On the Verge

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On the Verge. Prospects for Deep Seabed Mining within a Decade. U.S. Geological Survey January 17, 2013. Caitlyn Antrim Rule of Law Committee for the Oceans. Focus: Outlook for Nodule Development. Ocean- Based Resource Minerals of Interest Nickel Copper Cobalt Manganese - PowerPoint PPT Presentation

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  • On the VergeProspects for Deep Seabed Mining within a DecadeCaitlyn AntrimRule of Law Committee for the OceansU.S. Geological Survey January 17, 2013

  • Focus: Outlook for Nodule DevelopmentOcean- Based ResourceMinerals of InterestNickelCopperCobaltManganeseRare Earth ElementsBeyond National Jurisdiction

  • East Pacific Nodule Field110W-160W, 0-20NMetal ContentNi: 1.2-1.4%Cu: 1.0-1.2%Co: 0.25%Mn: 29%REE: 0.08-0.1%Depth: 4000-5500 Meters

  • CCZ Inferred Resources

    Included Area (km2X106)Estimated Tonnage (metric tons X 106)NodulesManganese (Mn)Cobalt (Co)Nickel (Ni)Copper (Cu)Study Area4.1930,7008,65767.5383341Reduced Area3.8321,1005,95046.4270234The Study Area represents the total area of the four ISA rectangles. The Reduced Area eliminates blocks along the inner margins of the four rectangles where data was not available for analysis.

  • Economics of Deep Sea Nodule DevelopmentAt-Sea Capital and Operating Technology Based on Off-Shore Development and Maritime Shipping IndustryOn-Land technology based on Nickel Laterite Processing Systems and Ferroalloy Production Market Prices and Revenues Determined by Land-Based Mineral Sources

  • Sea System DesignNodule HarvesterLift SystemBase VesselTailings ReturnSea TransportAlternative Designs

  • Unique Marine Systems

  • Major Land-Based Sources of Nodule Minerals

  • Critical Mineral Security

    Net Import Reliance* Major World Ore ProducersUS Import SourcesFraction of US Consumption in 1 million tons of nodulesNickel47%Russia, CanadaRussia, Canada, Australia, Norway10.1%Copper35%Chile, United StatesChile, Canada, Peru0.6%Cobalt75%D.R. Congo, ZambiaChina, Norway, Russia, Canada36.9%Manganese100%Gabon, AustraliaGabon, South Africa, Australia, China35.8%Rare Earths100%ChinaChina10.0%* Import reliance counts secondary recovery (recycling) as domestic production

  • Price History: 1982 - 2012Combined value of nickel, copper, cobalt and manganese in 2012 $. REE value is not included.

  • Costs and RevenuesCapital Costs: $2.1 to $3.5 BillionOperating Costs: $470 million to $600 millionContained Metal Value, not including REE values (normalized to millions of 2012 US $)

    Annual Recovery Rate (Dry Metric Tons)200720113 Metal System: 3 million $2,295$1,4914 Metal System: 1.5 million $1,718$1,415

  • Rare Earths and Deep Seabed NodulesNodule assay shows .08% REE ContentHeavy REEs account for 21% of total REEBy Separating Individual REEs, total REE market value is $247/tonREE Content Could Increase Annual Revenues by $375 to $750 million

  • Benefits to US of Seabed Nodule Development Technology leadership in first of three new high seas sources of critical metalsCapital Investment of about $3 billionAnnual Sales about $1.4 to $2.2 billion780 direct jobs; 2727 or more total per operationSignificant contribution to critical materials securitySignificant improvement in import-export balanceDownstream employment and business benefits will be felt in the Gulf Coast and Ohio River Valley

  • International Regime:US Objectives in 1982Not Deter DevelopmentAssure National AccessAssure and Define a U.S. Decision-Making Role Allow United States to Block AmendmentsNot Set Undesirable PrecedentsResolve Issues Identified asRaisingSignificant Objections in the Senate

  • Todays Investment Climate for Deep Seabed MineralsAssured Access, Tenure and TitleRule-based International Regulatory RegimeDispute Resolution for InvestorsIssue: Lack of Recognition of Claims Outside UNCLOS

  • Isolation of the US fromDeep Seabed MiningThe LOS Convention establishes that:Claimants must be sponsored by a State Party of their own nationality Parties to the Convention cannot recognize title to minerals recovered outside the Convention (precluding sale of minerals in international commodity markets)Exclusive access can only be recognized through the Convention (no Reciprocating States Agreement or international legal protection of US claims)

  • Current Nodule Claims in the Clarion Clipperton Zone

  • ConclusionsDeep Seabed Nodules are a World-Class Resource of Critical MineralsLong Term Demand will be driven by industrial development in China, India, Brazil, South Africa and RussiaFuture seabed mining will compete against nickel laterite and porphyry copper deposits of declining grade and accessibilityAdditional development of hundreds of millions of dollars are needed before full investmentMiners will require international capital and access to commodity marketsUS Industry Needs the LOS Conventions Seabed Regime

  • Thank you

  • SupplementalInformation

  • Cost Estimates (Million US $)Updated to 2012, Scaled to 3 Million Dry Metric Tons per Year

    MIT 1984Updated MITCapitalOperatingCapitalOperatingMining306.265.6857.0183.5Sea Transport200.922.2562.162.1Marine Support1. Discharge Terminal22. Transport36.77.7102.621.5Processing449.199.61256.8278.7Waste Disposal15.33.942.810.9General & Administrative88.24.0246.811.2Continuing Preparations0.,121.0217.03,137.1607.3

  • Employment

    At-Sea Mining Systems:Two alternate 40 person teams of ship crew and mine system operators for each of two mine ships160Ore Transport Ships:28 to 32 crew members for each of four ore vessels112-128Ore Processing Plant:24/7 operations with 300 operators, 50 each of supervisors, managers, administrative staff, and support500Net JobsPer Operation, not including construction780Labor costs in ship constructionLabor costs in construction of mine and transport ships. $2012$324 million

  • International PartnersUS Companies Cant Go It Alone; Private US Consortia with International Partners in 1989:Ocean Mining Associates (50% by Belgium and Italy)Ocean Management Inc. (50.22% by Canada and Japan; Germany takes share in 1990s)Kennecott Consortium (48% by Canada Japan, UK; Kennecott itself was owned by Rio Tinto Zinc and later by British Petroleum)Lockheed/Ocean Minerals Co. (Dutch partners in early 1980s)