MAC Goliath Pte Ltd, owner of the production support vessel that is being built for seabed mining outfit Nautilus Minerals, said MAC has failed to pay the third instalment due on the contract for the vessel.
In a statement, Nautilus Minerals said it had been told by Fujian Mawei Shipbuilding Ltd, owner of the shipyard where the production support vessel is being built, that MAC had failed to make a payment of US$18M plus interest. The vessel is to be used by Nautilus and its partner in Papua New Guinea, Eda Kopa (Solwara) Limited, as the base for its seabed mining operations at the Solwara 1 Project site in the Bismarck Sea.
Under the contract between the shipyard and MAC, MAC is required to rectify the default immediately, and perform corresponding obligations under the contract. If MAC fails to remedy the default within 21 days of the receipt of a notice to MAC from the shipyard, the yard may rescind the contract.
In the event that the contract is rescinded, the shipyard has the right to either complete or not complete the vessel and to sell it in a complete or incomplete state.
In accordance with the terms of the contract, Nautilus Minerals Singapore Pte Ltd has the option to either remedy the default on behalf of MAC and/or replace MAC as a party to the contract by way of a novation or assignment within 14 days of receipt of the notice to the company from the yard.
Nautilus noted that the build of the vessel is progressing well, with construction more than 70% complete. The derrick substructure was recently delivered to the shipyard for installation on the vessel. Foundations for two of the three launch and recovery systems are being installed, the bulk cutter winch has been installed, work on the cargo handling system is progressing, and the 100-tonne and 200-tonne cranes have also been installed. The vessel was floated out in October 2016.
Nautilus said it is in discussions with the shipyard, MAC and third parties with respect to the default and potential remedies, and said it will issue further updates as matters develop.