end of 2010.

The current process of how we plan to extract minerals from the seabed in PNG is the following:
the Subsea Mining Tool (SMT) will be used to cut the rock from the seafloor. The material will then be transported to a surface vessel using the Riser and Lifting System (RALS). Once on the vessel the material will be dewatered on the vessel (ore separate from the seawater). The water will be treated and returned to the depths where it came from. The ore will be sent to the smelter to extract the relevant minerals.

It is important to note that compared to typical land based mining, seafloor mining has the potential to have lesser environmental impact. In the case of copper mining, due to the high grade nature of the material on the seafloor we will potentially need to mine 10 times less ore to produce the same amount of copper compared to conventional land based mining. As a result this significantly reduces the waste as less ore is required to obtain the same quantity of copper. Another point to note is that as the deposit sits above the seafloor there is potential for zero overburden (land-based mines can have up to 3:1 waste:ore ratio). Based on some preliminary calculations seafloor mining could have a footprint of approximately 40 times less than traditional land-based mining.

The company is still examining how to best process the mined material taken from the seafloor, before it is sold as ore concentrate to smelters. It is still too early in the project to tell how much, what kind, of mining tailings will be generated by the project. However, we can say we intend to develop together with the Ministry of Lands, Survey, Natural Resources and Environment and as required by the legislation, an environmentally responsible way to dispose the mining waste.

Are they safe and says who?

Prior to any mining a detailed Environmental Impact Assessment will be completed. A major part of the Environmental Impact Statement will address mitigating the impacts identified during the impact assessment and identify management plans to ensure these impacts are effectively mitigated. The work that we are doing in PNG has involved international experts from Duke University, Scripps Oceanographic Institute, CSIRO and James Cook University.

What guarantee do you have that fishing will not be harmed?

From our current work in PNG, we have found that most fish reside in the top 300m of the water column. We plan to operate much deeper than this, at 1,500-2,000m. From our work in PNG (including consultations with various fishing groups), it is envisaged that the impacts on fishing will be negligible.

Has anyone bothered to visit PNG and investigate the impact of the company's operation on their economy as well as the environment?

We would welcome any review of our activities in PNG.

NZ is known for its pro-environmental initiatives. Has anyone got their opinions?

We have collaborated with a number of world-renowned experts to date on our offshore project whose opinions we have taken on board. With our experiences in PNG we have also provided submissions to the Ministry for the Environment in New Zealand as part of their policy formulation process for activity in New Zealand's EEZ.

Environmental studies be made accessible to People's Representative in Parliament.

The social and environmental aspects of the project will be covered in a detailed Environmental and Social Impact Assessment (ESIA), and it is envisaged that this would be submitted to the Government of Tonga prior to obtaining permission to mine.