TAKE A HARD LOOK AT UNDERSEA MINING IN COOKS

Editorial

The Cook Islands Herald RAROTONGA, Cook Islands (Dec. 2, 2009) - While our politicians congratulate themselves on getting the Seabed Minerals Bill enacted in order to pave the way to the riches beneath the sea, we hear that government is considering using borrowed money to set up the Seabed Minerals Authority.

Before counting our chickens before they hatch (in terms of the mining companies that are supposedly going to flock to the Cook Islands) perhaps our leaders need to step back and take an impartial look at the realities of the situation.

Right now, our country is only at the start of the journey into uncharted waters and our politicians need to be realistic about their expectations and also of the due diligence necessary of companies that will approach the Cook Islands.

Firstly, the manganese nodules are lying at great depth (estimates are 5,000 [meters] beneath the sea); and there is no proven, cost effective method for recovering the minerals from such depths, making seabed mining an unknown quantity.

The only company with any credibility to approach the Cook Islands re the minerals is Endeavour Mining Capital a publicly listed, Canadian company whose reps visited Rarotonga in November 2007.

During that visit, the Endeavour reps held a public meeting in Kent Hall and told the audience they wanted to create a ‘project specific’ company for public listing on the Canadian Stock Exchange to raise the ‘necessary equity and debt finance’ through investors buying shares.

Endeavour said they would invest NZ$32 million [US$23 million] of their own venture capital to begin the project. What they are seeking from government is an exclusive mining rights ‘to explore the feasibility of the project’ and said ‘sea-floor mining is in a similar position to off-shore oil and gas drilling in the 1960s’.

At the meeting, the company admitted ‘seafloor mining was new and lacked international consensus on environmental standards’. At the meeting, the Endeavour reps claimed the time was right to try again as the metallurgical recovery processes had improved but needed further test work carried out.

The Endeavour reps claimed economic benefits would flow from employment opportunities of NZ$34 million, project royalties of NZ$8 million [US$5.6 million] annually, NZ$80 million [US$57 million] in business taxes annually, and up to NZ$6 million in income taxes on wages.

The proposal was not the first time that the question of seafloor mining of manganese nodules had been raised in the Cook Islands.

Politicians obviously believe there will be benefits from the millions brought in from prospecting permits; exploration permits; retention leases; and mining licensing rights plus royalties and so on. If this is true, then why is the government even considering using borrowed funds for such a purpose?

In the beginning, all we need is a minimal staff of the Commissioner with free secretarial support available from the Office of the DPM (at no extra charge). The Commissioner could perhaps operate from an office in MFEM or the DPM, all in the interests of keeping overheads down to a minimum. The Advisory Board is also necessary as a safeguard but as they will only be called upon when needed, they don’t need a permanent home.

What are the safeguards to our Environment?

At the meeting, this writer raised the matter of safeguards and guarantees to ensure there will be no adverse effect on our marine environment through dredging and mining activities on the seafloor. Mining activities are certain to have an adverse effect on our tuna fishing industry and our country’s declaration of our waters being a whale sanctuary.

The fear is our country may suffer from an environmental disaster similar to PNG, with the Ok-Tedi goldmine environment disaster caused by the mining activities of BHP-Billiton, one of the largest mining companies in the world.

Ok-Tedi was a gold and copper mining operation in partnership with the PNG government who were paid handsomely, but during the mining activities, arsenic, a toxic byproduct of mining gold, gushed down the Fly River.

The toxic waste poisoned the rivers and environment downstream of the mine in Ok-Tedi and killed all the fish in the river and all the resources on the banks of the river.

The lives of 50,000 PNG people were ruined with no more water for drinking or bathing or agriculture because of the toxic waste. Legal action was taken against BHP-Billiton in a class action by the downstream landowners who sued the company for NZ$4 billion.

The aftermath of the disaster was a huge amount of bad publicity for BHP in their home country of Australia and the company eventually offered an out of court settlement of NZ$23.6 million US to the 50,000 villagers (NZ$472 per person) on condition that the company was to be granted immunity from further legal action for mining related issues. Environmentalists condemned the pitiful sum per person affected. BHP has now pulled out of the PNG operation but the effects of the disaster will take another 300 years to remediate.

Are our politicians paying attention? Not likely, and it is a concern that our politicians are so in favour of mining, they lack the impartiality and ability to sort out the genuine approaches from the charlatans that are bound to approach the Cook Islands over the coming years.

The Cook Islands Herald: http://www.ciherald.co.ck/Times.htm Copyright 2009 © Elijah Communications Ltd. All rights reserved

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