1 millon to 4 million dry tons per year of nodules, depending on the product mix. One such plant of three million size might produce on the order of 100 million pounds per year of nickel and 85 million pounds of copper along with other products mentioned. The capital investment in one such operation will be of the order of $250 million. One question you will ask is how many such plants. This question will be answered by the actual economics of an operation and the extent of our and the world's appetite for metals. However, if one notes that the nickel market may grow at rate of 60 to 100 million pounds per year, this would provide a limit to the growth of ocean mining. Realistically, the next decade may only result in a total of 3 to 5 operations at most, but the products of these operations will supply critical needs. It becomes clear that, bearing in mind the many potential mine sites existing, only a small part of the potential will be tapped in the near future.

The high-technology content of and the large investments for ocean mining coupled with its pioneering nature lead inexorably to the conclusion that only nations with the most modern, sophisticated industrial capacity can even entertain the idea of ocean mining. There will be few operations in the beginning, all far from land but with the major facility-the processing plant-on land. Thus, the immediate outlook is that, bearing in mind the considerable number of mine sites, the chances of technological interference in ocean mining is small. The provisions of S. 1134 with respect to U.S. citizens coupled with the reciprocating State concept reduce these chances even further. However, the chances of political interference remain appreciable and the basic protections of S. 1134 against interference are vital to provide a favorable investment climate.

I have the temptation to continue to discuss this, to me, fascinating technology. Perhaps I have said enough to satiate you, or to bring out your real questions. As you already know, ocean mining is a pioneering operating, and we believe that the passage of S. 1134 will be of greatest efficacy in ensuring that the U.S. economy will blaze this trail and benefit from the results.

I urge the passage of S. 1134 into law.

Thank you, Mr. Chairman.

Senator METCALF. Thank you very much for a most informative and helpful and eloquent statement, Mr. Dubs. Now, you have a longer statement that has been submitted for the record.

Mr. DUBS. Yes, sir.

Senator METCALF. It will be incorporated into the record. And you are also going to submit a subsequent statement to be incorporated in our record. I hope you get it in before the spokesmen for environmentalists and international groups are going to testify.

Mr. DUBS. I will.

Senator METCALF. Thank you, sir.

[The prepared statement of Mr. Dubs follows:]

STATEMENT OF M. A. DUBS, DIRECTOR, OCEAN RESOURCES DEPARTMENT, KENNECOTT COPPER CORP.

Mr. Chairman:

My name is M. A. Dubs and I am Director of the Ocean Resources Department of the Kennecott Copper Corporation. I also am a member of the United States Department of State's Advisory Committee on the Law of the Sea and have served as an expert on the United States Delegation to the United Nations Seabed Committee. I am here today as a representative of the American Mining Congress in my capacity as a member of its Ad Hoc Committee on Undersea Mineral Resources. Thank you, Mr. Chairman, for this opportunity of appearing

today before the Subcommittee on Minerals, Materials and Fuels of the Senate Committee on Interior and Insular Affairs to present testimony on S. 1134, "Deep Seabed Hard Mineral Resources Act." It is my intent to testify on S. 1134 in relation to the ongoing consideration of the same problem area in the United Nations. "Seabed Committee."

The "Deep Seabed Hard Mineral Resources Act" itself appears to me to bear a very proper relationship to a future international regime. The Act starts out by saying, and I quote, ". . to promote the conservation and orderly development of the hard mineral resources of the deep seabed, pending adoption of an international regime therefor." (emphasis supplied Thus, its basic concept is to fill in the time gap until the international regime is in being. It further recognizes in Section 10(a) that licenses issued under the Act may be required to be placed under some future international regime. In Section 9 provision is made for sharing benefits of deep seabed

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operations with developing States.

Furthermore, this Act bestows no rights with respect to any part

of the seabed. It merely regulates the activities of persons subject to the jurisdiction of the United States with respect to each other in the development of deep seabed resources. It, of course, also provides the opportunity for reciprocal relations with other States. However, there are no provisions which would in any way interfere with the activities and freedoms of others in the deep seabed. In fact, the only protection against the activities of non-U.S. juridical persons is the financial protection against interference by others by means of the insurance provisions of Section 10(b). This is no different than other insurance concepts which have been applied to certain investments on land in foreign countries.

The foregoing is quite important since it relates directly as to whether S. 1134 represents unilateral action with respect to the international community. Clearly S. 1134 is not unilateral in the pejorative sense always used since its provisions do not interfere with the existing freedoms of any State or of anyone except persons subject to the jurisdiction of the United States. This false question of unilateral action is a perennial one with respect to S. 1134 and in fact Mr. Charles Brower in his letter of March 1, 1973 to Senator Jackson giving Executive Branch views on this legislation stated, "Regardless of our views on the intent and effect of the legislation, it may be argued by others that the legislation is similar to unilateral claims that we oppose and that are contrary to our security, navigation and resource interests.

Mr. Brower obviously knows that S. 1134

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does not constitute a unilateral claim. However, false charges of unilateral action against us by others are a natural defense by those who have already taken unilateral action. We should expect such charges in the United Nations negotiating atmosphere and should not get overly distraught by them. One must also bear in mind that the truly unilateral claim of others were the single most important issue which originally caused the United States to vigorously seek solutions to the problems of the law of the sea. Similarly, there is every evidence that the predecessor bill to S. 1134 had a most positive effect--in spite of, or perhaps because of, spirited debate--on "Seabed Committee" work. I have no doubt that the actual passage of S. 1134 into law would have an even more salutary effect rather than the oft predicted effect of creating an adverse negotiating atmosphere. Mr. Chairman, I do not know whether Mr. Brower's March 1, 1973 letter to Senator Jackson mentioned above is already a part of the record of these hearings. If it is not, I would request that it be included in the record because of the relation of these comments to

that letter.

As you know, Mr. Chairman, S. 1134 has reasonably detailed special provisions, although broad regulatory powers are also assigned to the Secretary of the Interior, which are designed to produce orderly development and otherwise regulate the activity of one U.S. person versus another. Examination of these provisions shows their elimination to be unlikely, although some may propose changes and even

additions.

It has been stated that these provisions preempt the Law

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of the Sea Conference.

In an appendix to Mr. Brower's March 1, 1973

letter to Senator Jackson, Mr. Leigh Ratiner, in commenting on this

objection to it is that it would appear to establish a complete regulatory scheme for deepsea mining by the U.S. in contravention of our efforts in the United Nations." This does not appear to be a valid objection. First, if the Law of the Sea Convention is successful, and I hope it will be, and comes into force within, say, ten years from now, there will still be only a very few operations under S. 1134. Even if these few were at complete variance with the international regime, it would be a minor problem in the broad sweep of things and in no way would the regime have to be unduly perturbed by these pioneering operations. Mr. John N. Moore in his March 19, 1973 statement to the United Nations "Seabed Committee, Subcommittee I," made this point to support the concept of the proposed provisional regime, and I quote, "It is thus apparent that, in the period to which the provisional regime would apply, only a handful of operations would occur." In fact, all the arguments made for a provisional regime apply to S. 1134 except the one that the provisional regime puts into provisional force the exact formulations of the treaty which has been opened for signature. In fact, the eventual international regime would benefit from the pioneering operations, since the information developed by these initial operations would help create sensible regulations in the regime. Benefits derived from these operations under S. 1134 would also include help for developing