Revision of U.S. ratification of UNCLOS key to development of deep seabed mining industry from Wed, 03/23/2022 - 21:55
The development of deep seabed claims is incredibly expensive. Companies in the U.S. are reluctant to invest heavily in deep seabed mining because of the risk that their activities would not withstand a legal challenge since the U.S. is not a party to the Convention. Conversely, foreign companies, because their governments have joined the Convention, have access to the international bodies that grant the legal claims to operate in the deep seabed area. The U.S. cannot represent the interests of its companies in those bodies.
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Until a decade ago, the United States was 100 percent self-reliant for rare earth production, with domestic companies producing enough to supply U.S. manufacturers. Over time, however, U.S. production was halted as it became economically and environmentally cost prohibitive.
Companies in various countries – including the United States – are looking at reopening closed mines and developing new deposits, but these efforts could take a number of years to fully come on line.
The deep seabed offers a new opportunity for the United States to gain steady access to these vital rare earth minerals. Polymetallic nodules are located on the deep ocean floor. These nodules typically contain manganese, nickel, copper, cobalt and rare earth minerals. However, U.S. companies cannot actively pursue claims in the areas where these nodules are dense unless the U.S. ratifies the Law of the Sea Treaty.
The Law of the Sea Convention provides the only internationally recognized legal regime for extracting mineral resources from the ocean floor in the deep seabed, an area over which no country has sovereign rights. The International Seabed Authority (ISA) develops the rules, regulations and procedures relating to the deep seabed. The Convention guarantees the United States, and only the United States, a permanent seat on the decision-making Council of the ISA – with an effective veto over decisions impacting U.S. interests.
The development of deep seabed claims is incredibly expensive. Companies in the U.S. are reluctant to invest heavily in deep seabed mining because of the risk that their activities would not withstand a legal challenge since the U.S. is not a party to the Convention. Conversely, foreign companies, because their governments have joined the Convention, have access to the international bodies that grant the legal claims to operate in the deep seabed area. The U.S. cannot represent the interests of its companies in those bodies.
Lockheed Martin, for example, has two deep seabed claims that pre-date the Law of the Sea Convention. It has continued to extend its licenses through the National Oceanic and Atmospheric Administration (NOAA). These claims will be instantly recognized by the International Seabed Authority (ISA) if the U.S. joins the Convention. However, without the U.S. becoming a party to the Convention, Lockheed Martin is unable to secure U.S. sponsorship of these claims at the ISA.
At the same time, the Chinese are accelerating their own deep seabed mining efforts. They have increased government funding for seabed mining, and the government announced a $75 million national deep sea technology base in 2010. China is also expanding its engagement with the ISA, where it secured one of the four ISA exploration licenses issued in 2011. The Chinese can boast more than 20 years of sustained technical and political efforts to develop the deep seabed, funded by the government.
A close look at the map of claims in the Clarion Clipperton Zone (CCZ), a location in the Pacific Ocean that is rich with rare earths, shows active claims by China, Japan and Russia “planting their flags,” so to speak. Recently published reports have indicated that the Chinese are actively surveying other claim areas in the CCZ, including those of the U.S. Russia, Tonga and Nauru were also granted deep seabed mining licenses by the ISA last year. At last count, the ISA has 17 pending or completed applications for exploration – up from just eight in 2010.
Only ratification of the Law of the Sea Convention and engagement with the ISA will provide a sufficient mechanism to secure international recognition of U.S.-based claims and rights. Manufacturers and consumers will benefit from a more diverse and competitive market for rare earths, and deep seabed mining is an opportunity for the U.S. to quickly diversify its rare earth sources.
As it stands in the seabed resource market, there are approximately 12 mining claims involving 14 countries under the International Seabed Authority, an intergovernmental body established by the Law of the Sea Convention to have oversight of mineral-related activities in the international seabed. Lockheed Martin for years has had claims to explore and extract rare earth elements, which produce valuable metals used the world over in flat-screen televisions, electric hybrid batteries, tank armor, night-vision goggles and every mobile communications device.
