Frequently Asked Questions

Table of Contents[Show]

GENERAL

1. What are seabed minerals?

These are minerals found on the ocean seabed. The three major deep sea mineral deposits that have generated commercial interests include Seafloor Massive Sulphides (SMS), Polymetallic Nodules/Manganese Nodules and Cobalt-rich Crusts (CRC).  In the Cook Islands the minerals found within its national jurisdiction are polymetallic or manganese nodules. They are spherical to potato-shaped rocks, [insert example of size], and are generally found on the surface

partially buried in the sediments and cover vast plains in areas of the deep seabed at depths of 3,000-6,000 metres. The Cook Islands nodules contain a number of elements, including the target metal cobalt (an important component in rechargeable batteries and other industrial, high-tech, medical and military applications), as well as by-product metals also sought by extractive industries such as: nickel, copper, manganese, niobium, zirconium and rare earth elements.

2. How much of these resources are there at the bottom of the sea?

A recent estimate for nodules within the Cook Islands' EEZ is that there are 10 billion tonnes (Cronan

2013). This is generally considered the second largest deposits of metal-rich nodules. The area of the seabed where the greatest concentrations of metal-rich nodules are found underneath international waters (not belonging to any one country), to the West of Hawaii and the East of Mexico. This area of seabed is called the Clarion Clipperton Zone (CCZ) and has an estimated resource of 27 billion tonnes of nodules. These nodules are different in composition to the Cook Islands‟ nodules – with lower cobalt but higher nickel and copper content.

3. What is the "Seabed of the Cook Islands?

The seabed of the Cook Islands means the seabed, ocean floor and subsoil of the internal waters, territorial sea, the exclusive economic zone (EEZ) and the continental shelf of the Cook Islands. These areas fall within the Cook Islands‟ national jurisdiction as defined by the United Nations Convention on the Law of the Sea (UNCLOS), and gives the Cook Islands the right to explore and exploit such seabed resources.  UNCLOS outlines the areas of national jurisdiction as a twelve-nautical-mile territorial sea; an exclusive economic zone of up to 200 nautical miles (which for the Cook Islands means a total 1,830,999 km2 marine area) and a continental shelf which starts at 200 nautical miles and may extend beyond that depending on the outer limit  of the continental shelf.

In addition the Cook Islands have a claim before the Commission on the Limits of the Contented Shelf concerning the outer limit of the extended continental shelf in the region of the Manihiki Plateaux in accordance with Article 786 of the Convention for an area approximately 413,000 km beyond the 200 M from the Cook Islands‟ territorial sea baseline

4. Why mine the deep-sea?

The world‟s demand for minerals continues to increase and the terrestrial resources are being stretched in terms of decreasing grade. The social and environmental impacts of on land mining are increasingly controversial, increasing interest in offshore projects, where homes and communities will not be disrupted. There are also economic drivers: deep seabed resources are believed to contain a higher concentration, and a higher number of different types, of valuable minerals in one deposit than their terrestrial alternatives.

  Seabed mining has a smaller footprint, than land mining.  It does not impact waterways, has reduced carbon emission as a result of limited heavy machinery with less overburden, meaning a smaller volume of non-valuable rock is removed and disposed of before the resource is exposed.  Additionally, seabed mining does not require additional roads, surface ore-transport systems, buildings or other permanent infrastructure that could be disruptive to indigenous or native populations.

5. Is seabed minerals resource renewable like fish?

No, seabed minerals are not a renewable resource. Manganese nodules have developed in the Cook Islands seabed over millions of years. Once they are extracted it is likely to be millions of years before any nodules form. This is therefore a once-in-forever opportunity to build wealth for the Cook Islands at present and for the future.  If we are to make that wealth last beyond a single generation, the way we manage these resources will be essential. This will include long-term safeguarded investment of any revenue raised from nodule mining, to generate interest that will support the country‟s income for the foreseeable future.

6. How are seabed minerals mined?  

It is important to note that seabed mining is not occurring currently. Nowhere in the world have any deep sea minerals yet been commercially extracted. Nowhere in the world has a licence been given to any company to mine manganese nodules. It is early days of a new and emerging industry. Currently companies and State institutions who are interested in seabed minerals are only at the exploration and technology development stage. Exploration involves marine scientific research and sampling to enable better understanding of the minerals and their associated environment. It generally requires sophisticated, multipurpose research vessels using advanced technologies such as deep-sea mapping equipment, remotely operated vehicles, photographic and video systems, and sampling technology. The Cook Islands is just now at the stage of commencing a process that will lead to the award of exploration licences. Mining is only likely to take place in any location once comprehensive exploration has been carried out that indicates a viable deposit, and only once the suitable technology has been fully developed for extracting those minerals (and processing them to separate out the valuable metals). This time is several years away.

For this reason it is not possible to say with any certainty now, what a mining operation for manganese nodules will look like in the future. However current thinking is that it is likely to involve:

  1. the use of remotely operated vehicles (like remote-controlled robots) which operate along the seafloor, scooping up the nodules;
  2. the transport of those nodules via a pipe or a continuous bucket system from the seafloor to a vessel or platform on the sea surface;
  3. the separation of the nodules from water (and return of the water to the sea); the transfer of the dry nodules from the vessel, via a barge, to an onshore processing centre – most likely in an industrial hub (such as China), where the nodules can be processed in order for the metals to be extracted for sale.

7. Are we sure that there are valuable seabed minerals in the Cook Islands’ EEZ?

Numerous research based surveys undertaken since mid-1970 have provided a resource data base that provides marine scientists to us to have a reasonable indication of the location, size and content of the seabed minerals resources within the EEZ (table xxxx below). Much more resource definition and environmental studies of the ecology of the seabed where the manganese nodules are located needs to be carried out before the feasibility of mining the nodules can be determined – and this will be done under exploration licences granted to mining companies that can demonstrate that they have the necessary technical, financial resources and a track record of good exploration and mining practices.

