Who decides, and when

Three things changed, quickly

Deep-sea mining has become a significant issue in this Cook Islands general election in a way it has not been before — at a moment when the industry, and the situation on the ground, has moved unusually fast. This note pulls the changes together from published documents and asks what they could mean for governance. It contains no recommendation. It is not for Koinon to say what the Cook Islands should decide about its seabed.

The transaction — the Cook Islands on NASDAQ

Odyssey Marine Exploration had worked in the Cook Islands for more than ten years and had become financially distressed. American Ocean Minerals — a Delaware company established in May 2025 — merges into it. Odyssey survives as the public parent and takes the American Ocean Minerals name. Odyssey's own shareholders are left with about 6.6 per cent after a 25-for-1 reverse split. What the structure delivers is a liquid NASDAQ listing for privately held seabed assets, without a formal initial public offering. The registration statement was filed on 11 May 2026 and amended on 1 July and 5 August.

Not on the public record

The filing no longer quantifies either holding. For EL3 (Moana Minerals, 23,630 km²) no closing percentage appears anywhere in the registration statement. The April announcement said 80 to 100 per cent of the parent, while the filing itself gives only an option to reach 67 per cent. For EL1 (CIC Limited, 211,545 km²) the 48 per cent figure was deleted from the 5 August amendment and not replaced. Around the positions sit convertible notes, equity-exchange agreements and purchase options. Both are now described in the same words — acquired "on a staged basis over time" — and the filing itself calls the combination a "staggered acquisition framework." Whether it amounts to control is not stated. No public assessment exists.

A private royalty now sits above everything else

In February and March 2026, a perpetual private royalty — 1 per cent of gross proceeds on licences EL1 and EL3 — was created and assigned out of the group to an Ontario numbered company, in consideration of a US$15 million secured note rather than cash. The owners of the Canadian company are not public. There is no buy-back, no step-down, no minimum, no recoupment and no termination. A royalty on gross proceeds does not depend on the project being profitable — only on it producing. Both Cook Islands agreements are governed by New York law, with disputes referred to ICC arbitration seated in New York.

Signed, unpublished — and the finance beside it

The Seabed Minerals Authority states that the framework reaffirms full sovereign control and is not a licence or approval, and there is no reason to doubt that. But the legal framework may matter less than the finance that sits alongside it. The US Development Finance Corporation insures investors against expropriation and unpaid arbitral awards — but only where the host state has signed a bilateral agreement recognising subrogation. Once the insurer pays, a United States federal agency takes over the investor's claim and pursues the government itself, generally through a state-to-state procedure outside the courts named in the licence. As at 1 April 2026, some 20 countries had signed frameworks of this kind, with negotiations reported with at least seventeen more.

Instruments built to sustain supply the market would not

Three instruments under consideration in many of these discussions around the world now point the same way, in terms of mineral exploitation that may no longer be on a free-market, profit-maximisation basis. The first is enforceable price floors, described as the next stage of the US critical-minerals programme in a New Zealand Cabinet paper released in May 2026. The second is strategic stockpiles and offtake-linked public lending, deploying capital against supply security rather than project return. The third is royalties that pay on production rather than profit — exactly what the private claims created in February and March do at project level. No mineral reserve has been established on any licence, and published projections remain uncertain.

The fiscal regime — four instruments, one indifferent to profit

The Cook Islands fiscal regime, like that of most countries, currently centres on profit-based taxation.

Royalty — 3% of export value	Production-based
Corporate income tax — 20%	Requires profit
Withholding tax — 15% on dividends	Requires distributions
Transfer-pricing discipline	Requires a tax base

Only the royalty is indifferent to whether the project ever makes money — and the private royalty assigned out of the group in early 2026 ranks ahead of it.

Governance — strong, for the stage now ending

All three Cook Islands exploration licences are published in full on the Authority's website — annexes, work programmes and budgets included — which is more transparency than the UN-led International Seabed Authority manages. As instruments the licences also concede little. There is no stabilisation, since each is subject to the Act and Regulations "as amended from time to time". There is no entitlement to progress, since a right to apply for renewal or a mining licence is not a right to either. Fiscal terms are set outside the licences, so the royalty can be changed without touching one. And Cook Islands law applies, with no arbitration clause anywhere. But none of that carries forward into the exploitation stage automatically, and no model mining licence is currently public.

Questions with definite answers

None of these asks whether the Cook Islands should mine.

1. Was the Authority asked to approve the change of control — and the assignment of the royalties out of the group in February and March 2026?
2. Who ultimately owns the company that will hold these licences, and the Ontario company that now holds royalties over them?
3. Will the text of the framework signed with the United States be published before it is acted upon?
4. Has the Cook Islands signed, or been invited to sign, any agreement recognising the Development Finance Corporation's subrogation rights?
5. Will the form of any mining licence be published in draft, as the exploration licences were published in full, and before any application is decided?
6. Has the fiscal regime been tested against a project that produces without being profitable, and on what basis will the 3 per cent royalty be assessed?