“When you see an international, huge company like Lockheed who has got these claims, who has for years been trying to get access to them, that now may end up going to Lockheed Martin U.K. to get a site and operate through their U.K. operating unit, you have to ask why are American companies having to go to foreign governments to access deep seabed minerals when we as a country desperately need [this business]?”Pike said.
Jennifer Warren, vice president, technology policy and regulation at Lockheed Martin, discussed the com- pany’s history and interest in deep seabed exploration, which dates back more than 40 years. She said it has generated more than 80 patents and invested more than $500 million in exploration largely in the Clarion-Clipperton Zone that extends from Baja California to Hawaii.
“Recent developments in deep seabed resources have really sharpened our interest in seeing Law of the Sea ratified as soon as possible,” Warren said.
Lockheed, she said, has maintained its licenses to to explore and extract rare earth minerals, even as the market for minerals lagged. However, today, the demand has risen sharply for “rare earths,” as they are known, which produce valuable metals for flat-screen televisions, electric hybrid batteries, tank armor, night-vision goggles and cell phones.
Furthermore, Warren said, Lockheed’s claims now are the only current active U.S.-based claims. Last July, the first four licenses for deep seabed exploration were granted by the International Seabed Authority (ISA), the organization created by the Convention to recognize mining claims beyond the continental margin, and two of them are held by China and Russia, she said.
"The importance of these resources is well understood internationally,” Warren said, describing the need to be a party to the Law of the Sea Convention in order to be an active participant and have authorities in, for example, the rule-making process within the ISA. “Other countries are moving forward quickly and aggressively to access them. As the only U.S.-based claimant, our view is pretty straightforward. Business initiatives to exploit deep seabed mineral resources will only be able to secure the necessary financial investments if done pursuant to the existing international framework.”
With respect to our oil and gas and deep seabed mining industries, however, there are especially compelling reasons why the United States needs to promptly adhere to the Convention. Our oil and gas industry is simply unlikely to move forward in development of the continental margin of the United States in areas beyond 200 nautical miles until United States adherence solidifies the legal regime for them in such areas. And our deep seabed mining industry is now moribund, and will remain so, absent United States adherence to the Convention. The United States led the world toward development of the technology for the recovery of deep seabed minerals. Our industry collectively expended more than $200 million to identify and obtain international recognition for five prime mine sites. At present three of those sites lie abandoned and the other two are on hold with zero chance of activity absent United States adherence. The Congress should clearly understand that accepting the arguments of the critics and opposing moving forward with the Convention is to permanently put the innovative United States deep seabed mining industry out of business, and to accept a reality that only the firms of other nations will be able to mine the deep seabed.
Reclaiming United States deep seabed mineral sites now virtually abandoned. United States firms pioneered the technology for deep seabed mining and spent approximately $200 million in claiming four first-generation sites in the deep seabed for the mining of manganese nodules. These nodules contain attractive quantities of copper, nickel, cobalt and manganese and would be a major source of supply for the United States in these minerals. Paradoxically, 'protecting' our deep seabed industry has sometimes been a mantra for non-adherence to the Convention. Yet because of uncertainties resulting from U.S. non- adherence these sites have been virtually abandoned and most of our nascent deep seabed mining industry has disappeared. Moreover, it is clear that without U.S. adherence to the Convention our industry has absolutely no chance of being revived. I believe that as soon as the United States adheres to the Convention the Secretary of Commerce should set up a working group to assist the industry in reclaiming these sites. This working group might then recommend legislation that would deal with the industry problems in reducing costs associated with reacquiring and holding these sites until deep seabed mining becomes economically feasible;
Offshore oil and natural gas exploration along the extended continental shelf – an area beyond the 200-nautical-mile EEZ – is expected to increase U.S. reserves over the next decade. However, the United States cannot secure internationally recognized sovereign rights to those resources unless it ratifies LOSC. While the United States enjoys national jurisdiction over living and non-living resources above and below the seabed out to 200 nautical miles, claims to resources beyond the EEZ must be formally made to the U.N. Commission on the Limits of the Continental Shelf, the international body established by LOSC for parties to adjudicate claims to the extended continental shelf. Without the United States ratifying LOSC, U.S. companies operating beyond the EEZ would be considered on the high seas and beyond the formal legal protection of the United States. As a result, offshore drilling companies have increasingly expressed their concern about the lack of legal protections afforded to U.S. companies and have indicated a reluctance to assume significant risk in operating in areas beyond U.S. jurisdiction. In short, U.S. failure to ratify LOSC could have a chilling effect on commercial resource exploration and exploitation on the extended continental shelf.