Research Vessel & Year of Survey Survey Area Surveyed Commodity RV Tangaroa (1974) Rarotonga, Cook Islands Manganese Nodules MV Ravakai (1976) Area between Rarotonga and Penrhyn Manganese Nodules, Metalliferous Sediment RV Acheron (1977) Southern Group, Cook Islands Precious Coral, Manganese Nodules   RV Coriolis (1977) Selected areas within the EEZ of the Cook Islands RV Machias (1978) Penrhyn  and  Samoa  Basins,  Nearshore waters of the Cook Islands   Manganese Nodules

Manganese Nodules and Precious Coral   RV Sonne (1978) West of Rarotonga and Aitutaki Passage Manganese Nodules RV Machias (1980) Northern Cook Islands Manganese  

Nodules   RV Machias (1980) East  of  Penrhyn  Island,  Penrhyn  Basin, Penrhyn, Manihiki, Nassau Islands   Manganese  Nodules,  Precious Coral, Phosphate   RV Sonne (1980)                    Aitutaki Passage                                                   Manganese Nodules RV Hakurei Maru (1980)       South Penrhyn Basin                                            Manganese Nodules MV Ravakai (1983)                Slopes of Rakahaga and Manihiki Atoll               Precious Coral RV Hakurei Maru (1983)       South Penrhyn Basin                                            Manganese Nodules  

RV Hakurei Maru 2 (1985)   Western Penhryn Basin, eastern margin of the M a n i h i k i   plateau  and  the  North of Penrhyn Island.   Manganese Nodules   HMNZS Tui (1986) Manihiki Plateau and adjacent Southwest sea areas   Cobalt-rich   Crust,   Manganese Nodules   RV Hakurei Maru 2 (1986)   Western  edge  of  the  southern  Penhryn Basin (to the east of the Manihiki plateau)   Manganese Nodules   RV Moana Wave (1987) Cook  Islands:  Suwarrow  trough,  eastern Manihiki Plateau, Rakahaga- Manihiki island area   Cobalt-rich Crust and Metalliferous sediments   RV  Thomas  Washington (1987)   Northern Cook Islands and adjacent High Seas   Manganese Nodules, Cobalt-rich Crust, Deep Sea Sediment   RV Sonne (1990) North-east edge of Manihiki Plateau Complex of Volcanic Cones and mineral resources   RV Hakurei Maru 2 (1990)   Southern Cook Islands Manganese Nodules   RV Hakurei Maru 2 (2000)   Central Cook Islands (i.e. Southern Penrhyn Basin)   Manganese Nodules 

RV Sonne (2007) Manihiki Plateau Petrological and  geological plateau  development, Manganese Nodules

Table xx: Summary of previous offshore research and minerals exploration in the Cook Islands.

The most significant surveys within the Cook Islands EEZ took place between 1985 and 2005, under the

SPC-SOPAC working with the Government of Japan. undertook wide ranging surveys in the South

Pacific using the Hakurei Maru No.2 research vessel and this research confirmed the very high abundance of nodules over a large area and the predominance of cobalt in the nodules. Further compilations of this data in 1990 by SPC-SOPAC and the East West Centre for the Pacific Islands Development Program, concluded that 652,000 km2 of the Cook Islands‟ EEZ contained abundant manganese nodules estimated

to comprise a resource of at least 7,474,000,000 tonnes of nodules which in turn contain 32, 541,000 tonnes of cobalt, 24,422,000 tonnes of nickel and 14,057,000 tonnes of copper.

A recent estimate of the manganese nodules resource by conducted at the Cook Island Government‟s request by international expert Professor David Cronan of Imperial University in London (Cronan 2013) determined that the Cook Islands‟ EEZ contains 10.3 billion tonnes of nodules, which equates to metal content of some 43,000,000 tonnes of cobalt, 36,000,000 tonnes of nickel, 18,000,000 tonnes of copper, 164,000,000 tonnes of titanium and substantial quantities of rare earth elements.  Refer to table below for

comparison of in-ground resource estimate.

  Total Nodule   Cobalt

(Co)   Manganese

(Mn)   Nickel

(Ni)   Copper

(Cu)   Titanium

(Ti)  

  Cronan, 2013 million tonnes (in-ground resource)   10,266  >5 kg/m2   43 1,891 36 18 164  

  Value of metal in ground US$ billion Cronan)   1,747 1,118 - 504 125 -  

  Clark et al 1995 million tonnes (in-ground resource)   7,474 33 - 24 14 -  Value of metal in ground US$ billion (Clark et al 1995)   1,134 967 - 136 31 -  10  

 Table xxx  Comparison of Nodule and Metal Tonnages in the Cook Islands‟ EEZ (in millions of metric tons)

From SPC-SOPAC brochure:

“Nodules with metal grade exceeding 2% (Ni+Cu+Co) occur in the South Penrhyn Basin with abundance of more than 30kg/m2 in some parts hence the South Penrhyn Basin is the most promising within the Cook Island sea area. The Japan- SPC-SOPAC surveys confirmed that zones of high abundance of manganese nodules occur in the western margins of the South Penrhyn Basin. It has been determined that the Cobalt grade of manganese nodules in the Cook Islands is higher than CCZ, but the Nickel and Copper contents are lower.”

8. What are seabed minerals used for?

Modern life is increasingly reliant upon metals. Many of the metals contained in seabed deposits are considered „technology metals‟ and are increasingly required by high technology industries including electronics and clean technologies, such as hybrid cars and wind turbines. As opposed to the generally well-studied deposits on the land, many of the resources at the bottom of the sea are yet to be discovered. Of the main metals known to occur in Cook Islands nodules:

  • Cobalt is used for  making super alloys – jet engines, alloys for prosthetics, batteries, catalysts, pigments and  colouring, radioscopies
    Copper is used in electrical wires (60%), roofing and plumbing (20%) and industrial machinery (15%). Copper is used as a pure metal, but when a higher hardness is required it is combined with other elements to make alloy (5% of total use) such as brass and bronze. A small part of copper supply is used in production of compounds for nutritional supplements and fungicides in agriculture. Machining of copper is possible, although it is usually necessary to use alloy for intricate parts to get good machinability characteristics.
  • Nickel is used in  46% for making nickel steels (stainless steel; 34% in nonferrous alloys and super alloys; 14% electroplating, and 6% into other uses such as magnets and various uses alloyed with other metals, super conductors,  super magnets, corrosion inhibiter, high energy density anode for lithium ion batteries. 11  
  • Vanadium is used for alloys with iron for making high strength steel, high speed tools, and surgical instruments. Approximately 85% of vanadium produced is used as ferrovanadium or as a steel additive
  • Titanium is used for making stainless steel, pigments, additives, coatings, aerospace and marine metals resistant to corrosion industrial, jewellery, architectural , medical, nuclear waste storage
  • Manganese is essential to iron and steel production, - high tensile steel, aluminium alloys, unleaded gasoline, dry cell batteries
  • Rare earth elements –are used in a range of high technology such as TV screens, mobile phones, super conductors, magnets, lasers, nuclear batteries and a host of new evolving technologies.

