further seaward, to be used for international community purposes, es-
pecially for the benefit of developing nations [Art. 27(b)].
V. HIGH SEAS
Negotiating Text
"High seas" is deemed to encompass all parts of the sea
that are not included in the exclusive economic zone, territorial sea,
or internal waters of a State [Art. 73]. All States have the right for
their nationals to engage in fishing on the high seas subject to 1) their
treaty obligations and 2) the rights and duties of coastal State as defined
in provisions relating to the exclusive economic zone [Art. 103]. In
addition, all States have the duty to adopt, or to cooperate with other States
in adopting, measures for their nationals as may be necessary for the
conservation of the living resources of the high seas. States whose na-
tionals exploit identical resources, or different resources in the same
1517
CRS-20
area, are to enter into negotiations to adopt the necessary means for
conserving the living resources concerned [Arts. 104-105]. In deter-
mining the allowable catch and other conservation measures for the liv-
ing resources of the high seas. States are to maintain and restore har-
vested species at levels which can produce the maxim sustainable yield,
consider the effects upon species associated with or dependent upon har-
vested species, contribute and exchange relevant scientific information,
and insure that conservation measures and their implementation do not
discriminate against the fishermen of any State [Art. 106].
United States Position
States are to cooperate with each other in the exploitation
and conservation of living resources in areas beyond the economic zone
of coastal States. Where States are exploiting identical resources, or
different resources located in the same area, they shall enter into fish-
eries management agreements and establish appropriate multilateral fish-
eries organizations. States, acting individually and through regional and
international fisheries organizations, are to establish allowable catch and
other conservation measures in order to maintain or restore harvested
species at levels which can produce the maximum sustainable yield, tak-
ing into account relevant environmental and economic factors and any
generally agreed global or regional minimum standards. States are also
1518
CRS-21
to take account of the effect which conservation measures have on spec-
ies associated with or dependent upon harvested species, exchange rele-
vant scientific data for this purpose, and ensure that conservation mea-
sures and their implementation are nondiscriminatory [United States Draft
Article For A Chapter on the High Seas Living Resources, United Nations,
Third Conference on the Law of the Sea, doc. A/Conf. 62/C. 2/L. 80,
23 August 1974]. / ",
D avid M. Sale
Legislative Attorney
American Law Division
August 15, 1975
1519
MINING RIGHTS IN THE
DEEP SEABED
Northcutt Ely*
Presented Before the American Mining Congress
San Francisco, California
OCTOBER 1. 1975
Of the Law Offices of Northcutt Ely. Washington. D. C.
1520
MINING RIGHTS IN THE DEEP SEABED
Northcutt Ely*
Presented before the
American Mining Congress
San Francisco, California
October 1, 1975
*Of the Law Offices of Northcutt Ely, Washington, D.C.
1521
MINING RIGHTS IN THE DEEP SEABED
Page
Introduction 1
1. The nature of the resource
2. The significance of seabed hard minerals to the United States
10
3. The legal and political prerequisites for a successful ocean
mining industry 15
4. The Deepsea Ventures claim 19
5. Mining rights in the deep seabed under existing international
law 24
6. How deep seabed mining would be affected by pending treaty
proposals 34
7. "Interim arrangements'
SO
1522
MINING RIGHTS IN THE DEEP SEABED
Northcutt Ely*
Introduction
The subject of this discussion is the international law applicable to
the acquisition and enjoyment of rights to mine the minerals of the deep
seabed beyond the limits of national jurisdiction. — The discussion is keyed
to a claim filed in November 1974 with the State Department by Deepsea
Ventures, Inc. , giving notice of discovery of a deposit of manganese nodules
*Mr. Ely wishes to acknowledge the valued assistance of his associate,
Robert F. Pietrowski, Jr.
