Social cost benefit analysis for deep sea minerals mining

Abstract

Many countries in the Pacific Island Region have significant mineral deposits on the seafloor within their national jurisdiction. Emerging technology has considerably increased the probability that these deposits could be mined profitably. However, to date no one has attempted to determine if such activity is likely to improve the well-being of host country citizens. This paper uses a cost-benefit analysis framework to formally assess the social costs and benefits of mining deep-sea minerals in the Pacific Island Region. Since this type of mining has yet to occur anywhere in the world, the analyses are based on realistic yet hypothetical mining scenarios developed for three mineral deposits thought to have a high potential for economic viability: seafloor massive sulphides deposits in Papua New Guinea, manganese nodules in the Cook Islands, and cobalt rich crusts in the Republic of Marshall Islands. In each scenario, costs and benefits are based on the operation of a single optimized mine site. The results indicate that deep-sea mining has the potential to increase the well-being of the people of Papua New Guinea and the Cook Islands. In contrast, given current technology and commodity prices, the mining of cobalt rich crusts is unlikely to improve the well-being of Republic of the Marshall Islands residents.