Deep Seabed Mining A Study Of Historic Developments, Current Status And Implications For The Future.
By Colin Roberts
Deep Seabed Mining
A Study Of Historic Developments, Current Status And Implications For The Future.1
By
Colin Roberts
Introduction
It is a fact that the exploration and exploitation of minerals and hydrocarbons is becoming more difficult. It is also a fact that we have within our reach a finite quantity of resources. However, before we start looking beyond our planet for supplies of much needed resources, it would be wise to look to the available, albeit not so readily available, resources of the earth's oceans.
The floor of the world's oceans comprises about 71 percent of the earth's surface or approximately 363 million square kilometers.
The concept of a Deep-Sea Mining Industry has generated commercial and academic interest and controversy for the last seven decades. From a geological perspective, the mining of the deep seabed is potentially an enormous source of mineral resources.
From an engineering perspective, the hostile nature of the ocean environment limits the exploration and exploitation of the deep seabed to the technologically and economically advantaged States. From a legal perspective, the principle of "Common Heritage of Mankind,"2 raises questions including sovereignty, security of tenure, environmental responsibility, intellectual property and production ceilings, to name but a few. Part XI of the United Nations Conference on the Law of the Sea ("UNCLOS III"), and the 1994 Agreement Relating to the Implementation of Part XI of UNCLOS are addressing potential problems through the establishment of the International Seabed Authority ("ISBA") and its Council's drafting of the Regulations on Prospecting and Exploration for Polymetallic Nodules in the Area3.
The author of this paper has examined how ISBA is addressing these potential problems through the draft mining code and attempts to identify future implications for the industry.
Humankind is now amid a scientific and technological revolution with respect to marine resource exploration and development. Since World War II, humankind's increasing knowledge of the sea has been widely exploited.
The advances in marine science and technology ultimately benefit all people. Few States have failed to gain, in some way, from these developments. Naturally, it is the technologically and economically advanced countries (from which most new developments emanate) that stand to gain most in absolute terms. It is not surprising, therefore, that these countries have traditionally favored supporting the "freedom of the seas" doctrine, and have advocated minimum international interference in marine resource activities.
The response of the technologically less advanced coastal States to the new era of marine resource development has generally been different. These States -- not all of which, it may be added, developing countries ("DCs") -- have favored greater coastal State jurisdiction over offshore resources. It is this group that took the lead in pushing for the 200 nautical miles4 exclusive economic zone ("EEZ") at the UN Law of the Sea Conferences (UNCLOS).
By contrast, the high seas are entirely outside the sovereignty of any State. All States and persons are entitled to freely sail upon, fly over, fish within and exploit the resources from under the high seas. The only limitation upon this freedom flows from international agreements, specifically concluded, with a view to conservation of fish stocks, pollution and mineral production.
The absoluteness of this distinction of the territorial seas and the high seas has been qualified in two major respects: by the emergence of the concepts of the continental shelf and of the EEZ. The first significant reflection of this concern was the Truman Proclamation of 19455.
Subsequently, various Conventions and Agreements have evolved to regulate the Deep-sea Mining Industry (The Industry) on the high seas, in the "Area", beyond the limits of national jurisdiction.
Deep Seabed Mineral Deposits
The main types of potential deposits of economic value occur on and beneath the seabed as hydrocarbons, aggregates, placers, precious coral, phosphates, metalliferous sediments, polymetallic sulfides, manganese nodules and cobalt-rich manganese encrustations. With the recent interest in rare earth elements (critical minerals), this article is interested only in the last four, as these are found in the deep ocean beyond the limits of national jurisdiction, referred to hereafter as the Area.
Legal History and Politics
UNCLOS III had its origins in the Seabed Committee established in 1967 by the United Nations General Assembly ("UNGA") to examine the question of the deep seabed lying beyond the limits of national jurisdiction over the continental shelf.
In 1969, before the Seabed Committee could finish its work, UNGA passed a resolution for a moratorium on deep seabed mineral exploitation6.
