Nauru Could Earn Millions After Backing US Deep Sea Mining Pathway
Nauru is a step closer to mining in international waters under highly contentious United States legislation.
The path has been set out in the nation's new agreement with Canadian mining group The Metals Company (TMC) and sits outside international law.
News of it comes as delegates from around the world have gathered in Jamaica at the International Seabed Authority (ISA) - the world's deep sea mining authority.
Nauru is among the body's 170 members and has special rights to a deep sea mining area of the Pacific Ocean in international waters under international oceans law. This area is known as the Clarion Clipperton Zone (CCZ).
The ISA's jurisdiction of the CCZ has effectively been challenged by the US, which has claimed its own authority over deep sea mining in international waters through its high seas mining legislation.
Nauru has had ambitions to mine in the CCZ for more than a decade. Since 2011, it has partnered with TMC to explore its block of the area for deep sea mining potential.
However, after more than a decade of research, TMC has become frustrated by its inability to gain a commercial mining licence through the ISA because the body has not finished developing a mining code. The process began in 2014 and is ongoing.
Now, it has backed the US claim as a deep sea mining authority, and international environmental lawyer Duncan Currie of the Deep Sea Conservation Coalition said it was pulling Nauru with it.
The company, he said, had effectively incentivised Nauru to mine under the US pathway and break international law through the terms of its new contract.
These included provisions for millions of dollars in payments to Nauru as well as an option to buy shares in TMC once deep sea mining occurred through US legislation.
"[The contract specifically] states [Nauru] will be paid set amounts once the company does engage in seabed mining under the US regime. And it's a significant amount of money. It can be initial payments of US$265 million and can go up to US$515m.
"And then on top of that, there are what's called share warrants, which is the ability for Nauru to buy into The Metals Company at a favourable price," Currie said.
Meanwhile, potential payment amounts available through the ISA pathway, should mining occur, have been removed from the public version of the new contract.
Currie believes it would be a fraction of what had been offered through the US pathway.
At the ISA meeting in Jamaica, delegates have raised concerns over the conduct of TMC and the US. While Nauru's new contract had not come up in official sessions, Currie said it was being heavily discussed on the "sidelines" and "in corridors".
"France, in particular, referred to what they called the elephant in the room. Then they changed it to a blue whale in the room.
"[The contract] basically incentivises countries to breach international law frankly, and it could lead to other countries saying: 'Well, this looks good. We'll do the same thing.' So that's really why it's giving delegates concern. And of course, this kind of rogue mining - which it really would be - poses enormous risks to the deep seabed."
The ISA said it would not comment on the contract, and the US agency in charge of deep sea mining - the National Oceanic and Atmospheric Administration (NOAA) - referred RNZ Pacific's request to TMC and Nauru. Neither responded.
Thirty-seven countries support a moratorium on deep sea mining in international waters. The practice has divided the Pacific. Supporters include Nauru, Tonga and the Cook Islands, while Fiji, Vanuatu and New Zealand were against it.
'We all belong to the same ocean' - activist
Indigenous rights advocate Solomon Kaho'ohalahala was at the ISA meeting for Hawaiian NGO Maui Nui Makai network. He wanted Nauru and mining supporters to consider the whole region.
"I want to remind these nation states that we all belong to the same ocean, and that any of their activities that may be detrimental to that ocean is going to have an impact on all of us," he said.
Ultimately, Duncan Currie said, Nauru had been backed into a corner in this contract.
No amount of money or compensation would fix that, he said, particularly as the country stood to lose a lot.
"Nauru, by entering into this agreement, has placed itself well outside international law.
"Quite honestly, it is The Metals Company wanting a quick return, and Nauru is left there really getting what they can," Currie said.
The new contract between Nauru and TMC is dated 29 May. According to online records of the US Securities and Exchange Commission, it was filed with the agency on 4 June.
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