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Who is involved in developing the world's first deep-sea vent mine?

Nautilus Minerals is poised to become the first company to begin seafloor mining of metals at hydrothermal vents, at a site offshore of Papua New Guinea. But who are the investors and contrators involved in the world's first deep-sea vent mine?

Shares in Nautilus Minerals are traded on the Canadian Stock exchange, and the investment interests of major shareholders are represented by their nominated Non-Executive Directors on the Board of the company. This post pieces together public information about the major shareholders in Nautilus Minerals. We’ll also have a look at where contracts for technology and services relating to the planned Papua New Guinea operations have now been placed. All figures and details here are from October 2015, however, and may change in future.

“Joint Venture” agreement with Papua New Guinea

On 11 December 2014, Nautilus Minerals overcame the final hurdle in preparation for mining hydrothermal vents at Solwara-1 near the coast of Papua New Guinea. A promised investment of $113 million from the Papua New Guinea government was released from escrow to Nautilus, and a Joint Venture formally created between Nautilus Minerals and a company representing the Papua New Guinea government, to administer the deep-sea mining.

Under the terms of the Joint Venture agreement, 70% of profits from the deep-sea mining will go to Nautilus Minerals, and 30% will ultimately go to the government of Papua New Guinea. At the moment, the deal is initially 85-15 in Nautilus’s favour; Papua New Guinea’s government has the option to increase its share to 30% if it makes further investment on behalf of its 7.1 million people.

But on the company side, where does the money come from, or go next if Nautilus’s profits become dividends to its shareholder investors?

Major shareholders in Nautilus Minerals

The two largest shareholders in Nautilus Minerals are currently (figures here are as of 5th October 2015): a company called Metalloinvest Holding (Cyprus) Ltd (which has a 20.89% stake); and another company called Manwarid Mining LLC (which has a 28.14% stake).

These are the start of chains that lead further afield: to Oman in the case of Manwarid Mining, and to a Russian oligarch and his billionaire associates in the case of Metalloinvest.

(shareholder info as of 2015)

To Russia with love

Metalloinvest Holdings (Cyprus) Holdings Ltd is a wholly-owned subsidiary of Metalloinvest JSC, which is in turn is a subsidiary of USM Holdings. USM Holdings is the company that manages the assets of one of Russia’s richest oligarchs, Alisher Usmanov. USM Holdings has three major shareholders: as of 5th October 2015, Alisher Usmanov himself owns 48% of stock, with other beneficiaries currently including Vladimir Skoch (30%) and Farhad Moshiri (10%).

Overall, these arrangements make Alisher Usmanov one of the the largest personal stakeholders in Nautilus Minerals. Indeed, his company Metalloinvest’s website lists Nautilus Minerals as an “auxilliary business”.

Usmanov lives in the UK (he owns Sutton Place in Surrey, previously a home of J. P. Getty) and made his fortune from plastic bags, cigarette imports, iron ore, telecoms and media. He currently owns a stake in Arsenal football club, and recently bought James Watson’s Nobel Prize medal at auction to return it to him.

The other two major shareholders in USM Holdings are Vladimir Skoch and Farhad Moshiri. Vladimir Skoch is the octogenarian father of pro-Putin politician Andrei Skoch, one of the richest members of Russia’s Duma parliament.

Ardavan Farhad Moshiri is Chairman of the Board of Directors of USM Holdings, in which he also has a 10% shareholding for his service to Usmanov. Moshiri studied accountancy at University College London, and worked for several accountancy firms in the UK, where he came into contact with Usmanov before going to work for him.

Moshiri has been a director representing Usmanov’s interests in many companies over the past ten years, including Non-Executive Director of Nautilus Minerals from 2007 to 2009. The current Non-Executive Director of Nautilus Minerals representing Metalloinvest’s interests is Mark Horn, a barrister and financial analyst who lives in the UK.

The Oman connection

Manwarid Mining LLC, which on 5th October 2015 held a 28% stake in Nautilus Minerals, is a wholly-owned subsidiary of MB Holding Company LLC. MB Holding LLC is based in Oman, and its billionaire founder and Chairman is Mohammed Al Barwani, who also currently serves as a Non-Executive Director of Nautilus Minerals. MB Holding LLC has considerable subsidiary interests in the oil and gas sector, in addition to mining.

Enter the dragon

So far we’ve looked at companies that are shareholders in Nautilus Minerals. But who owns the contractors that are now providing technology or services relating to vent mining operations at Solwara-1?

The contract to build the deep-sea mining ship required by Nautilus has been placed with Fujian Mawei Shipbuilding Ltd in China (and a ceremony to mark the first steel-cutting in that project took place last week), via an intermediary company in Dubai.

Nautilus has signed an agreement for ore mined at Solwara-1 to be shipped for processing in China by Tongling Nonferrous Metals Group Co. Ltd.

In early 2015 , a Chinese company also bought SMD Machines, a company based in Newcastle-Upon-Tyne, who have the contract to design and build the seafloor mining machines that will be used at Solwara-1.

Mawei Shipbuilding, Tongling Nonferrous Metals, and China Railway Rolling Stock Corporation (parent company of CSR Times Electric, which now owns SMD Machines in Newcastle) are all Chinese state-owned enterprises. So China effectively now has a major interest in deep-sea mining at Solwara-1, through the contracts providing the production ship, seafloor machinery, and ore processing.

Jon Copley, October 2015

UPDATE November 2019:

In May 2018, Anglo-American withdrew its investment in Nautilus Minerals.

In December 2018, the ship originally built for Nautilus Minerals' Solwara-1 project was sold to an oil/gas company.

In February 2019, Nautilus Minerals obtained a Canadian court order protecting it from creditors while restructuring and preparing to sell off assets.

In April 2019, Nautilus Minerals was de-listed by the Toronoto Stock Exchange, and four of the company's five directors and its Chief Executive Officer resigned.

In November 2019, Nautilus Minerals went into bankruptcy; a private venture (Deep Sea Mining Finance Limited), involving the two largest former investors in Nautilus, acquired the rights to the Solwara-1 prospect during the company's liquidation.