The Environmental Protection Authority says its staff cannot recommend Chatham Rock Phosphate's application for a marine consent to mine phosphate from the Chatham Rise.
The company has a permit under the Crown Minerals Act to mine 820 square kilometres of seabed on the Chatham Rise, about 450 kilometres off the Canterbury coast. The marine consent is the final step in determining whether it will proceed.
The EPA says mining the area, using a conventional drag-head to remove up to half a metre of the seabed, has the potential to adversely affect fish, marine mammals, seabirds, human health, commercial fisheries and Maori and Moriori cultural interests.
The authority says the proposed mining activity would destroy many sensitive species, including coral, sponges, isopods, shellfish and molluscs, with the potential for minimal recovery.
It says it is awaiting further information which may change its staff's view.
Chatham Rock Phosphate managing director Chris Castle said the EPA's report was premature and should not have been issued until his company had a chance to provide that further information. He was still confident his company had done the work to show it can mine in a sustainable way.
Mr Castle said the 175-page report was issued without any reference to his company in the middle of yesterday's trading hours. Because the company is listed on the NZX, he said, it needed to ensure its investors are continually informed.
However, the EPA says Mr Castle was aware on 10 July that the report was due to be issued on 4 August. The authority said Chatham Rock Phosphate asked for, and was granted, a two-week delay and was then told the report would be issued yesterday.
The EPA says it phoned Mr Castle half an hour before the report was released to advise him it was coming.