Refer to table below:

Symbol Name Selected applications Light aluminium-scandium alloys for aerospace components, additive in  

21 Sc Scandium
39 Y Yttrium
57 La Lanthanum
58 Ce Cerium   metal-halide lamps and mercury-vapour lamps,[4] radioactive tracing agent in oil refineries Yttrium aluminium garnet (YAG) laser, yttrium vanadate (YVO4) as host for europium in TV red phosphor, YBCO high-temperature superconductors, Yttria-stabilized zirconia (YSZ), yttrium iron garnet (YIG) microwave filters,[4] energy-efficient light bulbs,[5] spark plugs, gas mantles, additive to steel High refractive index and alkali-resistant glass, flint, hydrogen storage, battery-electrodes, camera lenses, fluid catalytic cracking catalyst for oil refineries Chemical oxidizing agent, polishing powder, yellow colours in glass and ceramics, catalyst for self-cleaning ovens, fluid catalytic cracking catalyst for oil refineries, ferrocerium flints for lighters Rare-earth magnets, lasers, core material for carbon arc lighting, colorant in   59 Pr Praseodymium glasses and enamels, additive in didymium glass used in welding goggles,[4] ferrocerium fire steel (flint) products.
60 Nd Neodymium Rare-earth magnets, lasers, violet colours in glass and ceramics, didymium glass, ceramic capacitors
61 Pm Promethium Nuclear batteries
62 Sm Samarium Rare-earth magnets, lasers, neutron capture, masers
63 Eu Europium Red and blue phosphors, lasers, mercury-vapour lamps, fluorescent lamps, NMR relaxation agent Rare-earth magnets, high refractive index glass or garnets, lasers, X-ray tubes,  
64 Gd Gadolinium   computer memories, neutron capture, MRI contrast agent, NMR relaxation agent, magnetostrictive alloys such as Galfenol, steel additive  
65 Tb Terbium Green phosphors, lasers, fluorescent lamps, magnetostrictive alloys such as 12 Symbol Name Selected applications  Terfenol-D
66 Dy Dysprosium Rare-earth magnets, lasers, magnetostrictive alloys such as Terfenol-D
67  Ho  Holmium Lasers, wavelength calibration standards for optical spectrophotometers, magnets
68 Er Erbium Infrared lasers, vanadium steel, fiber-optic technology
69 Tm Thulium Portable X-ray machines, metal-halide lamps, lasers
70  Yb  Ytterbium Infrared lasers, chemical reducing agent, decoy flares, stainless steel, stress gauges, nuclear medicine
71  Lu  Lutetium Positron emission tomography - PET scan detectors, high refractive index glass, lutetium tantalate hosts for phosphors

Table XXXX Rare Earth Elements and Selected Uses

Click here for another useful reference

9.  What rights do the Cook Islands have in developing our seabed resources?

The Cook Islands‟ rights over the resources in their waters, including the minerals of their seabed, are derived from the 1982 UN Convention on the Law of the Sea, which the Cook Islands ratified in 1995. The rights given vary depending on the marine area (maritime zone) concerned. Within the Territorial Sea (up to 12 miles from the shore), the Cook Islands exercises absolute sovereignty over the use of its natural resources. Within the EEZ and its Continental Shelf the Cook Islands has an exclusive sovereign right for the purpose of exploring and exploiting its natural resources. This means that the Cook Islands is free to decide whether to permit development of its seabed minerals, who can do it, when, and according to what rules. It also means that no other State or other person may undertake exploration or exploitation within the Cook Islands waters without the express consent of the Cook Islands.

10. Who owns our minerals?

The Cook Islands‟ Government owns all rights to the seabed, and its mineral resources are owned by the Crown to be managed on behalf of the people of the Cook Islands. The regulation and management of the seabed minerals are governed by the provisions of the Seabed Minerals Act 2009 which provides that rights to ownership of the seabed minerals of the Cook Islands are vested in the Crown on behalf of the people of the Cook Islands. This was included in the Act to provide a clear legal basis for the management of seabed minerals activity by the Government of the Cook Islands in accordance with the provisions of the proposed Act.

MANAGING THE SEABED RESOURCES

11. Who will be responsible for managing the seabed minerals?

The rules for the management of Cook Islands seabed minerals are provided for in the Seabed Minerals Act 2009. The Act provides that the administration of this Act is the responsibility of the Seabed Minerals Authority.  The Seabed Minerals Authority is a government agency established by the Act. The Authority has the power to receive applications from anyone interested in the Cook Islands‟ nodules, and to make a recommendation to the responsible Minister (Minister of Minerals and Natural Resources) on the grant or decline of a permit or licence for activities like prospecting, exploration or mining. The Act also provides for the appointment of a Seabed Minerals Commissioner who is responsible for the operation of the Authority. Seabed Minerals Officers appointed by the Commissioner will exercise the day to-day administrative functions and powers of the Authority, including powers of monitoring any seabed mineral activities carried out in Cook Islands waters, and ensuring compliance by those contractors with the relevant seabed mineral laws of the Cook Islands, conferred by the Act.

12. Who else is available to support the Seabed Minerals Authority?

The Act also provides for the establishment of the Cook Islands‟ Seabed Minerals Advisory Board who will support the Seabed Minerals Authority and provide a formal avenue for consultation between the Authority and the community concerning the management of their seabed minerals.

It is anticipated, when seabed mineral activities start in the Cook Islands that the Seabed Minerals Authority will also work closely with the National Environment Service, on the monitoring of those activities to check they meet stringent standards for the protection of the environment. The Authority will also work in conjunction with the Ministry of Finance and Economic Management in terms of collecting fees, royalties and other income from contractors.

What is the role of the Minister of Minerals and Natural Resources?

The Minister is appointed and charged by the Prime Minister with responsibility for the administration of Seabed Minerals Act. The Minister appoints the Seabed Advisory Board, supervises the Seabed Minerals Commissioner (who runs the Authority) and is ultimately responsible for ensuring all the institutional arrangements and objectives of the Seabed Minerals Act are realised.

13. What is the Seabed Advisory Board?

The Seabed Minerals Advisory Board is established under the Seabed Minerals Act 2009, appointed by the responsible Minister. The Board‟s role as prescribed in the Act is specifically an Advisory Board (as opposed to a board with governance functions) for the purpose and functions set out in the Act and amongst  other  roles  the  Board  shall  operate  as  the  official  avenue  for  consultation  between  the Government and the community on matters concerning the regulation and management of the seabed minerals of the Cook Islands. The functions of the Board are:

  • provide recommendations to the Authority in connection with the management of the seabed mineral resources of the Cook Islands;
  • provide  recommendations  to  the  Authority  on  the  grant, renewal, suspension and cancellation of titles and on the negotiation and conclusion of Seabed Mineral Agreements;
  • Perform such   other   functions   as   are   assigned   to   it   in accordance with the provisions of this Act or the regulations.

