TORONTO (miningweekly.com) – Marine mining hopeful Nautilus Minerals on Tuesday said it continued its attempts to work with the Independent State of Papua New Guinea (PNG) to resolve a dispute surrounding the development of the Solwara 1 marine-mining project amicably.
Despite the company preparing to go to arbitration, it said it preferred to settle the matter outside of the arbitration process, even though it would have to be ratified by the State's national executive counsel (NEC), following a recommendation by the State's nominated team. PNG elections are currently under way and it could be some months before a new NEC is formed and able to meet.
“Nautilus confirms its preference is to resolve matters without going through an arbitration process and it is taking steps to meet with the State's representatives with the aim of achieving this outcome,” the company said in a statement.
Nautilus added that PNG had now served it with a second notice of arbitration on July 13, relating to further disputes with regard to certain statements made by the parties and whether such statements were made in accordance with the agreement dated March 29, 2011.
TSX-listed Nautilus early in June said it might have to slow or defer development of its Solwara 1 seafloor copper/gold project, owing to a dispute with the State, which owns 30%.
Nautilus had initiated the dispute resolution process by filing a notice of arbitration against the PNG government on June 1, owing to a disagreement about the parties' obligations in the completipon of the contract and alleged that the State had not paid its share of project development costs.
But the PNG government countered by asserting that Nautilus had not met certain obligations on which completion of the transaction was dependent, arguing that the company had breached the agreement and that the State was entitled to terminate the agreement.
Nautilus refuted these claims, maintaining that it was the State that breached the agreement.
The two parties had now agreed on the appointment of former Chief Justice of the High Court of Australia, the Honourable Murray Gleeson, as the arbitrator.
The arbitration will be conducted in Sydney, Australia, under the United Nations Commission on International Trade Law’s arbitration rules, and may take several months to conclude, provided that Nautilus and the State comply with the timetable set by the arbitrator and otherwise act within the rules.