DEEP SEABED HARD MINERALS

TUESDAY, FEBRUARY 26, 1974

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON OCEANOGRAPHY OF THE

COMMITTEE ON MERCHANT MARINE AND FISHERIES,

Washington, D.C. The subcommittee met, pursuant to call, at 10:12 a.m., in room 1334, Longworth Office Building, Hon. Thomas N. Downing, chairman, presiding.

Mr. DOWNING. The Subcommittee will come to order.

Today, the Subcommittee on Oceanography is beginning the third, and what I sincerely hope will be the last, of a series of hearings concerning the orderly development of the hard mineral resources. of the deep ocean floor.

This subject was first actively considered in May 1972, in the Second Session of the 92nd Congress. Those hearings were held on H.R. 13076, H.R. 13904, and H.R. 14918, identical bills which would provide the Secretary of the Interior with authority to promote the conservation and orderly development of the hard mineral resources of the deep seabed, pending adoption of an international regime therefor.

The purpose of the bills was to permit domestic miners, ship designers, engineers and chemists to continue to apply their energy, capability and capital to potentially beneficial marine projects such as the mining of manganese nodules and other oceanic hard minerals. Such projects involve the application of technology in a highly hostile natural environment many miles from the nearest land and and at depths up to four miles.

The risks involved relate to the ocean environment, as well as to the additional risks attendant upon the world metal market.

There is, however, an additional risk which the legislation was primarily concerned with, and that risk involves the early security of a miner's expectation as to the ore body in which he is interested.

There is a need, therefore, to establish appropriate protection from unreasonable interference for the investment and operations related to mineral recovery activity.

Since, for various reasons, no action on the legislation was taken in the 92nd Congress, I reintroduced the same legislation as H.R. 9 in the First Session of the present Congress. A similar action was taken in the other body.

Again, the Subcommittee held a series of hearings, and again we were faced with Administration testimony which discouraged favorable action on the bill.

In contrast to the hearings in the 92nd Congress, in which the Administration witnesses did not take a position on the legislation, Mr. Charles Brower, Acting Legal Advisor of the Department of State, representing the Administration, opposed H. R. 9 as premature. At the same time, he stated that the Administration adhered to the policy contained in the President's Ocean Policy Statement of May 23, 1970, in which the President proposed that all nations. adopt, as soon as possible, a treaty establishing an international regime for the exploitation of seabed resources beyond the 200 meter depth.

In addition, he reiterated the President's statement that it is neither necessary nor desirable to try to halt exploration and exploitation of the seabeds during the negotiation process, provided that such activities are subject to the international regime to be agreed upon, which should include due protection of the integrity of investments made in the interim period.

Finally, he stated that while the Administration intended to begin at once to formulate a legislative approach on a contingency basis, the Administration did not seek the passage of alternative legislation prior to the conclusion of the Conference, if a timely and successful Conference is predictable.

He defined a "timely and successful Conference" to mean a Conference which would arrive at a Convention, including a seabed regime, which would be open for signature in 1974 or, at the latest, not later than the summer of 1975.

Again the Subcommittee leaned over backwards in not pressing action on the legislation in order to await the final report of the United Nations Seabed Committee and the initiation of the Law of the Sea Conference.

And so we come to the bill before us today.

Taking the Administration at its word, this new version of the "Deep Seabed Hard Minerals Act" has introduced a new feature which, among others, was designed to resolve at least one difficulty with the previous versions. I refer specifically to the provision in section 5(b) of the bill, which states that "in no event shall any license issued under this Act authorize the commercial recovery of such resources prior to January 1, 1976," and provides further that "except to the extent that such licenses are authorized pursuant to the provisions of an international agreement . . . no license shall be issued under this Act subsequent to the ratification by the United States of any such international agreement."

There are other significant changes in the present bill to the provisions of H. R. 9, which was the subject of hearings in the First Session of this Congress.

Today, we have invited the Administration to testify on this new bill.

As I stated to Mr. Brower at the beginning of the hearings last year, I hope that the Administration comments today will not consist merely of suggestions for further delay in action on the proposed legislation. I hope that constructive discussion will be offered on the specific provisions of the bill and that those departments

who have been invited to testify will address comments to the technical details of the proposed legislation affecting their areas of authority.