1_/ By the expression "limits of national jurisdiction" is meant the geographical
limit of the exclusive sovereign rights of coastal States to govern the explora-
tion and exploitation of the mineral resources of the seabed and subsoil in areas
adjacent to their coasts. This sort of jurisdiction extends beyond the limits of
the territorial sea. Under existing conventional and customary law, these
limits, in the author's opinion, are coextensive with the geomorphic features
of the continental margin abutting the particular State's coast, i. e. , the con-
tinental shelf, continental slope, and a "grey area" encompassing the portion
of the continental rise landward of the junction between the rocks of the con-
tinent and those of the abyssal ocean floor. This corresponds with the concept
of "prolongation of the land territories" of the coastal State articulated by the
International Court of Justice in the North Sea Continental Shelf Cases, /T9697
I.C. J. 3. Under some of the proposals now current in the Law of the Sea nego-
tiations, the corresponding limits of national jurisdiction would be the seaward
limits of the continental margin (not yet specifically defined), or 200 nautical
miles from the baseline from which the breadth of the territorial sea is meas-
ured. Some proposals would encompass whichever of these two areas is
greater. For purposes of the present discussion, it makes no difference what
the limits of national seabed jurisdiction are taken to be, because the seabed
resource in question is assumed, by hypothesis, to be seaward of all such limits.
1523
within stated coordinates in the deep seabed of the Pacific beyond the limits
of national jurisdiction of any State, and asking diplomatic protection.-' The
issues discussed, however, are of general application.
The presentation will be in the following order:
(i) The nature of the resource;
(ii) The significance of seabed hard minerals to the United States;
(iii) The availability of the resource under present international law, with
particular reference to the procedure followed in the case of Deepsea Ventures'
discovery;
(iv) The current Law of the Sea negotiations, and the potential effect of a
treaty on the availability of minerals from the deep seabed.
(v) Finally, an evaluation of alternatives to a general Law of the Sea treaty.
When we talk about seabed mining, we are dealing with the latest in the
evolution of a very long history of relationships between consumers, govern-
ments, landowners and miners. In 1912, Herbert Hoover and his wife, Lou
Henry Hoover, translated Agricola's classic mining law treatise, De Re Metal-
lica, 1/ into English. Mr. Hoover added a footnote of his own, observing:
2/ The writer participated in the preparation and filing of that notice, and
7endered an opinion to Deepsea Ventures November 14, 1974, which accom-
panied it, and was made public. This paper, in all other respects, states
the author's personal views, and no client is responsible for them.
3/ Agricola, De Re Metallica 8% n. 6 (H. 8t L. H. Hoover tranel. 1912).
1524
"There is no branch of the law of property, of which
the development is more interesting and illuminating from
a social point of view than that relating to minerals. Unlike
the land, the minerals have ever been regarded as a sort of
fortuitous property, for the title of which there have been
four principal claimants - -that is, the Overlord, as repre-
sented by the King, Prince, Bishop, or what not; the Community
or the State, as distinguished from the Ruler; the Landowner;
and the Mine Operator, to which class belongs the Discoverer.
The one of these that possessed the dominant right reflects vividly
the social state and sentiment of the period. The Divine Right
of Kings; the measure of freedom of their subjects; the tyranny
of the land-owning class; the rights of the Community as opposed
to its individual members; the rise of individualism; and finally,
the modern return to more communal view, have all been reflected
promptly in the mineral title. Of these parties the claims of the
Overlord have been limited only by the resistance of his subjects;
those of the State limited by the landlord; those of the landlord by
the Sovereign or by the State; while the miner, ever in a minority
in influence as well as in numbers, has been buffeted from pillar
to post, his only protection being the fact that all other parties
depended upon his exertion and skill. " (Emphasis added.)
While the miner's position on land, vis-a-vis the overlord, the State, and
the landlord, has changed very little since Mr. Hoover wrote that passage,
when the miner goes beneath the sea and beyond the territorial jurisdiction of
a State, he encounters a new set of forces. One is the amorphous but formid-
able jellyfish consisting of the general body of international law. The other is
a ravenous shark attracted by the miner's first tentative undersea movements.
It might aptly bear the sobriquet of "Jaws," but is known more formally as the
International Seabed Resource Authority, now being structured, not in Holly-
wood, but in another never-never land.
