Tiny nation expects stakes in companies for free in return for rights to exploit its resources, says finance minister
Rupert Neate | The Guardian
The Cook Islands hopes to transform itself into one of the world’s richest countries within a decade by sending robots to the sea floor to collect minerals that it believes are worth tens of billions of dollars.
Mark Brown, the Cook Islands’ finance minister, said mining the minerals on the bottom of the South Pacific could increase gross domestic product a hundredfold. “It has the potential to basically transform our economy hugely significantly with just the value of the resources sitting on the sea floor,” he told the Guardian.
Brown said there is such a supply of minerals at the bottom of the ocean surrounding the Cook Islands – an archipelago of 15 small islands between New Zealand and Hawaii – that it could transform the nation into one of the richest in the world in terms of per-capita income.
The UN estimates that the per-capita income of the Cook Islands, which has a population of 14,000, is currently $12,200 (£7,945). This compares with about $50,000 in the US and $40,000 in the UK. “We still have a jump to make the move from developing nation status to a developed nation status,” Brown said. “The seabed mining industry provides that potential for us.”
But environmentalists warn mining could irreparably damage the country’s beaches and marine ecosystem.
The Cook Islands – named after Captain Cook, who visited the islands in 1773 and 1777 – were found to have a vast amount of underwater riches in the 1970s, but only recent advances in technology have made mining economically viable.
A new geological survey by Imperial College marine geochemist David Cronan estimates that the Cook Islands’ 2 million square kilometre exclusive economic zone contains 10bn tonnes of manganese nodules. The nodules, which vary from the size of a potato to that of a dining table, contain manganese, nickel, copper, cobalt and rare earth minerals used in electronics. The minerals will be mined using robots first developed for underwater warfare and espionage. The technology has already been adapted for underwater oil and gas projects, but has yet to be used for large deep-sea mining projects.
Brown said it would be about five years before mining starts. He said he is in talks with some of the world’s biggest mining companies and other nations about licensing deals. “We are here to meet the new players,” Brown said at the world’s first deep-sea mining conference in London last week. “We have had a lot interest from some companies and countries, [but] we certainly won’t be jumping into bed with the first person to come along.”
Talks are under way with the UK, China, Korea, Japan and Norway, and the first tenders are due to be granted before June 2014, he said.
Papua New Guinea has already granted a deep-sea mining licence to Canadian mining firm Nautilus Minerals to extract gold and copper from the seabed, but large-scale mining has yet to start.
The Cook Islands government acknowledges that the prospect of largely untested deep-sea mining in some of the world’s most pristine tropical waters raises serious environmental concerns. “The Cook Islands already has a very good industry in terms of tourism,” said Paul Lynch, the islands’ seabed minerals commissioner. “The good, clean, green beaches are not something we want to harm just for the sake of mineral wealth.
“We have the only legislation in the world dedicated to deep water minerals,” he added. He says the country has introduced legislation to protect the environment and turn half of the country’s waters into a marine park.
Greenpeace warns that deep-sea mining “poses a major environmental threat to our oceans, which are already suffering from a number of pressures including overfishing, pollution, and the effects of climate change”. Natalie Lowrey, co-ordinator of its deep-sea mining campaign, said: “Serious concerns have also been raised about the potential for heavy metals entering marine food chains with serious consequences for the health of coastal communities.”
Brown said the Cook Islands – which is self-governing in free association with New Zealand, and whose head of state is the Queen – would expect “stakes in [mining] companies for free” in return for their “rights to exploit our resources”.
He said the islands would maintain a significant stake in each stage of the mining process from exploration and extraction to refinement and sale.
One of the first mining companies to be involved is likely to be UK Seabed Resources, a British subsidiary of US defence and engineering giant Lockheed Martin. Lockheed first collected nodules from the Cook Islands’ seabeds in the 1970s. UK Seabed Resources has already been awarded a licence to explore 58,000 square kilometres of Pacific seabed outside of territorial waters. The licence, awarded in March, was granted by the International Seabed Authority, a UN-created body that controls oceans outside of national exclusive economic zones.
David Cameron, who supported UK Seabed Resources’ bid, said the seabed mining industry could be the worth £40bn to the UK economy over the next 30 years. “We are involved in a global race where we have to compete with the fast-growing economies of the south and east of the world,” the prime minister said. “We want to make sure we get every opportunity out of this.”
Brown said the potential income for the Cook Islands could be so vast that a sovereign wealth fund would be set up to manage the cash for future generations and provide a safety net if the islands are swamped by rising sea levels as a result of climate change.
He is about to embark on a world tour to learn about their sovereign wealth funds. “It’s important to learn lessons of the past from other counties that have come into wealth,” he said. “To learn lessons from those that have squandered theirs. This is not a renewable resource, you exploit it once, you have the revenue from it once,” he said.
If mining doesn’t work for the Cook Islands, there’s always squid.
The country is considering creating a new industry centred on fishing for giant squid, following the successful creation of a squid fishing industry on the Japanese island of Okinawa.
“We thought to ourselves, if we can find it here maybe we could do the same, something for our own local market,” said William Sokimi, the fisheries development officer of the Secretariat of the Pacific Community, which represents 22 Pacific island countries.
A recent small-scale fishing trial caught four diamondback squids and a neon flying squid, the biggest one weighing in at 17kg.
“So far, it is looking very promising … we have now established that giant squid can be caught in the Cook Islands,” Sokimi told Radio Australia. He admitted, however, that work needs to be done to convince the locals to eat squid. “We’ve given out some recipe booklets with about 53 recipes,” he said.