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issue raised was whether this study would prejudge the results of the Conference with respect to an international operating agency. It is far too early to judge how well accepted this idea will become. One problem with the provisional regime is that it might have far less than universal acceptance. This might create serious problems for an organization operating under its umbrella. It also should be noted that it is unlikely that the details of such a provisional regime could be worked out and put into force any earlier than a year after conclusion of the convention.

Mr. Chairman, in summary, I do not believe the provisions of S. 1134 to be inimical to the international regime hopefully to be established.

It does not seem that passage of S. 1134 would in

fact create serious real difficulties in the negotiation of law of the sea questions or preempt the results of the Law of the Sea Conference. I remain convinced that the international regime will not be available in time even with the assistance of this idea of a provisional regime. I urge the passage into law of S. 1134, the "Deep Seabed Hard Mineral Resources Act."

This concludes my statement, and I thank you.

Senator METCALF. Now, Mr. Ary, as I understand it you are going to appear as a panel. My very helpful staff has prepared for me some questions, and I have already determined some other questions which are largely to make this record. I hope that each of the members of the panel will respond. I am not going to ask questions of any particular person.

I am going to ask you Mr. Dubs, Mr. Burgess and Mr. Ary, that as I ask questions, if one of you or all three of you want to respond, this is your opportunity to make the record on this law.

I am going to start with a question, Mr. Ary, or anyone else would you like to comment on the seeming ambivalence of policy within the executive branch-that is, the Departments of Commerce and Treasury are saying "We need to cover the balance-of-payments deficits"; while the Department of the Interior is saying "We need the minerals"; and the State Department is saying, "We don't need a bill. Ocean mining should wait."

If you want one of your colleagues to answer, okay. I think this is the most important question before us, really.

Mr. ARY. I agree with you. I think it is a very important question. We feel that as representatives of the mining industry that we are both responsible and responsive, as we have-in the past-been responsive to the needs of the United States when called upon either by the administration or by various agencies to supply mineral needs at the time of need, such as during the recent nuclear energy crisis of World War II.

It is difficult for us to follow the thinking of the administration when we hear the USGS making statements that we have a severe mineral shortage looming in front of us, and that we should be expending more efforts in attempting to resolve this problem.

We read the Secretary of the Interior's report relative to the same problem-we are having to import many of the commodities that we don't have. We hear the Secretaries of Commerce and Treasury talk about the great balance-of-payments deficit that we are faced with, and all the time industry is trying as hard as possible to find either substitutes for these minerals we are importing. But, as we stated earlier, there are no substitutes in some cases; or in other cases to obtain sources so that we have some independence of foreign sources. But then we hear the State Department Interagency Task Force come before the House and Senate saying it is not necessary for this bill to be passed and that they would like to wait and to negotiate with the UN to establish an international mineral policy which we feel is-I personally feel may never come about.

It is difficult to try to see where the various agencies are going. We are going pushed in the one case to rush ahead as fast as possible, and in other cases to stand back and wait. It is a hurry-up-and-wait program. We are willing to hurry-up, and now we are being forced to wait.

We feel that with the passage of this bill it will be the first step that will cause the entire industry or the world to move forward in this. We think that this will be a great negotiating lever for the Interagency task force of the United Nations. They will have something to point to.

We don't understand where they are trying to go. We wish we did. We would like to have a definition from the administration as to what they mean when they say, "If we don't make progress in the next session of the Law of the Sea Conference ***". -we would like to have them actually define what they mean by "progress." We are not quite sure that the oral deeds that they get are going to be recordable by this "registry" they are talking about.

I am not a very good acceptor of oral deeds under seal; I like to see them written down with signatures following. I would like to see on paper exactly what they mean when they say "progress.” And, if we don't make "progress," then we are going to have to have legislation of this type.

Senator METCALF. Do any of the other members of the panel have a comment? Mr. Burgess? Mr. Dubs?

I am in favor of international cooperation for humanity. I would bleed and die for humanity with any Senator, but I am certainly persuaded by the idea that some time we have to get busy and get down to mining the ores that we need. And maybe, persuade the State Department to get off its home base and do something about it. I have some technical questions that are rather long. I would like to submit those questions to the three members of the panel, and have them incorporate them into the record rather than having you answer these various technical questions. Would it be satisfactory if I submit these questions on my behalf and on behalf of the staff to you and your staff and colleagues?

Mr. ARY. Yes, Senator.

Senator METCALF. And you could get responses in by the 7th of June, let us say. Can we do that?

Mr. ARY. Yes, sir.

Senator METCALF. I would like to have the responses to these questions in so that I can share them with spokesmen for environmental and international groups before they testify on this bill.

As I pointed out at the beginning, I am not wedded to any legislation, but I am very much concerned about the fact that here we have a tremendous natural resource, and we are not using the technology that has been developed within our own country to develop this resource for the benefit of the United States.

And this nonsense as far as I am concerned-and you can put nonsense in quotes, Mr. Reporter-about unilateral approaches is just that. We are way ahead of a lot of people, and we may lose that lead and our resources if we just sit around here and wait for the State Department to drag its feet while trying to negotiate some international treaty.

Mr. ARY. We would like to speak specifically to that for just 1

minute or so.