1525
1 . The nature of the resource
We are talking here primarily about manganese nodules, and sec-
ondarily about hydrocarbons.
A. Manganese nodules
Manganese nodules, as we all think we know, are strange potato-shaped
concretions of metal oxides, primarily manganese, silica, iron, copper,
cobalt, and nickel. They range in size from marbles up to grapefruit.
When sliced through the center, they resemble gallstones, in that a
large number of thin concentric shells are seen to have been deposited
around a central nucleus of some quite different material, often a grain of
sand or a piece of shell. They lie on the surface of the seabed in popula-
tions of varying density, covering as much as 60 percent of the area in
some deposits. These deposits are scattered over literally thousands
of square miles of the seabed in the Pacific, Indian, and some other
oceans, usually in very deep water. Depths of the order of 15, 000 feet are
not uncommon. The total quantity of seabed nodules has been estimated, on
a very approximate basis, to be in the trillions of tons. There seems to be
a tendency for these populations to be most dense in the vicinity of sea
mounts, which are like isolated mountain peaks that do not reach the surface.
As to why and how the nodules were formed, I have yet to hear an expert
1526
- 5 -
give an explanation that, as a layman, I could understand and believe,
or that his fellow experts would applaud.
Two things do seem to be proved, however. The first is that
technology now exists to harvest the nodules and raise them vertically
through several miles of water to ships on the surface. The second is
that technology now exists to refine the nodules and separate out the metals
that they contain, primarily as on-shore operations. In both respects the
techniques are proprietary. They have been developed by American com-
panies, several of which now have foreign companies as associates in
one relationship or another.
Some nodules contain a score or more metals, but those of pri-
mary importance to the American economy are manganese, copper,
nickel, and cobalt. I will come to their degree of importance in a moment.
Some features of the production problem need to be identified more
specifically before we discuss the legal problems that they generate.
Item: The legal problem is not how to police a gold rush, where
competitors can be expected to try to jump each other's claims. Quite
the contrary. The topography of the seabed is such that, after discovery of
a promising mine site, prolonged, detailed mapping, by very sophisticated
methods is necessary before the mining equipment can be designed for
that particular area. One must know what the gradients are, where the
canyons are located, what obstacles must be avoided, what weight the
underlying ooze will support, what distribution of weight is required, what
1527
- 6 -
kind of force is to be applied from the surface, how the harvesting
mechanism can best be guided, how the surface vessel is to be kept in
position, what kinds of accidents to seabed equipment and lifting mechan-
isms must be provided against, and so on.
Item: The metallurgical problems involved in refining nodules
of different deposits located only a few hundred miles apart may differ
so completely as to render the refining process that is developed for the
one uneconomical for the other. Huge investments are required. The
production equipment for a single deposit, at present prices, may coit
$200 million to $300 million. The specialized refining for that deposit
may cost another $150 million.
The last thing in the world that an investor wants is to discover
that he has been spending his money on a deposit that someone else claims,
when there are plenty of free areas available. What he does need is public
disclosure of the location of all claims, not so that he can go there and
poach, but so that he can avoid those areas. Conversely, he needs a system
that will give him protection for a discovery, so that others will not inadver-
tently invade it. I use the word inadvertently deliberately, for the reasons
I have stated.
Moreover, the cost of these operations is such that less than a dozen
will probably be operational within the next decade and a half. In the nature
of things, they will be widely scattered.
There is no urgent international administrative problem.
1528
Another comment or two, before we leave the physical problem.
The first is as to size and duration and productivity of the operation.
It seems to be generally agreed, by those who are spending their money on
research, that the economic size of each operation will be geared to the
gathering of up to three million tons of nodules per year, and that the
commercial operation should continue for some 40 years. This, related
to average population densities, requires a production area of some 30,000
square kilometers, and, in turn, a preliminary exploration area of about
60,000 square kilometers.
