Subsea miner Nautilus Minerals has won its arbitration case against Papua New Guinea.
It comes after a prolonged impasse with PNG over their partnership in the Solwara 1 underwater mining project earlier this year.
The country held a 30 per cent stake in the operation.
Earlier this year Michael Johnston, Nautilus president and CEO, said that the miner has been willing to provide Papua New Guinea ownership of intellectual property rights.
But the problem, as Johnston told it, was that many of the deeds covering proprietary technology and subsea mining methods, which Nautilus and several partners developed over the years, did not contain clauses allowing for a third party, such as the Papua New Guinea government, to come on board as an additional partner and owner of the intellectual property rights.
Johnston described sensitive negotiations over the past few months in which Nautilus had to go to its partners,“household names” in the dredging business he gave as examples, to convince them to redraw the deeds to allow the Papua New Guinea government to gain direct 30 per cent ownership of the intellectual property rights.
Now Johnston said Nautilus has redrawn the deeds with its partners and delivered the new terms to the Papua New Guinea government.
Following this the two entered arbitration to come to a conclusion, with Murray Gleeson, AC QC issuing an award in Nautilus’ favour.
According to a release by Nautilus, the award includes “a declaration that the State was in breach of the State Equity Option Agreement signed by the parties in March 2011 in failing to complete the purchase of a 30 per cent interest in the Solwara 1 Project on 7 November 2011”, and “an order that the State is required to comply with its obligations under the agreement to complete the purchase of the 30 percent interest in the Solwara 1 Project and pay 30 per cent of all project expenditure incurred to date within a reasonable time after the award”.
The miner has now issued PNG with a notice requiring completion of these points on 23 October, with the total amount payable by the country coming to around US $118 million, including interest.
It added that “Nautilus looks forward to bringing the Solwara 1 Project into production and will work with the State in order to move the Project forward in light of the arbitrator’s award”.
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