Prior to calling the first witness, I would like to ask unanimous consent to insert at this point in the record a statement which I made on the floor of the House of Representatives on December 20, 1973, in relation to this proposed legislation, as well as a Wall Street Journal editorial, dated December 17, 1973.

These will be made a part of the record at this point, along with a copy of the new bill, H. R. 12233.

(The documents referred to follows.)

[H.R. 12233, 93d Cong., 2d Sess.]

A BILL To promote the conservation and orderly development of hard mineral resources of the deep seabed, pending adoption of an international regime relating thereto Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Deep Seabed Hard Minerals Act".

DECLARATION OF POLICY

SEC. 2 (a) FINDINGS.-The Congress finds

(1) that the Nation's hard mineral resource requirements will continue to expand in order to supply national industrial needs and that the demand for certain hard minerals will increasingly exceed available domestic sources of supply;

(2) that, in the case of some minerals, the Nation is totally dependent upon foreign sources of supply and that the acquisition of mineral resources from foreign sources is a substantial factor in the national balance-ofpayments position;

(3) that the national security interests of the United States require the availability of mineral resources which are independent of the export policies of foreign nations;

(4) that there is an alternate source of supply of certain minerals which are significant in relation to national needs contained in the manganese nodules which exist in great abundance on the ocean floor;

(5) that, to the extent that such nodules are located outside the territorial limits and beyond the Continental Shelf of any nation, the nodules are available for utilization by any nation with the ability to develop them;

(6) that United States mining companies have developed the technology necessary for the development and processing of deep seabed nodules and, given the necessary security of tenure, are prepared to make the necessary capital investment for such development and processing; and

(7) that it is in the national interest of the United States to utilize existing technology and capabilities of United States mining companies by providing for interim legislation which will encourage further efforts to insure national access to available deep seabed hard minerals and to provide the means whereby the national program may be merged into an international program which evolves from negotiations on the Law of the Sea and is subsequently ratified by the United States.

(b) PURPOSES.-The Congress declares that the purposes of this Act are

(1) to establish a national program to insure the orderly development of certain hard mineral resources of the deep seabed, pending the establishment of an international regime for that purpose; and

(2) to insure the establishment of all practicable requirement necessary to maintain and enhance the quality of the marine environment to the extent that that environment may be affected by deep seabed hard mineral mining development.

DEFINITIONS

SEC. 3. For the purposes of this Act—

(a) "Secretary" means, except where its usage indicates otherwise, the Secretary of the Interior;

(b) "deep seabed" means the seabed, and the subsoil thereof, lying seaward and outside the Continental Shelf of any nation;

(c) "Continental Shelf" refers to the seabed and subsoil of the submarine areas adjacent to the cost of any nation (including the coasts of Islands), but outside the area of the territorial sea, to a depth of two hundred meters or, beyond that limit, to where the depth of the superjacent waters admits of the exploitation of the natural resources of the said areas;

(d) "block" means an area of the deep seabed having four boundary lines which are lines of longitude and latitude, the width of which may not be less than one-sixth the length, comprising not more than forty thousand square kilometers, and extending downward from the seabed to a depth of ten meters;

(e) "hard mineral" or "hard mineral resources" refers to nodules or accretions containing, but not limited to, iron, manganese, nickel, cobalt, and copper;

(f) "development" means any operation of exploration and commercial recovery, other than prospecting, having the purpose of discovery, recovery, or delivery of hard minerals from the deep seabed;

(g) "prospecting" means any operation conducted for the purpose of making geophysical or geochemical measurements, bottom sampling, or comparable activities so long as such operation is carried on in a manner that does not significantly alter the surface or subsurface of the deep seabed;

(h) "person" includes private individuals, associations, corporations, or other entities, and any officer, employee, agent, department, agency, or instrumentality of the Federal Govrnment, of any State or local unit of government, or of any foreign government;

(i) "eligible applicant" means a citizen of the United States or a corporation or other juridical entity organized under the laws of the United States, or its States, territories, or possessions, and possessing such technical and financial capabilities as may be prescribed by the Secretary in order to assure effective and orderly development of hard mineral resources pursuant to a license issued under this Act;

(j) "investment" includes any contribution of funds, commodities, services, patents, processes, or techniques in the form of (1) a loan or loans, (2) the purchase of a share or shares of ownership, (3) participation in royalties, earnings, or profits, and (4) the furnishing of commodities or services pursuant to a lease or other contract;

(k) "exploration" means that activity involving observation and evaluation, following the location and selection of a hard mineral deposit of potential economic interest, which has, as its objective, the establishment and documentation of the nature, shape, concentration, and tenor of an ore deposit, and the nature of the environment factors which will affect its susceptibility of being developed, including the sampling of the deposit necessary for the design, fabrication, installation, and testing of equipment, and the development of recovery techniques; and

(1) "commercial recovery" means that activity following exploration, which has, as its immediate objective, the removal or conversion of ores from the selected hard mineral deposit at a substantial rate (without regard to profit or loss), for the primary purpose of processing the ore for marketing or commercial use.

