No bids have been received by the Cook Islands Seabed Minerals Authority (SBMA) to explore the ocean floor for minerals in the country’s Exclusive Economic Zone (EEZ).
The tender which was launched in August last year by the minister responsible for minerals and natural resources, Mark Brown, expired last month.
The tender was for exploratory licences over 10 blocks of the Cook Islands’ 1.83 million square kilometre EEZ.
In a statement, SBMA said the first five-month application phase for the tender expired in January this year without any applications received by the authority.
SBMA said in a statement it was not surprised by the lack of interest, although there were serious expressions of interest from Japan, Korea, China, the US, UK and Germany.
“This result was not entirely unexpected, as stated by Minister Brown at the tender opening in August 2015, when he said that he did not expect a mad rush of applications at this time,” the statement added.
“This realistic view is based on a number of current external market factors, which are beyond the control of the Cook Islands, as a deep sea mineral resource owning nation.
“These factors include the high cost of deep sea minerals exploration costing many millions of dollars of high risk capital investment and the current depressed global mineral markets.”
Seabed Minerals Commissioner Paul Lynch told CI News an independent review was being undertaken by the SPC-EU Deep Sea Minerals Project based in Fiji to determine the next step for them to undertake.
Despite having received no formal applications for seabed mineral exploration, SBMA said there were ongoing preliminary discussions between the authority and a number of overseas entities, which remain interested in undertaking licenced exploration activities for deep seabed minerals in the Cook Islands nodules zones.
The Cook Islands waters contain a valuable and unique manganese nodule resource estimated at 10 billion tonnes, situated on the deep-sea floor at 5000 metres depth and stretching for hundreds of kilometres, from remote north east of Penrhyn to the far south of Mangaia.
SBMA said since 2013, under the Cook Islands Seabed Minerals Act 2009,
it had established a robust licencing system and regulatory framework, which included an option to allocate exploration rights by general application and also by a tender process.
The authority said this tender process option allowed the release of a limited number of specific nodules blocks, over which valid applications to explore could be received, evaluated and granted.
“This tender process option was recommended to the previous Government on advice sought in 2008 from the Commonwealth Secretariat (CommSec) as a means of controlling and attracting deep sea mining interest to our EEZ and formed a key plank of the Seabed Minerals Act 2009, drafted with CommSec assistance.
“Our national tender process was founded on a world standard regulatory framework of licencing, which was developed with the assistance of the natural resource adviser, Darryl Thorburn, who was contracted since 2012 until November, under assistance provided by CommSec.
“It is also based on the New Zealand Petroleum and Minerals (NZPAM) licencing system and advice. Expert legal and technical assistance and advice was also obtained from the SPC EU Deep Sea Minerals Project.” SBMA said currently the appetite for allocating risk capital for funding such a venture as deep sea minerals exploration was exceedingly tight, due to the global mineral price cycle being at its lowest for the last 20 years or so.
“The authority’s view is that currently there is a distinct lack of global risk capital investment for exploration for deep sea minerals, given this low global demand for minerals. “It is considered that this will be the prevailing economic setting for at least 12-24 months.
“However, the lack of applications at this time may not be an entirely bad result, as the Cook Islands has been taking a ‘steady as she goes’ approach. This enforced delay will allow more review of the regulatory framework, ongoing capacity-building, promotion, consultation and time to see how the deep sea mining is progressing in other nations and in international waters.”