The second relates to environmental impact. As the nodules lie on
the surface of the seabed, the gathering operation is not at all like an
open pit copper mine. When the nodules are all scooped up, the seabed
will look much as it did before. From an environmental viewpoint, it would
seem a good deal better to mine copper from the deep seabed in this tem-
porary scraping operation, thousands of miles from shore, than from an
open pit in Montana or Arizona, which will be a permanent new feature of
the landscape.
The third comment relates to timing. We are assured that the
technology of nodule recovery and refining has progressed to the point
where capital is available in the amounts required to finance the costly
mapping, exploration and evaluation of the sites already discovered, and
construction of preliminary pilot-plant refinery operation. Most of the
1529
first stages can be commenced in a matter of months, to be followed by
full-scale operations in a few years. The hurdles are not technological,
but legal, as we shall see.
B. Hydrocarbons
Hydrocarbons, we have been taught, occur in sedimentary deposits.
The submarine reservoirs, we have also been told, are situated primarily
on the margins of the continents and in the beds of the marginal or semi-
enclosed seas of the world. These are the areas which are or will become
subject to exclusive coastal State authority, and are therefore excluded from
our present inquiry.
But the reports of the National Petroleum Council— indicate the
probable existence of some important hydrocarbon deposits in the areas
seaward of national jurisdiction. It is reported that the technology for
finding and producing oil in some parts of the ocean depths up to 3,000
feet is in an advanced state of development, and will probably be ready
for use in the mid-80' s. The deep sea jurisdictional problem with respect
to hydrocarbons is less pressing than it is with respect to hard minerals
only because the continental margins, in which the jurisdictional issue is
almost completely resolved in favor of the coastal State, are much more
attractive from the viewpoint of cost than is the deep seabed. Thus it can
be said that the petroleum industry has an interest in resolving the deep
4/ E. g. , National Petroleum Council, Ocean Petroleum Resources, Fig. 1,
Table 4, p. 19 (1975).
1530
- 9 -
seabed jur Lsdictional problem whLch is parallel with that of the hard
mineral industry, but which is less urgent, for the reasons that I have
stated. Accordingly, the present discussion will deal mainly with
hard minerals.
1531
2. The significance of seabed hard minerals to the United States
At the present time, the United States is dependent on foreign sources
for 95 percent of its manganese, 74 percent of its nickel, 20 percent of its
copper, and 98 percent of its cobalt requirements. In 1974, imports of these
four minerals alone contributed 900 million dollars to the U.S. balance of
payments deficit.
Domestic demand for manganese, nickel, copper, and cobalt is fore-
cast to increase at annual compound rates of 2 percent, 3 percent, 3. 5 percent,
and 2. 6 percent, respectively, through 1980, indicating a doubling of demand
in about one generation. Since domestic reserves of these minerals are already
inadequate to meet U.S. demand (indeed, the United States has no manganese
reserves), this increased demand will have to be met by supplies originating
outside of the United States. But the world demand is also increasing, and is
expected to treble by the end of this century.
Nothwithstanding this projected increase in demand, the U.S. Depart-
ment of the Interior has estimated that by a date as early as 1990 the United
States can be self-sufficient in nickel, copper, and cobalt, and can reduce
imports of manganese to 23 percent of consumption, provided that American
companies go forward with their deep sea mining operations now.
On the other hand, if American companies are unable to proceed with
their deep sea mining operations, and the United States continues to be depen-
dent on foreign sources for manganese, nickel, copper, and cobalt, the economic
welfare and national security of the United States will be in jeopardy. As we
1532
- n -
shall see, the obstacles which stand In the way of substantial American self-
sufficiency in these minerals are not found in the existing law of the sea,
but in the threat of creation of a new international regime which will throttle
this infant industry before it leaves the cradle.
The importance of these minerals to the United States is manifest.
Manganese, nickel, and cobalt are important in the manufacture of steel;
copper is a basic industrial metal. There are no satisfactory substitutes for
manganese or nickel in their primary uses. Nickel is the only satisfactory
substitute for cobalt. Substitutes exist for some, but not all, uses of copper.
The dangers inherent in our present supply deficits for these minerals
are also obvious. We should have learned from the OPEC experience. But
the same arguments that were used in 1970 to support the contention that
OPEC would never be an effective cartel -5' are being put forth today to support
the proposition that the hard mineral exporting nations will never be able to
effectively control prices and production.
