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metal, but not used in large commerical quantities.

The

availability of a new and low-cost source of cobalt may increase its use, especially to the extent that it can be used in place of or in combination with nickel, but it cannot assume the initially critical role of nickel in limiting the size of a marine mining industry. With respect to manganese, we do not have sufficient information at this time as to the potential market for the high purity manganese which would result from the refining of manganese nodules in some metallurgical

processes.

Although detailed information remains proprietary, it is generally accepted that two types of hydrometallurgical processes are currently being tested by prospective U.S. nodule miners. One would produce manganese, copper, cobalt and nickel, while the other would produce nickel, copper and cobalt. A minimum production unit of 1 million dry tons of nodules per year appears to be necessary for the four metal process, but 3 million tons per year may be minimal for the three metal process. These production unit sizes have been identified by industry through a combination of future market evaluations, design of optimal mining and extractive metallurgical systems and estimation of total system costs.

The foregoing represents a brief preliminary economic analysis of the importance of deep ocean mining. In

order to illustrate these points in a more detailed fashion,

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we have prepared a hypothetical schedule for nodule mining which is attached. Such a schedule demonstrates why nickel markets will govern the first years of growth for the deep

sea mining industry.

It is clear that mineral resources of the ocean bottoms are of considerable importance to the United States, not only for the potential they offer of a secure source of metals necessary for our economic prosperity, but also for the accompanying benefits our balance of payments position.

to

Accordingly, it is the Administration's policy to follow a course of action which will assure that these minerals are available for the future to American consumers and to United States industry. To satisfy this policy the arrangements

for seabed mining must guarantee that (1) American companies are entitled to mine these minerals under conditions which assure a stable, secure, and fair investment climate; (2) the environment is protected from degradation, and (3) the public is assured a fair return for the disposition of such mineral

resources.

These considerations alone may not demonstrate a need for urgency with respect to the development of the deep seabeds; however, other factors do create a degree of urgency. These involve our lead in prospecting, technology, and marketing, as well as the need to maintain industry initiative and momentum and the need to encourage pioneering industrial activity

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which may give rise eventually to even greater mineral

resources benefits in the oceans.

It is in the nature of our society and our economic system that the market place and potential for profit making stimulate technological initiative. We in the Government do not decide that a particular mineral resource is worth developing for our future needs and then develop the resource ourselves. Neither do we give direct subsidies to our mining industry so as to encourage them to enter a business which they have not deemed profitable. On the contrary, when industry finds that a market either exists or can be developed for a new product and that the market is sufficiently large to justify major investments with reasonable anticipation of profit, new technology is found and new resources are then developed. The public is clearly the beneficiary of this process. To keep this process going, however, Government must assure that it does not take actions which hamper this kind of industrial initiative with the attendant risk that the technology will

never be developed or may be developed too late to be

economically competitive.

Ocean mining is a very good example of this process. Existence of manganese nodules on the deep ocean bottoms has been known for over 100 years. No nation, including others who like ourselves depend substantially on nickel and copper,

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Neither capital nor technology

has developed this resource.

was put into this resource until about 10 years ago when

as a result of industry initiative the opportunity to develop and market the resource profitably was seized upon. Only then did the period of research, technology development and preliminary prospecting begin. Public reports of the amounts expended

by three American companies so far indicate that approximately $90 million have already been invested to bring this new industry into being. In short, the initiative has been taken and the technology is being developed.

The

The technology which is currently being developed for nodule mining is extremely sophisticated and expensive. oceanographic ship and its equipment used in the prospecting phase alone can cost $1,500-$4,000 per day, while the costs jump to $2,500-$5,000 per day when more intensive exploration work begins. Shipboard equipment must include highly complex devices for acoustical, optical and magnetic observation, together with grab samplers, prospecting dredges, and box and piston corers for sampling.

To our knowledge, there are three types of mining systems presently being considered for manganese nodule mining:

(a)

Continuous path dredging involves a suspended conduit that connects a dredge head and the ship, which transverses the mine site, collecting ore over a certain

sweep width.

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(b) Fixed area dredging is conducted by a collecting device whose central portion remains stationary on the ocean bottom until ore lying within the radius of the sweeping device has been collected. During the process, the surface ship or platform remains stationary above.

(c) Continuous line bucket dredging involves a long continuous rope to which are attached dredge buckets. As the ship moves sideways, the loop of dredge buckets is dragged across the ocean bottom, scooping up ore.

Pilot tests of the continuous path dredging system and the continuous line bucket system have been conducted, but

few of the results have been publicly released. The technological sophistication of all these mining devices will make

them both expensive and design-sensitive to particular types of nodule

deposits and surrounding topography.

Several metallurgical processes have been experimentally tried in the winning of metals from manganese nodules.

To

our knowledge, only hydrometallurgical techniques are presently being considered for commerical processing. The metallurgical process is specifically sensitive to such factors as the physical characteristics of the nodules, their iron content, trace metal content, assay or grade and detrital materials. Our consultations with industry have highlighted this critical aspect of nodule mining the degree to which both equipment development and type of metallurgical process are dependent upon definite knowledge of the mine site to be exploited.