SINGAPORE - Keppel Corporation is kickstarting new capabilities in the nascent field of seafloor mining by striking up a joint venture with Lockheed Martin subsidiary UK Seabed Resources to apply for a seabed exploration licence.
The JV, Ocean Mineral Singapore Pte Ltd (OMS), is seeking a licence with the International Seabed Authority (ISA), a United Nations body that administers seabed mineral harvesting. The licence will allow OMS to explore several kilometres below the ocean's surface for polymetallic nodules, or seabed rock containing copper, nickel, cobalt, manganese and rare earth minerals.
OMS is 78.1 per cent backed by Keppel's wholly owned, Ocean Mineral Singapore Holding Pte Ltd, with the remainder held by UK Seabed Resources and Singapore-based private investor Lion City Capital Parters.
"With Keppel's many years of offshore and marine experience, this could be an exciting opportunity to emerge at the forefront of the industry should the application be successful," said Ong Ye Kung, director of OMS. Mr Ong, a former People's Action Party election candidate, is now Keppel Corporation's director of group strategy and development.
OMS's application will be considered by the ISA in July. Keppel declined to specify which region the licence is for.
In the past, ISA has granted exploration licences for polymetallic nodules that last typically 15 years.
It has also approved exploration activity in two areas: the Clarion Clipperton Fracture Zone in the Pacific Ocean that is south and southwest of Hawaii and the Central Indian Basin in the Indian Ocean.
OMS's partner, UK Seabed Resources, has separately applied for a similar licence to explore polymetallic nodules in the Clarion- Clipperton Fracture Zone.
As with oil and gas exploration, mining has progressively moved offshore with land-based resources growing scarcer. While the harvesting of these nodules from the ocean floor at depths of several kilometres was previously seen as uneconomic, nodules can now be brought to the surface as a result of new technological developments using a combination of remotely operated or autonomous underwater vehicles, pumps and riser pipes.
The metals in the nodules can be supplied to the construction, aerospace and alternative energy industries. While diamonds have been mined off the coast of Namibia, only one ocean mineral mining project between the Papua New Guinea government and Canadian mining company Nautilus Minerals has progressed past the exploration phase so far.
However, progress in the Solwara project has stalled over unresolved financial issues between both parties. Speaking to BT about subsea mining, IHC Merwede, which builds dredging and mining vessels and equipment, said seafloor mining has some advantages over land-based mining.
"The advantage of a mining vessel is that it can move from mining site to mining site without having to uproot the permanent infrastructure which keeps land-based mines fixed in position," said IHC Merwede, which has established a joint venture to deal with contract offshore mining in Singapore.
However, seafloor mining's complexities arise from having to lift mined material up over large distances to the surface and the heightened water pressure that is many times that of the atmosphere's, it added.
DBS Vickers analysts said Keppel's new venture was a way to diversify the group's offshore and marine capabilities, which has been facing keener challenges from Chinese and Korean competitors.
"It is too early to judge the new development as we are unsure of the viability of this project and access to details is limited," said the house in a note. "It seems to be an exciting opportunity that could aid mid-to-long term growth of Keppel, though it also comes with higher operational risks."
Keppel Corp shares closed 13 cents higher at $11.32 on Monday.
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