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Endeavour Mining Capital wants exclusive rights to manganese nodules

Canadian company, Endeavour Mining Capital are seeking a grant of exclusive rights to mine the manganese deposits on the seafloor within Cook Islands waters.

The company wants to create a ‘project specific’ company for public listing on the Canadian Stock Exchange and claim their company will invest 32 million of their own venture capital to begin the project.
The stock exchange listing is to raise the ‘necessary equity and debt finance’ through investors buying shares.

What they are seeking from government is an exclusive mining rights ‘to explore the feasibility of the project’ and say ‘sea-floor mining is in a similar position to off-shore oil and gas drilling in the 1960s’.

Economic benefits to the country will flow from employment opportunities of $34 million, project royalties of $8million annually, $80million in business taxes annually, and up to $6million in income taxes on wages.

They want the Cook Islands to become a pioneer in seafloor mining with Endeavour Capital claiming that the time is now to try again as the metallurgical recovery processes have improved but need further test work carried out.

Nevertheless, the company admits that ‘seafloor mining is new and lacks international consensus on environmental standards’.

The proposal is not the first time that the question of seafloor mining of manganese nodules has been raised in the Cook Islands. In 1997, there was a similar exploration project led by businessman Tap Pryor and that project expended $1million but went no further, presumably because it was not to be viable in terms of financial returns, insufficient technical expertise and methods. There is also said to have been great opposition from the Aronga Mana at the time.
Similarly, the new proposal is likely to run into serious opposition from various sectors of the community because of environmental issues and the adverse effect on our marine life on which our country depends.

Comments and concerns raised on the floor revolved around the environmental issues of how seafloor mining would have on the marine
environment.

Queries raised include why they want ‘exclusive rights’ to the entire EEZ of the Cook Islands, which has a huge area? Given that our EEZ measures 1million square kilometers, why not just a defined area.

By comparison, in an internet search under manganese exploration showed an overseas company involved in manganese seafloor mining since 1999 has been granted 75,000 square kms, whereas Endeavour is asking for 1,000,000 square kms.

Financing

Is the company already listed on the stock exchange or will it be a brand new listing? The company claims that they will expend around $1billion in capital investment over a three year period.

Would the government become a shareholder? If not, would the local Cook Islanders be allowed to purchase shares in the company?
Gordon Keep seemed uncomfortable with the idea of direct share buying by Cook Islanders, warning that such investments can be very ‘high risk’. But, the answer is yes, publicly listed stocks and shares can be purchased by anyone with the money and means.

Takitumu Mayor, Teariki Matenga jokingly asked whether Cook Islanders would be given a discount on the share price.
Operational methods and effects on environment
Those who were interested in the project asked how the operation will be carried out? Where will be ships and specialized equipment come from? Would they use submersibles for their field reconnaissance and data compilation and would MMR be allowed to ‘piggyback’ on some of these trips to see what is at the bottom of the ocean floor?

Will there be smelting operations, and if so, where would they be
carried out?

What methods does the company propose to use to lift the manganese deposits to the surface, given that their estimates are that the deposits are in 5km deep waters.

What are the safeguards to our Environment?

What are the safeguards and guarantees that there will be no adverse effect on our marine environment through dredging and mining activities on the seafloor?

The mining activities are bound to have an adverse effect on our tuna fishing industry and our country’s declaration of our waters being a whale sanctuary.

How will the company handle all the attendant waste products which are the usual byproduct of mining activities on land and the ocean.
Would our country suffer from an environmental disaster similar to PNG, with the Ok-Tedi environment disaster caused by mining activities by BHP-Billiton, the largest mining company in the world.
Ok-Tedi was a gold and copper mining operation in partnership with the PNG government who were paid handsomely, but the mining activities had toxic waste as a byproduct.

These 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 badly affected with no more drinking water or bathing or for agriculture because of the toxic waste. Legal action was taken against BHP-Billiton in a class action by the downstream landowners who sued the mining conglomerate for $4billion

After a huge amount of bad publicity for the company in Australia, their home country, the mining conglomerate eventually offered an out of court settlement of close to NZ $40 million to the 50,000 villagers, on condition that the company was to be granted immunity from further legal action for mining related issues.

BHP has now pulled out of the PNG operation but the effects of the disaster are said to take another 300 years to remediate. For more information just type in Ok-Tedi on your internet search.
Employment concerns

· What role would local workers play in the project, given it is so highly specialized?
· The increased number of foreign workers needed for the project
· Would the company have time to train local workers given the timelines and pressure to present shareholders with profits
· What are the social effects on the Cook Islands people?

This morning CI Herald received a call asking us to let the community know that the Aronga Mana of the Cook Islands, during the time of Teaia Mataiapo, Lady Maui Short had signed a document expressing their opposition to the mining of the manganese nodules on the seafloor. The caller said the opposition still stands. "