In undertaking these tasks the Board will provide a copy of every recommendation made to the Authority to the responsible Minister. To assist the Board in its role of communicating with the public and meeting its functions, SPC-SOPAC have agreed to provide an independent advisory services for the Board when asked for advice.

14. What makes a good Seabed Advisory Board member?

The Seabed Minerals Advisory Board Members have been appointed on the basis of a good mix of representatives from various sectors in the community, the southern and northern groups, commercial, religious, traditional leaders from the Ui Ariki and Kotou Nui, technical experts and notable community leaders.  Each member of the Board will be expected to bring their respective skills and knowledge to assisting the Authority with feedback from the public and input into decision making in the seabed minerals sector from a Cook Island perspective.  

15. What is the role of Cabinet?

The Seabed Minerals Act provides that the Minister is responsible for the administration of the Act and there are a number of provisions that requires the Minister to seek Cabinet approval including the appointment and removal of the Commissioner.  On major decisions the responsible Minister would likely seek Cabinet endorsement.

16. What is the role of other Government officials?

Seabed minerals and the consequential benefits or otherwise of these resources are the responsibility of the whole of Government.  Various responsibilities are outlined in the Seabed Minerals Act such as the National Environment Service (NES) that has responsibility for the assessment of the environmental implications of any proposals and the granting or decline of project permit (environmental consent).

17. Are there other bodies in the world, like the Cook Islands’ Seabed Minerals Authority?

As this is an emerging industry – with no mining having occurred anywhere in the world yet – and as not many countries have seabed mineral potential data as positive as the Cook Islands, there are not many similar regulatory authorities in the world. Some developed States have national bodies to carry out exploration work via State research institutes (e.g. China, Japan, and Korea).

The  best comparator for  the  Cook Islands Seabed Minerals Authority currently is  the  International Seabed Authority (ISA): an intergovernmental body based in Kingston, Jamaica, that was established under UNCLOS to organize and control all mineral-related activities in the international seabed area beyond the limits of national jurisdiction (known as „the Area‟), an area underlying most of the world‟s oceans (anywhere that does not fall within a country‟s territory: for example the seabed a few hundred miles to the North of the Cook Islands‟ Northern Islands).  Currently there are 164 members of the ISA (163 States and the European Union).

The ISA was established under the UNCLOS and came into force in 1994 as a fully operational international organization. The ISA has a 35-member staff led by Secretary-General Nii Allotey Odunton of Ghana. While the ISA is a large UN-style intergovernmental organisation, and so unlike the Cook Islands Seabed Minerals Authority in that respect, it has been working for twenty years on developing standards, rules, and guidance for seabed mineral activities within the Area, including some nodules- specific regulations. For that reason the ISA is a useful source of information for the Cook Islands as we establish our own national regime. ISA also provides opportunities and assistance with relevant training on developing nationals, and holds conferences of experts, leading to quality technical reports and regulatory documents refer to www.isa.org.jm/)... The ISA can also be seen as a competitor to Cook Islands in the sense that contractors with limited investment may be choosing between the ISA‟s nodule resources, and that owned by the Cook Islands. 

18. Who is supporting the Cook Islands in the Pacific?

The European Union Funded Pacific Deep Sea Minerals (DSM) Project managed by SPC-SOPAC has been specifically designed to operate as an independent adviser for Pacific Island Countries in relation to the management of seabed minerals. The role of the DSM Project is to provide countries with the relevant information and advice they need to make informed decisions whether they want allow deep sea mining within their national jurisdictions. If countries decide to engage in deep sea mining activities, the role of the DSM Project is to provide countries with the technical assistance needed to assess the risks and meet their legal responsibilities under international law. For example, the DSM Project is also designed to ensure that countries have in place an effective environmental management and monitoring regime for any offshore exploration and mining. According to international law any Pacific Island contemplating deep sea mining must also commit to protecting the ocean environment, minimizing pollution, and to preserving any rare or fragile ecosystems and ocean habitats. If countries do decide to give out exploration and mining licences for their deep sea minerals resources it is critical that they provide terms that protect the country from environmental damage, protect the people from unwanted social impacts, or any negative effect on their livelihoods, and ensure a proper financial return that will be collected and managed responsibly.

The Commonwealth Secretariat and ISA have also provided invaluable on- going advice and financial assistance to the Cook Islands Seabed Minerals sector.  

19. When will mining of seabed minerals start in the Cook Islands?

Best estimate is by the end of this decade or early next decade, say 2021,   when technology will be available to extract and lift the nodules to the surface in an environmentally sustainable way.

ENVIRONMENTAL MANAGEMENT

20. Has the Seabed Minerals Authority established the necessary rules for seabed mineral mining?

The Seabed Minerals Act 2009 sets out the management policy and framework for the administration of the seabed minerals asset. It creates a regime whereby a company can apply to the Seabed Minerals Authority for a licence for exploration (and later, for mining). The Seabed Minerals Authority will consider that application, in consultation with others. Where it is considered that the company is a creditable agency with appropriate track record, and financial and technical capability, and where the proposed site and exploration activities are considered acceptable and in line with Cook Islands policy and standards, a licence may be issued. Any licence granted for exploration will have conditions that will require the licence-holder to adhere to strict performance and reporting standards, as well as to carry out a comprehensive evaluation of the ecology of the seabed within the exploration licence area, and to find the least harmful methods for conducting its exploration activities. In addition, the Seabed Minerals Act requires the National Environmental Service (NES) to grant a project permit consent before any seabed activity is undertaken. The NES may require an environmental assessment and impact statement relevant to the proposed. If NES is satisfied that the proposed activity will have minimal or manageable impacts a project permit will be granted. During exploration the company will undertake detailed research of the ecology  of  the  seabed  and  seawater  column  and  obtain  information  necessary  to  establish  an environmental baseline, and will report this to Cook Islands Government. These reports will be public documents and the public will have an opportunity to make submissions to NES and the Seabed Minerals Authority on the proposed activity.

21. Will there be discussions and consultations with the Cook Islands communities?

The Cook Islands community will be kept informed on all activities of seabed mining activities by the Authority and the Advisory Board. The Seabed Minerals Act requires the responsible Minister and/or the applicant to ensure the public is aware of proposed tenders or applications for exploration and mining licences by advertising that a tender is to take place or an application has been made to the Authority. Prior to any decisions being made on environmental issues by Government agencies responsible for assessing an application the public will be provided with documentation and time to assimilate the material and make submissions and present their views on the proposal. At any time the public is encouraged to approach the Authority and/or Advisory Board members on any seabed mineral issues that they may wish to have information on.

