THE WORLD’S first seabed mine is a step closer to reality, with Nautilus Minerals solving the project’s “critical factor” by securing charter of the first ship to be involved in the operation.

The Bismarck Sea-based Solwara 1 project will look to extract high-grade copper and gold from the seafloor, with recent activity around the project being dominated by the question of securing an appropriate vessel to move the project forward.

Chief executive Mike Johnston described the deal as a “significant milestone” for the company.

The ship, which is expected to be delivered by 2017, will be 227 metres long, 40 metres wide and will be able to accommodate up to 180 people and generate about 31 megawatts of power.

“All of the below deck mining equipment will be installed in the vessel during the build process to minimise the equipment integration to be completed following delivery of the vessel,” Nautilus said.

The company will pay Dubai-based Marine Assets Corporation (MAC) US$199,910 per day for use of the vehicle, which has been secured on a minimum five-year contract.

“We…look forward to working with Marine Assets Corporation and the shipyard in seeing the delivery of our first vessel and making seafloor mining a reality,” Mr Johnston said.

MAC, which specialises in the delivery of new build support vessels for the offshore industry, will own and provide management of the vessel, with Nautilus having the option to extend the charter or buy the ship at the end of the agreement.

MAC will work with south-east China-based Fujian Mawei Shipbuilding to design and build the ship, with the contracts having been officially inked in late November.

Nautilus will pay MAC a US$10 million deposit following the payment by MAC of the first instalment under the shipbuilding contact.

“A further charterer’s guarantee of US$18 million will be provided to MAC by the Solwara 1 joint venture on the commencement of the charter of the vessel,” Nautilus said.

Nautilus said MAC had a proven track record in the turnkey delivery of new build vessels constructed to international standards.

“Over the last 10 years, MAC has overseen and participated in the successful delivery of over 30 vessels from shipyards in China,” it said.

“New build supervision is a speciality of MAC, with an on-the-ground Chinese and Chinese speaking team supported by an international management team.

“We are excited to achieve this significant milestone and secure a vessel contract with such an experienced vessel provider as MAC.”

The deal is a significant step forward for Solwara 1 after a long-running dispute between Nautilus and the PNG government had threatened to derail the project.

The two parties found common ground in April by signing a joint venture agreement under which the government elected to acquire a 15% stake in Solwara 1.

In May the government paid US$113,000,000 into escrow to form the joint venture, with the partnership to become officially active following MAC’s payment of the first instalment under the shipbuilding contract.

“Nautilus looks forward to working closely with the state nominee on the project, which will generate significant economic activity within the state and the province of New Ireland,” the company said.

Mr Johnston said the company looked forward to the signing of the shipbuilding contract and the release of the US$113 million from escrow.

Nautilus announced in its September quarterly statement that it had succeeded in the mechanical and hydraulic assembly of Solwara 1’s auxiliary cutter and collecting machine.

It had US$29.9 million in cash and cash equivalents at the end of the September quarter.