First, without the protection now guaranteed by UNCLOS, U.S. companies are not likely to invest in deep seabed mining.109Almost Everyone Agrees: The U.S. Should Ratify the Law of the Sea Treaty — Stewart M. Patrick. — The Atlantic — Jun 10, 2012 [ More ] At a hearing before the Senate Foreign Relations Committee, Jay Timmons, President and CEO of the National Association of Manufacturers, spoke on manufacturers' behalf and expressed the hesitancy to invest: "[t]he development of deep seabed claims is incredibly expensive. Companies in the U.S. are reluctant to invest heavily in deep seabed mining because of the risk that their activities would not withstand a legal challenge since the U.S. is not a party to the Convention."110"Statement of Jay Timmons: The Law of the Sea Convention: Perspectives from Business and Industry (June 28, 2012) ." Testimony before the Senate Foreign Relations Committee, June 28, 2012. [ More (5 quotes) ] For instance, the Pacific Ocean contains a large supply of nodules, rock-like substances that contain minerals such as nickel, copper, and cobalt.111Mining the Seafloor for Rare-Earth Minerals — William J. Broad. — New York Times — Nov 09, 2010 [ More ] There is currently no cost-effective way to remove these nodules from the ocean floor.112Mining the Seafloor for Rare-Earth Minerals — William J. Broad. — New York Times — Nov 09, 2010 [ More ] It is possible that developing a procedure to extract the metal from the nodules will be the most expensive part of the process."113Mining the Seafloor for Rare-Earth Minerals — William J. Broad. — New York Times — Nov 09, 2010 [ More ] Further, methane hydrates114 are another potentially enormous alternative energy source found in the ocean with extraction technology in its infancy.115 Unless the United States accedes to UNCLOS, U.S. companies will be less likely to invest in deep seabed mining of the nodules and exploitation of methane hydrates, leaving untouched great resources that would add much revenue to the U.S. Treasury.
Moreover, to mine deep seabed minerals requires security of tenure for the billion dollar plus costs of such an operation. Our industry has emphatically reminded us that they cannot mine under a fishing approach in which mining is a free-for-all concept, as the critics seem to suggest. Rather, they must have both the exclusive rights to mine sites and international recognition of titles to the minerals recovered. These requirements led to the formation of a limited international agency to provide security of tenure and title for mineral resources of the seabed beyond national jurisdiction, which was otherwise owned by no one. The ISA was a necessary specialized agency of strictly limited jurisdiction to deal with security of tenure and stable property rights so that investors can amortize their debt. Quite contrary to the recent testimony of one critic before the Senate Committee on Environment and Public Works, the ISA would not have "the exclusive right to regulate what is done, by whom, when and under what circumstances in subsurface international waters and on the sea-floor." (12) Rather, the ISA is a small, narrowly mandated international agency that has emphatically no ability to control the water column and only functional authority over the mining of the minerals of the deep seabed beyond national jurisdiction. Again, this is a necessary requirement for seabed mining, an area beyond which any nation has sovereignty, to provide security of tenure to mine sites, without which mining will not occur. By not adhering to the treaty, the United States will simply lose its deep seabed mine sites--the best in the world--and our seabed mining industry will be permanently deep-sixed.
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After a lengthy pandemic pause, the International Seabed Authority is set to debate mining regulations but the U.S. is sidelined in the discussions as a non-party to UNCLOS.
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