Shipwreck discovery may hold $3 billion in platinum, seaman says

Reuters News
Posted: Feb 02, 2012 4:53 PM
Shipwreck discovery may hold $3 billion in platinum, seaman says

By Zach Howard

(Reuters) - A Maine seafarer said he found the wreck of a World War II merchant ship off the Massachusetts coast, sunk while ferrying a load of the precious metal platinum valued today at nearly $3 billion, an unprecedented find that left some doubting the cargo.

Greg Brooks of Sub Sea Research in Gorham, Maine, said on Thursday he discovered the submerged ship in 2008 some 50 miles off the Massachusetts coast and, using a remotely run submersible vessel, identified it last summer as British freighter Port Nicholson.

The coal-fired ship, which rests in 700 feet of water, was sunk by torpedoes in a June 1942 attack by a German U-boat, Brooks said.

Brooks said the vessel had been bound for New York from Nova Scotia with 1.707 million ounces of platinum, a precious metal intended as a special wartime payment to the United States from the then Soviet Union.

That much bullion, if verified, would have a value today of $2.77 billion, at a platinum market price of $1,624 per ounce.

"If all the cargo is brought up, it will be the richest shipwreck in the world," the treasure hunter said.

The Port Nicholson, which Brooks said was owned by British shipping firm Port Line Ltd, was part of a convoy under military

escort when enemy ship U-87 fired multiple torpedoes, sinking both it and the troop ship Cherokee, and causing numerous fatalities.

Sub Sea Research says it verified the ship using an underwater camera, has seen "declassified documents verifying the cargo" and interviewed survivors and relatives of the crew.

Brooks said he also believes the ship may have been carrying around $165 million -- at today's prices -- worth of other valuable metals, due to the port of origin and the tonnage.

Of the platinum at least, he said he is "99.9 percent sure" it was on board and the wreck site shows no signs of any past salvage work.

"As time went on, it was forgotten about, because it was a secret cargo," he said.

Platinum is a precious metal used to produce catalytic converters in automobiles, and is used in other goods ranging from computers to dental work and cancer treatment.

In 2009, a federal judge gave the Sub Sea salvage rights to the ship, and Brooks said he hopes to begin recovery operations soon, once he acquires more key equipment.

But some involved with the case question the wreck's purported cargo, which -- if accurately described -- would be the biggest cache ever recovered beneath the sea.

An attorney representing the British government in the matter said he is skeptical about the cargo and disagrees over who can claim to own it today under maritime law.

"I don't have any official information yet on whether any of the things they claim were on there, were on there," said the Tampa-based attorney, Timothy Shusta. "Our initial research into it indicated the ship was carrying machinery and military stores."

But wartime ship manifests historically were unreliable, and false ones sometimes were published to put "loose lips" off of what might be on board, Shusta said.

He agreed that Sub Sea Research was named custodian of the wreck in U.S. court documents, allowing it to carry out salvage operations, but disputed that this meant it can keep what it finds.

Shusta said most likely, maritime law will state that the cargo ultimately belongs to either the ship's owner, which he says is Britain, or possibly to former USSR-member Russia, which Sub Sea Research said later made good on the lost payment from the ship.

If the payment was not made, the U.S. government may have a claim to it, he added.

But Sub Sea Research likely is entitled to an as-yet undetermined salvage award, "if they bring something up," he said.

A similar case from five years ago is still playing out in U.S. courts.

In 2007, Florida deep-sea salvager Odyssey Marine Exploration recovered an estimated $500 million in gold and silver coins from a 19th century sunken ship off the Spanish coast.

Since then, federal courts have steadily ruled in favor of Spain's claim to the treasure, although the money has not yet been paid.

(Editing By Ellen Wulfhorst and Greg McCune)