22. What is the environment associated with the Cook Islands’ seabed minerals?

The Cook Islands‟ manganese nodules occur on the „abyssal plains‟ of the ocean at depths of up to 6000m below sea-level. These environments have not benefitted from a great deal of scientific study yet, but there are indications about these habitats. The water temperature is low, there is very slow current, and the food sources (the amount of organic material that floats down to those depths from above) are limited. The biodiversity found in these sites is likely to vary from site to site, but the animals are most likely to be broadly similar across the abyssal plains – whether there are nodules present. Potentially some larger animals (easily visible to the human eye) may be found, such as sea stars, shrimp, sponges and sea cucumbers, but largely the species diversity will be made up of tinier creatures living in the sediment, such as nematode worms and single-cell creatures known as foraminifera‟s – as well as micro biota (mainly bacteria).

23. Can we be certain that there will not be bad impacts from seabed mineral mining?

Any activity may have an environmental impact, both good and/or bad. However by understanding what the impacts of an activity are, it can be minimised and mitigated to an acceptable level. Exploration activities will include lower-impact activities, such as acoustic sensing, photography, water-sampling etc. These activities will have no impact. Mining will have more significant impacts, as it will involve the removal and destruction of areas of the habitats and associated fauna. Protecting the marine environment is of paramount importance, and so the Cook Islands Government will base its decisions about seabed mineral development in the context of its best endeavours to maintain the overall biodiversity and health of the marine ecosystem, preventing or reducing adverse effects of mining where possible.

A  key underlying  principle  will  be  adoption  of  the  precautionary approach. The  DSM  Project  has concisely spelt out the concept of the Precautionary Principle in the following paragraphs (paraphrased from  “Information  Brochure  13  Application  of  the  Precautionary  Principle”  SPC-SOPAC  2012. The precautionary approach (or „precautionary principle‟) has been defined in slightly differing terms in a  number  of  international  law  instruments.  A  common  definition,  used  in  the  International  Seabed Authority Mining Code – and so particularly pertinent, is the 1992 Rio Declaration on Environment and Development, Principle 15: “In order to protect the environment, the precautionary principle shall be widely applied by States according to their capabilities, where there are threats of serious or irreversible damage; lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.”

24. What are the potential impacts of mining on the marine environment?

The potential impacts on the marine environment are removal of organisms and their habitats along with the mineral deposits and the smothering of adjacent communities by any sediment plume that may be created. It will required that before any impact-making activities are permitted to proceed, studies identifying  the  type  and  degree  of  impacts  are  carried  out,  and  sufficient  mitigation  measures  or alterations to the work plan are put in place, such that those impacts and risks are deemed to be acceptable by Cook Islands Government, in consultation with its people. An important aspect of any licensed seabed mineral activity will also be to monitor on-going impacts, examining routinely collected data against baseline data gathered under controlled conditions, covering for example air or water quality, sediment characteristics, biodiversity at different depths, ecosystem structure and function, and any effect on the operation  of  other  marine  uses,  such  as  fishing.  In  this  way  the  impacts  of  the  activities  on  the environment can be monitored and action can be taken if the impacts appear likely to exceed what had been anticipated. As seabed exploration and mining will include the use of sea-going vessels, there will also be impacts and risks associated with those vessels (the same as with other vessels used for fisheries, transport or tourism) e.g. waste disposal, risk of collision, or disruption from natural hazards). These latter aspects will be covered by the Cook Islands‟ existing shipping and pollution laws and agreements. Throughout the Pacific region civil society organisations are asking tough questions about what steps their Governments are taking to ensure these important deep sea mineral resources are managed in the most environmentally and socially responsible way.  The locally based environmental group, Te Ipukarea Society is following seabed minerals development closely and has made a number of submissions to Government and interventions at International Fora regarding seabed mining.  The Australia-based Deep Sea Mining Campaign, which focuses largely on developments in Papua New Guinea (which relate to seafloor massive sulphide deposits in the Bismarck Sea: a different deposit type from the Cook Islands‟ nodules).   Because there is still a great deal to learn about how the ocean environment may be affected by deep sea mineral exploration and mining activities the Cook Islands will prioritise the adoption of the „precautionary approach‟ to the management of our deep sea minerals resources. Click here for more information.

25.  What is the Seabed Minerals Authority and the National Environmental Services doing to protect the marine environment?

The Cook Islands has an international law obligation to protect and preserve the marine environment. Government takes this very seriously, and will only permit seabed mineral projects that will complement efforts to conserve the ocean‟s biodiversity. The Seabed Minerals Authority takes environmental management seriously and is working with Government Agencies as well as the NES to upgrade and support and ensure international best practice is followed to ensure the potential impact of seabed mining and how to assess and mitigate these effects is managed appropriately. Prior to the grant of any of any exploration licences, necessary for determining if any future mining operations are feasible, the Authority will be developing relevant regulations that will set out the rules and obligations under which exploration activities can proceed. This will involve drafting environmental regulations and guidelines utilising the ISA guidelines and recommendations and initiating the capacity building across the relevant Cook Islands agencies for environmental assessment, decision making, and on-going management.

 In accordance with the Seabed Minerals Act, the NES will be the agency responsible for assessing the environmental impacts of seabed mining operations including prospecting and a project permit is required from the NES before any seabed mining operations can commence. Conditions of any permit granted will be monitored by the NES and the Authority. The exact details of this assessment process and on-going monitoring are being determined.

26. Who pays for the environmental damage caused by seabed mineral mining?

A licence to conduct seabed mineral activities will only be given where Cook Islands Government is confident that the licensee is a responsible operator with a good track record for environmental management,  proven  risk  management  principles  and  practices,  good  equipment  and  operational practices. The licence will set acceptable parameters for the activities and their impacts and will also need to operate within the environmental framework of the Act and associated regulations. Close monitoring, and self-reporting from the developer, will be part of any licensee.

Where a licence-holding company stays within the terms of the licence, and the monitoring of the licence shows that the impacts are no greater than had been anticipated in the application procedure, there will be no need for any kind of compensation or damages payments (apart from the regular payments the licence- holder will be making to the Cook Islands by ways of fees and royalties).