Dating back as far as 1969 we have indicated that we have somewhat of a lead in tehnology. And it has become eroded as we go along because we keep putting off the time when we can go on.

We feel that if we continue to delay the opportunity of industry to go forward with their programs of deep ocean mining, that this technology is going to be eroded. Now we have seen the Japanese go out with their continuous bucket line program last year. There is a pro

gram set up for this year. We know that the West Germans are going out with their ship this year.

To my knowledge I do not know of any U.S. expeditions that are planned, so we continue to see our lead become more and more fragile and the erosion continue.

If the U.S. does not establish a program to allow us to continue with our ocean mining and some third country does, our industry is going to be forced into a real difficult position. We are either going to have to quit and fold up our programs or we are going to have to sell what technology we now have to some foreign country and become completely dependent on some materials from foreign sources.

Now, the need for these particular metals has been stated many times, and if we are going to continue and maybe have our own source, and to get these materials into the Nation's economy and not be dependent upon any foreign source material or not be forced by our own people to go foreign and sell our technology, we are going to have to have a bill of this type so that we can continue.

Senator METCALF. Do either of you other gentlemen want to comment on that?

Mr. BURGESS. Mr. Chairman.

I would like to speak as to the element of urgency, because I think there is an important misunderstanding. In my extent of remarks which you have generously offered to incorporate into the record, I quote Mr. Moore, who was the U.S. representative to the Committee of the Peaceful Uses of the Seabed and Ocean Floor beyond the Limits of National Jurisdiction, in a statement on March 19, in which he said:

Seabed mining technology has now advanced to the stage where commercial exploitation of manganese nodules can and no doubt will occur in the next three to five years. In anticipation of commercial production, U.S. companies and presumably the companies of other countries will shortly invest large sources of money in order to continue their development work and begin construction of production facilities.

This implies that these activities are going to continue whether or not there is new legal arrangement that promises satisfactory terms under which to produce. That is a nonsequitur.

It is not going to go ahead at this present pace unless this vacuum is filled. I cannot qualify this. I cannot say that as of a certain date X company is going to stop spending Y dollars per year. But there is nothing in this which, like a gyroscope, maintains its own course regardless of the external environment. There has to be a legal accommodation to these if the present pace is to be sustained.

This is not something that can be just sort of left to run along independently while at the United Nations or elsewhere time is taken up with a discussion of future arrangements.

Mr. DUBS. If I may I would like to add one other point to complete this part of the picture. That is the question of whether or not the technology is ready today to do this job, or, if not, how close is it? That is if the proper investment climate is created and the legal arrangements which Mr. Burgess alludes to come about, which they can do through this bill.

The technology is poised. Today we have in existence-if I may be permitted to combine all that I know of U.S. technology as if it was

in one package. Today we have in existence a 35,000-ton ship by Hughes. This ship is a specialized mining ship that is being equipped. My guess is that it will be in test service sometime before the end of this year.

Senator METCALF. You mean, whether we pass this bill or not.

Mr. DUBS. That is right.

Senator METCALF. Whether we pass this bill or not and whether we reach an agreement in the United Nations, this is going ahead, is it not?

Mr. DUBS. This ship is going to go ahead, but that represents the development of one aspect of the machinery that might be required to mine the ocean. It turns out that as a piece of machinery is may amount to-if I may speak quite loosely-25 percent of the investment's operating cost. So it is a forward looking thing, but the main investment, the main financial risk lies downstream of that ship.

However, with that ship in existence and let's assume that the Hughes organization has done an excellent technical job and the ship does work or, if we could see all the technology that was resident in the United States brought to bear one can state with considerable certainty-not absolutely-but considerable certainty that such a ship might be made to work. So that ship might be mining nodules, or could be-I emphasize "could me"-in 1974, without the requisite total structure to handle the total investment of economic risks.

Now, let's say the ship is successful and mines the nodules. The nodules have to be processed. At least two companies in the United States have stated that they have worked out processes.

Mr. Burgess stated that our company has a metallurgical pilot plant in operation, which is turning out quite satisfactory results. Deepsea Ventures has announced that they have a metallurgical process for handling this material. Now, if these allegations are correct of both of these companies, then such a process would put great emphasis on moving ahead.

We met the material crisis that Mr. Ary talks about. If we moved ahead quickly this technology could be used to get into operation a metallurgical plant in 24 or 30 months from today. Now that, admittedly, is a crash schedule with everything working correctly. But I simply cited it to show that the technology is in gear. The actual business plans will be tempered, of course, by the unknowns that we have talked about here, and by the particular business climates that are involved.

And that is why I have used it so conservatively that there will be 3 to 5 such operations in the next decade rather than telling people that an operation will be going in 2 years. But at least, perhaps this would be the field of the status of technology.

Senator METCALF. May I ask a question?

Is the Hughes ship similar to the Deepsea Ventures program, or different? If you know.

Mr. DUBS. Well, I really do not know this, because such budding technology is rather jealously protected by such companies. But one can say that the indication from the literature is that most of these companies are thinking in terms of large hydraulic systems, which means that there is a pipe of some sort going to the ocean bottom that hooks up with some harvester.

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