In 1970, the Seabed Committee tabled its report titled the "Declaration of Principles Governing the Seabed and the Ocean Floor and the Subsoil Thereof, Beyond the Limits of National Jurisdiction"7 setting down 15 principles. Three of which had relevance to deep seabed mining. In short, they were the principle of "Common Heritage of Mankind". The Area's resources were to be exploited res communis; and a Treaty was to be established among all States that would provide for administering the Area and its resources and for equitably distributing the benefits generated, especially to the Least Developed Countries ("LDCs").
The chains of events were unsettling the potential U.S. deep seabed miners as well as U.S. industry organizations such as the American Mining Congress. At that time, the U.S. was dependent on outside sources for 95 percent of its manganese consumption, 20 percent copper and 98 percent cobalt. Exploration was already in progress, and research and development was underway into metallurgical processes of manganese nodules. Investments were substantial. U.S. miners were concerned over the power of the DCs in the UNGA and were demanding from their government the assurances of the following:
- A right to freely explore areas not owned by others;
- On discovery, the exclusive right to evaluate and utilize the deposit;
- Security of tenure -- from poaching or sovereignty;
- Freedom to remove or sell;
- Freedom from government restriction of treatment or prices;
- Knowledge of future taxes and other burdens; and
- A Grandfather Clause minimizing impact from future international treaties.
On December 10, 1982, the UN Convention on the Law of the Sea ("LOSC") was opened for signature. It was signed by several States. The major non-signatories being the Federal Republic of Germany, United Kingdom and the United States. They were opposed to parts of Part XI, the Convention regime for deep seabed.
According to the U.S. Study on Oceans Policy, the Convention's non-seabed provisions regarding navigation, overflight, the continental shelf, marine research and the environment generally reflected customary international law and were acceptable to the United States.
After fruitless U.S. efforts at the negotiating table, President Reagan declared that the U.S. would not sign the Convention. It was argued by Malone, J.L.8 that:
"The 'common heritage' is certainly a noble phrase. Unfortunately, the phrase became severely distorted in its meaning during the long LOS negotiations. It became a guise under which the seabed's wealth was to be governed, regulated, and allocated under the false assumption that every nation has an undivided property interest in the deep seabed, and therefore, each is automatically entitled to its proportionate share of the fruits from those whose efforts produce wealth from what would otherwise be economically worthless. The International Seabed Authority would have been given the unprecedented power to redistribute wealth on an international scale. The United States cannot and will not agree to turn over the management of the resources of the oceans and other largely unexplored frontiers to large, inefficient international bureaucracies."
The American Mining Congress believed that a satisfactory investment climate could be created, and the basic conditions met by building on the existing Public Law 96-283, the Deep Seabed Hard Mineral Resources Act.9
This led to the signing (including the U.S.) of the Agreement Relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea on 28 July 1994.
The 1994 Agreement satisfied the objections of the United States (Subject to Senate approval) and the other industrialized states to the Part XI provisions of the Law of the Sea Convention. The International Seabed Authority was streamlined, and its regulatory discretion was curtailed. Substantial reductions were made in the financial obligations of states and private companies.
Conclusion
Regarding prospecting and exploration, the Draft Regulations on Prospecting and Exploration for Polymetallic Nodules in the Area address all the reservations expressed by concerned bodies.
The exploitation of the resources is not yet fully addressed; however, such a code for exploitation was difficult to draft at such an early stage of an industry that had no practical experience.
The implications of the Code for the future of the Industry are not detrimental. The Code addresses all practical questions that could be raised by a practitioner regarding any new mining venture. When compared to other codes of terrestrial mining regulations10, it compares favorably the obvious differences regarding a marine environment taken into consideration.
Regulations are an "authoritative direction", and in the case of Mining Regulations they are the detailed set of rules and penalties laid down by an Authority to enable the practitioner of the Mining Industry, or in this case, the Deep Seabed branch of the Mining Industry, to operate efficiently, safely, responsibly and within the law.
The prospector, explorer and miner need the regulations to guide them in the understanding of actual responsibilities and obligations, and to substantiate and explicate their rights. This Code accomplishes that.