It is only if a licence-holder acts outside of the express rules that additional action may be taken. This could include prosecutions or fines, and orders to clean-up or compensate for damages, or to take or stop taking certain action. Fines for breach of licence conditions are in the Cook Islands‟ existing legislation and may be supplemented by regulations to be made under the Seabed Minerals Act or the Environments Act. Other instruments such as monetary bonds or insurance bonds can be requested as per the Seabed Minerals legislation (check) so there is a fund to recover the cost for any unforeseen outcome

The  biggest  risks  are  considered  to  be  operations  being  caught  in  the  path  of  a  major  cyclone  or catastrophic systems failure such as equipment breaking down and spills occurring. These risks are largely the same for other vessels such as fisheries or cruise ships – where there is a risk, albeit unlikely, of an accident. For nodule-mining it is likely that no chemicals will be used, and any equipment breakage or „spill‟ that may be caused, for example by an unanticipated event like a natural disaster, mechanical failure, or collision, would only be seabed muds and nodules and seawater, returning into the ocean. While this may include localised disruption through the water column, it is likely to be minimal.

  In the event of a catastrophic event the Seabed Minerals Act requires any licensee‟s and the Cook Islands Government to have in place plans to deal with such an unlikely event and, insurance or bond funds will be available to fund any clean up in association with the company. Quick reaction times will be in place to minimise such an outcome.

Selection of companies to undertake exploration and possible mining will be a key part of allocation of acreage. Only companies who will employ the best available technology and whose work plan reflects best environmental practice will be part of the process. Any seabed mineral vessels, like all other vessels in the Cook Islands‟ EEZ, will be required to meet international standards, as set out in international shipping laws and Cook Islands‟ marine laws.

27. Can environmental harm from seabed mining be reduced or reversed?

Any seabed mining operations permitted in the Cook Islands will be subject to strict conditions and monitoring, and must follow practices which go some way towards mitigating or remedying the environmental impacts of mining. However, mining will always have some impact on the environment that can never be entirely remedied, as it will necessitate the removal of nodules and sediment, which are currently the habitat for some animals. The ecological systems at the depth where Cook Islands seabed mineral resources are found will recover but very slowly. Environmental management measures can be taken to facilitate this, such as a system of set-aside control sites containing representative conditions, and marine management areas that include sites set aside for conservation, and that choose carefully only select sites to open for mining. An in-depth understanding of the system‟s recovery will be a parameter that will be evaluated during exploration and during any mining should it follow. Mining operations will be designed around this parameter. For instance areas can be left to act as centres for recolonising of mined areas. Relocating any endangered species identified may also be an option.

28. What rules are there to limit the impact of mining on the environment?

Cook Islands like other countries have signed up to a number of International obligations relating to ensure responsible environmental management. These and the national environmental laws will be continually updated to keep abreast with technology developments that are part of the holistic process of decision making by the Cook Islands Seabed Minerals Authority and the NES.

There will be areas that will be considered to have ecological values that are so unique or important for Cook Islanders and these can be closed from any development including seabed mining activities. The Authority will work closely with agencies responsible for identifying such areas and any public that may wish to promote such areas and share information on seabed minerals. Minerals are where they are found and cannot be relocated apart from mining. Ecological boundaries are more likely to have flexibility. Note that the ecological values of importance will be in the euphotic level (down to 200 meters), coral atolls and reefs.   Seabed mining will not take place in those environs. It is currently proposed that no seabed mining activities will take place within sight of any land (apart from support vessels entering port)

FINANCIAL MANAGEMENT

29. What financial benefits will the Cook Islands see from its seabed minerals?’

Until mining takes place, minimal revenue apart from application fees and annual rentals will be generated. That revenue will be needed to provide funds for the running of the agencies like the Authority and NES in establishing the legislative framework, the allocation and on-going administration of exploration licences in the first instance.  Before mining takes place exploration activities need to be completed in order to base any capital investment decisions of USD 1-2 billion on robust information. Further a comprehensive understanding of the ecology at depths of 5,000 meters depth and the impacts of mining operations on that ecology  will be required by consenting agencies to base any decisions on whether to allow recovery operations to proceed or not.

It is only once minding is successfully taking place that the Cook Islands will receive revenue via a royalty and taxes on the resources extracted and the profits made by the company extracting the mineral resources and selling the mineral commodities derived from the operation. The Government is developing a fiscal a progressive fiscal regime based on a royalty tax combination common for such projects. The regime is designed to ensure that the Government as the mineral owner receives a fair financial return from the recovery of its mineral resources, receives early cash receipts and shares in any super profits generated from the project. It will also be designed to provide for a rapid payback in capital for the developer and investor, a fair share of the economic rents generated from the programme and provide for fiscal stability.

As noted elsewhere mining will not commence until the technology to recover the mineral resources at the depths encountered. This is predicted to be end of this decade early next decade – some 6-8 years away. By that time exploration presumably will have identified areas suitable form mining and will be able to utilise the emergent technology and secured markets for the mineral commodities generated. Based on economic modelling the government will receive royalties on all production, and tax revenue will commence about 3 years after mining commences. Depending on capital, operating costs and commodity prices in the 2020‟s the revenue stream from royalty and tax take could be between USD50-300 million per annum based on and economic model developed for a seabed mining project of this type.

Indirect benefits from training programmes and possible infrastructure development will occur throughout the development chain from exploration to mining. These can be part of any negotiations or an obligation set in licence conditions on the basis of offers made in bidding for the exploration rights.

30. Can we be assured that the benefits from seabed mining will go to all Cook Islanders?

Financial benefits from seabed mining will be the revenue in the form of taxes and royalties and minor fees and rentals that mining can bring.  This considerable revenue (as  noted above depending on capital, operating costs and commodity prices in the 2020‟s the revenue stream from royalty and tax take could be between USD50-300 million per annum) assuming that recovery operations proceed   will need to be managed wisely and the government recognises this and has plans to establish a “Sovereign Wealth Fund” based on the Norwegian model which has successfully managed the excess revenue generated from oil and gas revenue from their offshore oil fields. A discussion paper can be found on Ministry of Finance and Economic Management (MFEM) web site. In essence   the   proposal   is   for   all   revenues generated from seabed mining   operations   to be deposited into an account managed by a government appointed professional fund management board, with strong rules about how much of the fund can be used in any one year by government. The aim is to allow the fund to grow to ensure there are future benefits available.

As noted elsewhere these fiscal benefits will not commence until recovery operations commence and that will not be for several years. Exploration and detailed appraisal of the results from that work will need to completed and economic decisions made by investors. Further analysis by government agencies for any applications and proposals will need to follow before any permission to allow recovery operations can be given.

