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Would-be diatomite miner Plaman Resources has been hit with a three-fold criticism by the Overseas Investment Office.
The OIO questioned the project's financial viability, whether it was even allowed to export the fossil-laden material, and raised doubts as to whether Plaman could secure resource consents to operate.
Plaman Resources, and subsidiary Plaman Services, were both placed in voluntary receivership and liquidation by its directors a fortnight ago, prompting the OIO to put its Middlemarch farmland purchase application ''on hold''.
The OIO was, in April, already scrutinising the project's financial viability.
Plaman owns a non-producing diatomite mine on Moonlight Rd, near Middlemarch, and in February last year applied to the OIO to buy the adjoining 432ha Foulden Hill farm.
Four days after the liquidation on June 13, the OIO queried Plaman on whether the Protected Objects Act 1975 ''may prevent the export of material from Foulden Maar given the concentration of fossils at the site''.
''The OIO consulted several organisations and individuals about the scientific, heritage, ecological and investment implications of the application,'' the agency said in a statement yesterday.
The maar is a 23 million-year-old volcanic crater lake, more recently filled in by the layered diatomite containing likely tens of thousands of fossils, ranging from fish and insects to seeds, leaves and pollen.
The Protected Objects Act covers objects from archaeological excavations, prehistory, science, rare collections, specimens of fauna, flora, minerals and objects of palaeontological [fossil] interest.
The OIO said yesterday ''significant new information'' on the fossilised site, gleaned from its consultations, included the high value New Zealanders placed on Foulden Maar, noting its unique features and scientific value.
''The new information raised concerns that, when considering the factors collectively, Plaman's proposed benefits may not be substantial and identifiable in the context of this investment and the unique values of the land,'' the OIO said.
The agency said there was ''doubt on the ability for Plaman to obtain the resource consents it needs to mine on a large scale'', given correspondence from scientific submissions and also from Dunedin Mayor Dave Cull.
Because of the ''complexities'' of Plaman's OIO application, it had to date taken 16 months, as the agency sought answers to myriad issues, plus additional information from Plaman.
The OIO said Plaman's financial position was relevant to its application assessment, including the likelihood of benefits occurring and whether the investor test was met.
''The OIO was already closely examining Plaman's financial viability before Plaman Resources Ltd was placed in receivership and liquidation,'' it said.
The OIO was awaiting further information from the receivers and liquidators and would continue to accept third party submissions, which might form part of the assessment.
-The Malaysian-controlled Australian company Plaman owes investment bank Goldman Sachs $33.6million for a ''bridging loan'', but has at least $17.8million in a trust account. The mine was purchased in 2015 for $A5million ($NZ5.35million).