Production and reserves of manganese, nickel, copper and cobalt are
concentrated in even fewer countries than are production and reserves of
petroleum. Five nations control 99 percent of the/free world's manganese
reserves; two nations control 66 percent of the free world's nickel reserves;
Si See, e. g . , The Oil Import Question: A report on the relationship of oil
imports to the national security by the Cabinet Task Force on Oil Import
Control, para. 204(c), p. 21 (Feb. 1970); Charles River Associates, An
Analysis of the United States Oil Import Quota 95 (1970).
1533
- 12 -
six nations control 75 percent of the free world's copper reserves; and
five nations control 99 percent of the free world's cobalt reserves.—
And, as in the case of petroleum, increased world demand and competition
among buyers has eroded the bargaining power of the buyers relative to that
of the mineral exporting governments. Moreover, the very nations which
presently supply the U.S. hard minerals deficit have repeatedly expressed
their intentions to maximize revenues from mineral exports.
At its 29th session, the United Nations General Assembly adopted a
7/
resolution entitled, "The Charter of Economic Rights and Duties of States."
Article 5 of this resolution provides:
"All States have the right to associate in organizations
of primary commodity producers in order to develop their nation-
al economies, to achieve stable financing for their development
and, in pursuance of their aims, to assist in the promotion of sus-
tained growth of the world economy, in particular accelerating
the development of developing countries. Correspondingly all
States have the duty to respect that right by refraining from apply-
ing economic and political measures that would limit it. "
Thus, the resolution asserts (1) a positive right to form commodity
cartels, and (2) a correlative duty not to resist the objectives of such cartels.
Other of the resolution's provisions make clear that the right asserted in
Article 5 is intended to attach only to the developing countries, while the duty
asserted in that article is meant to bind the developed nations. For example,
6_/ U.S. Department of the Interior, Commodity Data Summaries 1975 (1975).
7/A/RES/3281 (XXDC) (January 15, 1975).
1534
Article 14 provides in part:
". . . States shall take measures aimed at securing additional
benefits for the international trade of developing countries so
as to achieve a substantial increase in their foreign exchange
earnings, the diversification of their exports, the acceleration
of the rate of growth of their trade, taking into account their
development needs, an improvement in the possibilities for
these countries to participate in the expansion of world trade
and a balance more favourable to developing countries in the
sharing of the advantages resulting from this expansion, through,
in the largest possible measure, a substantial improvement in
the conditions of access for the products of interest to the develop-
ing countries and, wherever appropriate, measures designed to
attain stable, equitable and remunerative prices for primary pro-
ducts. "
Article 24 provides:
"All States have the duty to conduct their mutual economic
relations in a manner which takes into account the interests of
other countries. In particular, all States should avoid prejudic-
ing the interests of developing countries."
And Article 28 provides:
"All States have the duty to co-operate in achieving adjust-
ments in the prices of exports of developing countries in relation
to prices of their imports so as to promote just and equitable terms
of trade for them, in a manner which is remunerative for producers
and equitable for producers and consumers."
The Charter of Economic Rights and Duties of States is important here
because it articulates the aspirations of the mineral exporting nations. Of
8/
the nine countries — which presently supply more than 90 percent of U.S. im-
ports of manganese, nickel, copper, and cobalt, not one joined with the United
States to vote against the resolution. In general, these nations, like the OPEC
_8/ Brazil, Canada, Chile, Finland, Gabon, Norway, Peru, South Africa, and
Zaire.
1535
- 14 -
nations, seek absolute control ( i. e. , free from any meaningful contract restric-
tions) over the production and prices of their commodities. This point of view,
while understandable, is nevertheless inimical to United States interests. Its
prevalence among the mineral exporting nations of the world underscores the
need for American companies to begin deep sea mining operations as soon as
possible.
1536
3. The legal and political prerequisites to a successful ocean
mining industry
If deepsea mining production and refining technology has reached the