A range of other benefits typical of large mining operations are likely such as employment, education sharing of necessary infrastructure etc. Responsible, successful mining companies are aware of the importance  of  a  social  licence  or  working  with  communities.  These  benefits  are  available  through cooperative

31. How  do  we  ensure  future  generations  will  benefit  from  our  national  seabed  mineral resource?

The Cook Islands will take a precautionary approach and establish a sound legal, financial and environmental framework that will ensure the financial and non-monetary benefits that accrue from seabed  minerals  exploration  and  mining  will  be  managed  responsibly  and  effectively  for  future generations. The fiscal regime implemented by the Cook Islands will aim to incentivise responsible companies to explore the Cook Islands‟  minerals, while ensuring an equitable share of any proceeds comes back to the Cook Islands, if and when any mining operations take place. This income will be wisely invested, in accordance with sensible and ethical guidelines limiting the circumstances in which the central fund can be used; this is one way to turn a non-renewable resource into something that yields consistent, sustainable benefits for future generations.  The era of seabed mining is coming; we need to be ready for its arrival.

In addition, a healthy public interest in seabed mining developments, a responsible fourth estate, an open government  approach  in  terms  of  sharing  relevant  and  appropriate  information  through  timely  and accurate reporting of results in recovery operations, revenue generated etc. will ensure that the benefits are captured for this and future generations

32. Are there examples of how we can manage the future revenue we hope to receive from our seabed mineral resource?

The Cook Islands can look to Norway, for example. Decades ago, it made a far-sighted decision to place a proportion of revenue from exploiting its North Sea oil and gas fields into a special fund.  It is commonly known as the Oil Fund and is now worth US$700 billion.  It is the largest pension fund in Europe, despite Norway having a population less than 10% of France‟s or the UK‟s.

33. When are the benefits from seabed mining likely to be realised?

When production starts, as noted elsewhere, mining will not commence until the technology to recover the mineral resources at the depths encountered. This is predicted to be end of this decade early next decade – some 6-8 years away. By that time exploration presumably will have identified areas suitable form mining and will be able to utilise the emergent technology and secured markets for the mineral commodities  generated. Based  on  economic  modelling the  government  will  receive  royalties on  all  production, and tax revenue will commence about 3 years after mining commences. Depending on capital, operating costs and commodity prices in the 2020‟s the revenue stream from royalty and tax take could be between USD50-300 million per annum based on and economic model developed for a seabed mining project of this type. The details of the fiscal (revenue and tax) regime are to be determined closer to the time of mining and capital, operating costs and mineral prices will be known with more accuracy. The aim will be to provide for rapid payback of capital and then an equitable share of the economic rent.

Reasonable application fees/ annual rentals will be charged for exploration and mining licences to enable the Seabed Minerals Authority and NES to recover their operating costs. These are to be determined

Typically other non-market benefits such as employment opportunities, education, and infrastructure investment are likely to be an outcome of exploration and mining development. Central and local government and the community will need to engage with the operators to release these benefits to the community

34. Who will be in charge of these funds?

Refer to the discussion document prepared by the IMF report “Cook Islands; Recommendations on the Design of a Sovereign Wealth Fund and a Loan Repayment Fund for the details. In essence the funds will be managed by a board appointed by the government with the assistance of MFEM. The board members will have relevant of expertise in management of such funds. Details of the operational procedures will be enshrined in legislation

35. How effective is the process to manage these funds?

The Norwegian Sovereign Fund has been successfully managed and the Cook Islands will be adopting a similar model. Annual reporting with public disclosure of relevant reports and other transparent principles will ensure the robustness of operational procedures.

36. How much money is expected to be gained from mining activities?

Financial economic models have been developed for seabed mining in the Cook Islands‟ EEZ using likely costs and revenues. As noted above in Q   XX,   depending on capital, operating costs and commodity prices in the 2020‟s the revenue stream from royalty and tax take could be between USD50-300 million per annum based on and economic model developed for a seabed mining project of this type. Potentially, seabed mining is expected to contribute substantially to the Cook Islands‟ economy and likely to be the largest contributor to GDP, exceeding the tourism sector.

37. How  can  we  make  sure  that  politicians/senior  officials  will  not  use  the  benefits  for themselves?  

It is proposed that all revenue from Seabed Mining will be deposited in a Sovereign Wealth fund as discussed above and be securely managed in terms of a law passed by Parliament. This information will be disclosed to the public. With good transparent governance, including a well operating Official Information institution and a well-functioning fourth estate (the media) , the public will be aware of where the funds are being used. In addition the Cook Islands could become part of the Extractive Industry Transparency Initiative (EITI) should the sector become larger, but at this stage this is not considered a priority. Under EITI the revenues paid by the company are publically disclosed and are balanced by publically disclosed reports of the money given to the Government.

In addition, a healthy public interest in seabed mining developments, a responsible fourth estate, an open government  approach  in  terms  of  sharing  relevant  and  appropriate  information  through  timely  and accurate reporting of results in recovery operations, revenue generated etc. will ensure that the benefits are captured for the community

LICENSING AND COMPLIANCE

38. Who can become a seabed mineral contractor?

Any private Enterprise, a commercial arm of a country, or an entity controlled by or possessing the requisite qualifications as provided in the Act or regulations can apply for exploration and exploitation rights.

39. Are there countries/companies currently exploring the deep seabed minerals?

There  are  no  active  exploration  activities  taking  place  within  the  Cook  Islands‟  waters.  Without exploration  companies,  the  Cook  Islands  will  not  learn  any  more  about  its  mineral  potential  and associated deep sea environments, and nor will any future revenue-raising mining projects arise. The Cook Islands is therefore due to open a carefully selected part of its EEZ to international tender, to try to encourage high-quality exploration applications.

There are exploration activities taking place elsewhere in the world, for example currently 17 contractors have been awarded exploration contracts with the ISA within international areas in the CCZ, the Central and Southwest Indian Ocean, in the central part of the Atlantic Ocean and in the Mid-Atlantic Ridge.

Pacific Island countries have also been active in seabed mineral development. Fiji, Vanuatu, Solomon Islands and PNG – all based around the Pacific Ocean‟s Ring of Fire – have within their EEZs a different mineral deposit type, called seafloor massive sulphides, caused by hydrothermal activity, and have issued a  number of different exploration licences. PNG became the first country in the world to issue a deep seabed mining lease when this as granted to Nautilus Minerals Inc. for the development of a seafloor massive  sulphides  site  in  the  Bismarck Sea,  known  as  „Solwara  1‟. Mining activities  have  not  yet commenced under that lease however.

  Nauru, Tonga, Kiribati and Fiji have become involved in the Area (the seabed beyond national jurisdiction), by sponsoring companies to carry out exploration activities in the Clarion Clipperton Zone between Hawaii and Mexico. To date exploration activities have been undertaken in the Area for MN minerals at depths of (+5,000 meters) however technology to commercially extract minerals at that depth are yet to be developed. The best prognosis for such technology to be available appears to be the end of this decade or early next decade. The viability of running mining operations will be re-assessed at that point, once the costs will be known and can be assessed against the day‟s mineral demand and pricing.