The future of the Industry is affected now, not by the UNCLOS or the ISBA, but by competition from terrestrial mining sources, technology and market forces. An example of this is lateritic nickel, where less than a decade ago, it was uneconomical to extract, metallurgically. Today, with new technology, it is a major source of the world's nickel, which is predicted to overshadow sulfide nickel sources.
The sheer scale of launching a deep seabed mining venture is such that it is unlikely that corporations could consider any commitment without the subsidies of governments. In fact, the ISBA now insists on sponsorship from governments before it approves licence applications. If an operation were to commence at a grass-roots level today, and the areas of consideration were prospective, it would be unlikely that production would commence for 10 to 15 years, with detailed exploration continuing for an additional 10 to 15 years11.
Charney, J.L.12, quotes from another source:
"There is scant likelihood of early deep seabed mining for minerals. Recent economic conditions and the use of substitutes have depressed demand for minerals, while alternative, cheaper land-based sources of some nodule minerals have been identified. The market will probably not make deep seabed mining economically viable before 2025, or even much later than that."
Charney adds "if ever." Charney, however, is talking about exploitation, not exploration. Exploration will probably proceed. Plans of work are already being issued in the form of contracts to the seven entities from China, France, India, Japan, the Republic of Korea, the Russian Federation and a consortium of East European Countries. There is a notable absence, however, of the United States as one of these pioneer investors.
If these seven entities are serious and have the wherewithal, there may be a possibility. However, one can't help suspecting that for a US$250,000 insurance premium, they can hold the best-known deep seabed addresses, in case the economic conditions eventually do favor deep seabed mining. Perhaps it is not such a bad investment.
Whatever the future, the Agreement Relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea will have as much relevance in the Author's lifetime as the United Nations: - Agreement Concerning the Activities of States on the Moon and Other Celestial Bodies13.
If planning a Deep Seabed Mining project, Hale Legal's in-house team can assist in ensuring that all regulatory procedures are followed.
1 This article is an excerpt from a paper delivered by the author.
2 Resolution 2749 (XXV) of 17 December 1970 by the General Assembly of the United Nations declared that: "the area of the sea-bed and ocean floor and the subsoil thereof, beyond the limits of national jurisdiction, as well as its resources, are the common heritage of mankind, the exploration and exploitation of which shall be carried out for the benefit of mankind as a whole, irrespective of the geographical location of States." The subsequent Part XI, Article 136 of UNCLOS III, 1982, declared the same.
3 "Area" means the seabed and ocean floor and subsoil thereof beyond the limits of national jurisdiction.
4 Nautical mile (1.852 kilometers). Therefore, 200 nautical miles = 370.4 kilometers.
5 In 1945, President Truman claimed for the US, ownership of the resources of the seabed adjacent to the American coast, and this was followed by similar claims by many other coastal States. These claims, coupled by the belief that they were permissible in International Law, providing the basis of a customary rule, recognizing coastal State's ownership of continental shelf resources, which emerged by the late 1950s.
6 Resolution 2574D (XXIV) of 15 December 1969.
7 Resolution 2749 (XXV) of 17 December 1970.
8 Assistant Secretary of State for Oceans and International Environment and Scientific Affairs, Special Representative of the President for Law of the Sea: Chairman, United States Delegation to UNCLOS III.
9 US Deep Seabed Hard Minerals Resources Act, 30 USC 1401 (Supp IV 1980).
10 The Author compared the Code with the Western Australia Mines Regulation Amendment Act, No.85 of 1990.
11 Roberts, C., Offshore Mining, Lecture Notes, Western Australian School of Mines, Curtin University of Technology, Kalgoorlie, (1991).
12 A quote by Charney of researchers at the Woods Hole Oceanographic Institute Marine Policy Centre, in Charney, J.I., U.S. Provisional Application of the 1994 Deep Seabed Agreement, (1994) 88 AJIL 705.
13 United Nations: - Agreement Concerning the Activities of States on the Moon and Other Celestial Bodies, 18 ILM 1434, (1979).