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Public meeting on seabed mining fund

Sunday September 01, 2013 Written by Published in Local

The public is invited to a meeting tonight to offer their ideas and discuss the establishment of a sovereign wealth fund being set up to store prospective seabed mining revenues.

The Ministry of Finance and Economic Management will be holding the meeting to consult with the public on the ongoing process of establishing the fund.

“The Sovereign Wealth Fund will be a fund for everyone in the Cook Islands,” said Minister of Finance Mark Brown. “It is very important that we set up this fund correctly today so we can ensure the success of our nation moving into the future.”

“In this sense it is important to know the community’s views and understand how these savings should be managed for the benefit of the current generation, their children, and their grandchildren.”

The meeting will be held tonight at Sinai Hall in Avarua at 6pm.

Some of the issues the ministry is looking to discuss include priority areas to spend revenue from the fund, how to protect wealth for future generations, fund administration, investment strategies, and how to ensure transparency.

According to a recent story in British newspaper The Guardian, marine geochemist David Cronan from London’s Imperial College estimates the two million square kilometre exclusive economic zone of the Cook Islands contains 10 billion tons of manganese nodules.

The nodules are reportedly rich in manganese, nickel, copper, cobalt, and other rare earth minerals used in personal electronic devices such as mobile phones.

The minerals are experiencing significant demand as the world’s appetite increases for cutting-edge technological products.

A declaration has been signed under the Seabed Minerals Act, stating that prospective mining activity will not occur within 50 nautical kilometres around any island in the Cook Islands – policy the government hopes will alleviate environmental concerns that have long been an issue with seabed mining projects.

The technology to harvest the minerals is still being developed and local officials are looking at optimal methods to extract the nodules – a process described by Brown akin to harvesting, as opposed to dredge-like mining.

Also present at tonight’s meeting will be IMF-funded consultant Dick Emery, who visited Rarotonga just over a year ago to provide advice on design options for the sovereign wealth fund.

Previously, Emery said the fund should be established in a manner that provides protection of seabed revenues in perpetuity.

Additionally, the fund should be invested in low-risk financial instruments, and assets should be spent according to “clear and consistent principles”.

Brown said the government will also be looking at other nations to learn from their mistakes and successes in establishing funds.

Norway, which has roughly $940 billion stashed away in a sovereign wealth fund as a result of oil revenue derived from energy reserves in the North Sea, has been mentioned as a possible model for the Cook Islands.

“The important thing is to advise people that there is a framework being put into place,” said minister Mark Brown. “We’re looking forward to some feedback.”

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