ACTIVITIES PROHIBITED

SEC. 4. (a) Except as authorized pursuant to the provisions of this Act, including subsection (b) hereof, or as may be authorized under a treaty, convention, or other international agreement. which is ratified by the United States, no person subject to the jurisdiction of the United States shall engage directly or indirectly in the development of hard mineral resources of the deep seabed. The prohibition of this subsection does not apply to prospecting or scientific research.

(b) In any case in which an eligible applicant is already engaged in the exploration of a block, on the date on which this Act takes effect, that eligible applicant may file an application for a license to develop that block and may continue any exploration activities until such time as the Secretary acts upon the application, with any activity subsequent to the action of the Secretary to be determined by the decision of the Secretary under the provisions of section 5 hereof.

LICENSE TO DEVELOP

SEC. 5 (a) GENERAL.-Pursuant to the provisions of this Act, the Secretary shall accept applications from, and issue licenses to, eligible applicants for the development of hard mineral resources of the deep seabed. Any license issued pursuant to this section shall be issued to the first eligible applicant who makes written application therefor, and tenders a fee of $50,000 for the block specified in the application and available for licensing. Such fee shall be deposited into an appropriate fund to be established by the Secretary, which fund shall be utilized for administrative and other costs incurred in the processing of applications for licenses under this Act. No such license may be issued until the Secretary determines

(1) that the applicant is financially responsible and has demonstrated the ability to comply with applicable laws, regulations, and license conditions;

(2) that the operations under the license will not unreasonably interfere with other reasonable uses of the high seas, as defined by any treaty or convention to which the United States is signatory, or by customary international law;

(3) that the issuance of a license does not conflict with any obligations of the United States, established by treaty or other international agreement; and

(4) that operations under the license will not pose an unreasonable threat to the integrity of the marine environment and that all reasonable precautions will be taken to minimize any adverse impact on that environment.

(b) NATURE AND DURATION OF LICENSE.-(1) Any license issued pursuant to this Act shall be exclusive as against all persons subject to the jurisdiction of the United States, and shall authorize development of the hard mineral resources of the deep seabed for specified blocks thereof, pending adoption, and ratification by the United States, of an international agreement covering the same activity: Provided, That in no event shall any license issued under this Act authorize the commercial recovery of such resources prior to January 1, 1976: And provided further, That, except to the extent that such licenses are authorized pursuant to the provisions of an international agreement establishing a regime for the development of mineral resources of the international seabed area beyond the limits of coastal State territorial or resourc jurisdiction, no licenses shall be issued under this Act subsequent to the ratification by the United States of any such international agreement.

(2) Priority of right for the issuance of a license shall be created and maintained by receipt by the Secretary of a license application from an eligible applicant: Provided, That the application is submitted in conformity with the provisions of this Act and the regulations promulgated by the Secretary pursuant to section 6 hereof.

(3) An application, submitted in accordance with subsection (b) of section 4 hereof and prior to the effective date of the regulations promulgated pursuant to section 6 of this Act, shall be entitled to priority of right as established in paragraph (2) of this subsection: Provided, That the eligible applicant complies with the provisions of this Act, including, but not limited to, the tender of the fee required by section 5, the furnishing of information required by subsection (b) of section 6, and the minimum expenditures required by section 8: Provided further, That the eligible applicant brings his application and his other activities into compliance with all applicable regulations issued by the Secretary, as soon as such regulations become effective.

(4) Every license issued under this Act shall remain in force for ten years and, where commercial recovery of the hard mineral resources has begun from a licensed block within the ten-year period, such license shall remain in force for as long as commercial recovery from the block continues or until the end of the twentieth year subsequent to the beginning of the commercial recovery, whichever occurs first.