Seabed mining may not yield the bonanza some are counting on, according to some commentators speaking at this week’s Deep Ocean Symposium.

An Australian economist, Professor Christopher Flemming has cautioned Cook Islands of its decisions on seabed mining amid findings from two completely different outcomes of cost-benefit analyses.

Professor Fleming delivered a presentation at the Deep Sea Symposium which was held at the University of the South Pacific on Thursday.

He said the economic case of seabed mining is far from settled and it is widely agreed that direct benefits to host nations like employment will be small.

There were two reports which he summarised at the symposium.

One was commissioned by the Pacific Community and done by a firm and a consulting company called Cardno, and the other was commissioned by the World Wildlife Fund and was done by Flemming and a colleague.  

The first report from the Pacific Community and Cardno (2016) discovered that the net benefits will stand at US$467M, through preliminary cost-benefit analysis of a hypothetical mining scenario for Polymetallic Manganese Nodules in the Cook Islands.

However, Flemming said the research only reports just the scenario with the greatest net benefits.

The results of the models indicate modest employment and income effects relative to annual royalties and all costs are based on technology that has been piloted but not proven at the commercial level of operation. Cost estimates are highly uncertain and may change significantly according to Flemming.

In an interview with Cook Islands News, Flemming said there's some real concerns around the long-term prices and if the company that's doing it isn't making big money, then there would be nothing or very little as a Cook Islander.

“I would urge caution. I think, going forward and I guess the other aspect we haven't considered explicitly in the Cook Islands is we know that tourism is by far your biggest industry,” he said.

“How are the tourists going to perceive the Cook Islands if they know deep sea mining is happening?  There is a risk that they perceive deep sea mining negatively and therefore choose another destination where they feel perhaps is more environmentally minded.

“And there is some research out of Fiji that suggests existing tourists are far less likely to come back if there is deep sea mining, far less likely to recommend, and Fiji is a destination if there's deep sea mining.

“And over half of the tourists that were surveyed in that research thought deep sea mining would have a negative impact on their holiday experience, their snorkelling, their scuba rink, and so forth. So I think that's a real risk to the Cook Islands that nobody seems to have considered.”

He emphasised that the idea was to give an understanding of how an economist would look at the issue of deep-sea mining, whether to do it or to not, and basically making the case that an economist would add up all the hoped-for benefits, compare that to the costs, and see if the benefits outweighed the costs.

“So the first one, the Cardano report, was strongly supportive of deep-sea mining and suggested there would be a very large, quite a large financial return but I think when you look at their report in more detail, you realise they've missed a lot of things out,” he said.

“So they haven't included any cultural values in the analysis. They've really underplayed the environmental impacts, so virtually no influence of environmental impact on the analysis, and very much all focused on a best-for-all.”

For the World Wildlife Fund’s report 2016, Flemming said it was hard to do a proper analysis because everything was so uncertain.

“The environmental impacts are so uncertain, even really the economics is quite uncertain but I think where we concluded was that it's too early to tell, and therefore we would recommend pausing and waiting until you have more evidence around what the economic impact is likely to be, but also obviously the environmental science.

“What is clear, and both reports found, there won't be any or very little direct benefit to Cook Islands.”

According to Flemming, there'll be very few jobs, few Cook Islands companies benefiting as most of the benefits in terms of jobs and company income will go to offshore companies.

In order to get some benefits for the Cook Islands out of the deep sea mining, these schemes have to be done right.

Fortunately depending on more recent evidence, there are a few reports that have come out in 2024 which have really raised the question of the financial viability, Flemming said.

“Obviously, it's new technology, so it hasn't been proven. It's very deep, and therefore a very difficult and thus expensive place to operate,” he added.

“So the cost of actually doing it is probably much higher than we've been estimating and the benefits in terms of the sales of the minerals, the future for those mineral prices is perhaps not as strong and that's due to a couple of things.”

Flemming suggests that what is needed is an updated financial feasibility assessment; an assessment of future tourists’ perception of seabed mining and how it might influence their travel plans/expenditure; and an updated cost-benefit analysis.