Chatham Rock Phosphate managing director Chris Castle says he is "aghast" that the Environmental Protection Authority declined to issue the would-be seabed miner with a marine consent to extract phosphate nodules from the Chatham Rise. The shares tumbled 95 percent.

Mining the phosphate is the company's sole reason for being and it has spent years researching the task, hiring consultants and bringing in partners with the expertise to do the work. Castle has argued that a local source of rock phosphate would replace billions of dollars of the fertiliser chemical imported from North Africa, providing an economic boost to New Zealand and producing enough to contemplate an export industry.

"If we can't succeed having invested $33 million over seven years, then obviously the government is not serious about economic development," Castle said in a statement to the NZX. Declining the marine consent "is a seriously negative signal for New Zealand business. It will make it even harder, if not impossible for companies to attract capital for new projects in New Zealand."

Chatham Rock is the second seabed mining proposal to be shot down by the EPA, after Trans-Tasman Resources was turned down for a consent to extract ironsands off the coast of Taranaki.

"To say we are bitterly disappointed is an understatement. We are aghast," Castle said. "The entire government process, and the EPA in particular, seems afraid to say yes to any project that involves any kind of environmental impact and that is simply not good enough if we are to provide a future for our country's young people."

He said Chatham Rock hasn't yet decided on its next step, whether to appeal, resubmit, or walk away.

Shares of Chatham Rock tumbled 95 percent to 1 cent, valuing the company at $2.1 million.