Mining company paying holding rights for Cooks seabed area

Transcript

PAUL LYNCH: Ocean Minerals Limited - it's an American company interested in rare earth elements that were in our sediment. They did some research in surveys that were done in the 80s and they found there was a high abundance of rare earth elements in our waters have asked the government just to reserve or put a holding right over a key block that they believe is valuable. And they have that for five years and they have to then go out and raise capital to apply for the block formally through an exploration licence procedure and basically fund $20 million exploration programme to see whether that block that they're interested in is viable commercially. Or in terms of seabed minerals whether there are rear earth elements in the sediment. But since then there has been an uptake in interest in our Manganese nodules which are very high in cobalt - because the global mineral price in cobalt has gone up recently so there is some renewed interest in our nodules and this is what this company OML is interested in.
They're not able to just pay $20 million to fund a boat to come up here and explore so they've asked the government to hold one of our key sites for them so they're paying $8000 a month until they either apply for the exploration licence over that block or their time limit runs out and they lose it.
[It's not] an exploration lichen or a mining licence at all, it's a precursor to that. They've found this key block from the research they've done, while the go and gather capital they don't want someone else to get into that block so we now have an amendment to our act that allows the minister to reserve it for strategic or economic benefit for the Cook Islands, that's why they had to offer an economic benefit which is this $8000 a month payment, which would then qualify for the minister to declare that block reserved.

TIM GLASGOW: How big is the block and where is it actually located?

PL: Right in the nodules belt between Aitutaki and Penrhyn and the nodules belt is about 1000km long and 250km wide. It's a massive Manganese nodule resource belt if you like. In the deep sea of about 4000 to 5000m

TG: If they're paying this amount of money and holding the area, they must be relatively confident that they're going to be able to extract what they want.

PL: Well I think the decision could only really be made after they explore because they might explore and realise the preliminary research that was done wasn't what they expected and in the mineral sector you explore and the results will determine whether you take the next step with is the extraction.