40. What must a person or organisation do to mine the seabed minerals i.e. become a contractor in the Cook Islands?

The information base on the Cook Islands‟  seabed mineral resources is inadequate to base any mining licence plan. Accordingly should the Authority receive an application for a mining licence it would not be accepted.  The  next  step  in  the  development  of  the  Cook  Islands‟  seabed  mineral  resources  is  for exploration to firm up on the details of the spatial abundance and geochemical properties of the nodules the seabed topography and the ecology of the seabed. Accordingly the Authority is getting prepared to allocate exploration licences for this work to take place.

By way of background the various types of permits and licences are provided in the Seabed Minerals Act:

  • A prospecting permit authorises the permittee to search for minerals in the permit area on a non- exclusive basis (i.e. there may be more than one prospector permitted to carry out their research in the same area of the ocean at the same time). A prospecting permit is renewable. The title holder of the prospecting permit may apply for an exploration licence.
  • An exploration licence authorises the title holder to engage in exploration operations in the licence area on an exclusive basis (i.e. no other person will be able to prospect or explore in the specified licence area). An exploration licence is renewable.
  • The exploration licensee may apply for a mining licence or a retention lease in respect of a location. A retention lease is granted if the recovery of a mineral is not commercially viable in the short term, but is likely to become commercially viable within the long term – so the applicant is asking for a site to be reserved for them, so that they can apply to mine it in the future. The exploration licensee or a retention lessee may apply for a mining licence. A mining licence authorises the licensee to engage in the mining and recovery of minerals in an area that has been declared a location and is renewable.

41.  Who has the authority to grant a permit or licence to mine the seabed minerals?

Titles are granted or declined by the Minister responsible for the Seabed Minerals Act on the basis of recommendations from the Cook Islands Seabed Authority subject to the provisions and conditions of the Seabed Minerals Act.

42. How do we know that we have the best contractor to mine the seabed minerals?

There are a number of methods to allocate national resources and the Seabed Minerals Act provide for this. Many countries allocate mineral resources by a first past the post (FPP) method or by public or invited tender. FPP is a good method where good geological and biological information is not available and rewards those companies which recognise the area to have potential minerals. Provided the company has the technical, financial and good standing credentials, the area allocated will be to the first acceptable offer in accordance with legislative criteria. Good ideas and innovation will be rewarded with the first access to the area.

Where it is judged that there is information and there is likely to be even potential interest, the best way to allocate acreage is by a public or closed tender over a prescribed area. A public tender is open to anyone whereas a closed tender decision is made to offer the tender to only those companies that meet a certain threshold based on a mix of financial, technical, previous track record. Those who value the resource the most are likely to be the successful bidder as they will make the best application in terms of their bid be it in terms of work programme, signature bonus. The rules of a tender are prescribed in a regulation and or a request for proposal document which sets out the rules for the tender.

For the Cook Islands first exploration tender round it is considered that an open tender will give the best outcome. If this is not successful (considered to have a low probability) than the acreage could be allocated by using the FPP method.

Any of these processes will require the applicants to provide a great deal of information about themselves, their track record, their finances and their proposed work programme, which will be scrutinised by Cook Islands Government – and in certain circumstances may be put out to wider consultation.

THE AREA – MANAGED BY THE INTERNATIONAL SEABED AUTHORITY

43. Which international areas are currently being explored for manganese nodules?

At present, there are two areas in areas outside any countries jurisdiction being explored for seabed mineral in the form of manganese nodules– that of the CCZ in the Equatorial North Pacific Ocean south and southeast of Hawaii and in the Central Indian Basin of the Indian Ocean.

Polymetallic Nodules Exploration Area, Clarion Clipperton Zone -  granted exploration licences

44. What are the sizes of these exploration areas?

For the exploration of nodules, the area for exploration allocated to the contractor is each of 75,000 sq. km.

SOCIAL IMPACTS

45. Social Impacts must be considered and questions and answers need to be developed in this area.

As any mining for Cook Island nodules will be undertaken in deep waters far away from the Cook Island shores and any settlement, it is anticipated that communities will not be directly impacted by exploration and mining operations. . However there may be some more indirect impacts – e.g. effect to the economy caused by a new revenue stream, which may have negative impacts („the resource curse‟) if not managed carefully. There will also be some associated social benefits and these will be captured in terms of obligations that a company will be required to do based on any commitments made by companies in winning their bid. In any case modern mining companies are very aware of the “social licence to operate” and will endeavour  to be  good corporate citizens and work with communities to ensure a win-win situation through such non market benefits as employment, education and where relevant infrastructure. There are possible social impacts that will arise in terms of additional money from wages being in circulation. Although it is likely that seabed mineral operators may never actually dock onshore at the Cook Islands, if the vessels do in the future come to refuel or re-stock in the Cook Island, while this may lead to new industry and source of income, it could also bring about and pressures from increased movement of different nationalities being employed – entertainment, night life, accommodation costs, changes to Cook Islands culture and way of life etc.

A  strategic  social assessment study could be  undertaken to identify the  impacts of  a major mining operation in the Cook Islands setting using local and international social experts. This report if properly scoped will identify the key issues and provide recommendations on how the impacts can be managed or mitigated and assist the government to design polices to ensure any social disruption will be kept to a minimum.

EXTENDED CONTINENTAL SHELF

46. How can a country define the outer limits of its continental shelf?

According to the UN Convention on the Law of the Sea, every coastal State has rights over its seafloor, known as the „continental shelf‟ of up to 200 nautical miles (subject to delimitation with a neighbouring State, where there is less than 400 nautical miles between the two). A State‟s continental shelf can also extend beyond 200 nautical miles, up to 350 nautical miles, if certain criteria are met – including specific geological features being present. To claim this  extended Continental Shelf  a  State  must  lodge  the relevant data with a United Nations body, called the Commission on the Limits of the Continental Shelf (CLCS).

The CLCS is the technical body which receives submissions for the outer limits of a States Continental Shelf. It reviews the claims, and makes recommendations to the State on the establishment of its outer limits. The limits of the shelf established by a State on the basis of these recommendations shall be final and binding.

If any seabed mining occurs in the future upon a State‟s extended Continental Shelf (as opposed to the Continental Shelf up to 200nm), royalty payments must be made to the ISA

However, a developing country which is a net importer of a mineral resource produced from its continental shelf is exempt from making such payments or contributions in respect of that mineral resource. This would apply to the Cook Islands situation.

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