for the financing agency so far as any domestic competition would be concerned, and yet would run a lot less risk in the international arena from problems of people saying, "How can the United States convey title to property which it does not own?" I think those are the essential points that need to be made. I did cover in my testimony, as Ambassador Richardson did, the matter of conveying grandfather rights. As a matter of fact, I think every witness covered that. We believe that if this can be achieved, that we will give the individual domestic American deep seabed miner the kind of safeguard that he needs without burdening the American taxpayer unnecessarily with what potentially could be an extremely expensive burden because of protecting or underwriting, if you please, a miner for something that the United States as a government might subsequently do. Now I think other witnesses have made the point and I would like to emphasize it, that if we are unsuccessful in achieving grandfather rights in the provisions, then I think the U.S. Government does have an obligation and would have an opportunity along with the several congressional committees in their oversight capacity, to address this. I think we will have a better view of this again by the middle of July. Mr. SANTINI. I think your optimism is well grounded, Mr. Pollock. I want to express the appreciation of the committee for this thorough analytical evaluation of our legislative consideration since you and whatever assistants you are able to call on did a good job in preparing this statement. I thank you very much. Mr. POLLOCK. Mr. Chairman, may I, before closing, request your permission to submit for the record some of the marine mineral activities that the Department of Commerce has been involved in. I think it would be useful for the committee to have that information. Mr. SANTINI. Please. Do you have-Mr. Shafer suggested the DOME study would be of particular interest to the committee? Mr. POLLOCK. Yes, sir, we do. Mr. SANTINI. My initial impression was it had to do with the capital, but obviously those with more expertise than I have, realize it has greater significance. Mr. POLLOCK. It is the deep ocean mining environmental study. We have been engaged in it for several years now. We have completed the first phase. We will be going into the second phase and modifying some of this as we watch industry in their prototype operations. There has been some discussion, but no decision yet, on whether or not we will eventually embark on a third phase which would be monitoring the industry when they are operating commercially. We would be happy to provide that for the committee. Mr. SANTINI. Thank you, sir, for both your testimony and your statements. Mr. POLLOCK. Thank you very much, sir. Mr. SANTINI. We shall sit in recess. [Whereupon, at 1:30 p.m., the subcommittee adjourned, to reconvene at the call of the Chair.] [Prepared statements and additional material submitted for the hearing record follow:] APPENDIX Additional Material Submitted for the Hearing Record STATEMENT BY THE HONORABLE JOHN M. MURPHY BEFORE THE HOUSE OF REPRESENTATIVES DEEP SEABED MINING LEGISLATION April 4, 1977 1324 Longworth House Office Building 10:00 a.m. I. INTRODUCTORY REMARKS: DEEP SEABED MINING. MR. CHAIRMAN, I APPRECIATE THIS OPPORTUNITY TO TESTIFY BEFORE YOUR SUBCOMMITTEE ON ONE OF THE MOST IMPORTANT ISSUES TO CONFRONT THE 95TH CONGRESS. THE EXPLOITATION OF MANGANESE NODULES FROM THE DEEP SEABED HAS BEEN THE MOST DIVISIVE ISSUE AT THE THIRD UNITED NATIONS LAW OF THE SEA CONFERENCE AND IT WILL BE ONE OF THE MOST COMPLEX AND SIGNIFICANT POLICY DECISIONS WHICH WE IN THE CONGRESS WILL MAKE THIS SES SION. FIRST, I WOULD LIKE TO LOOK AT THE PROGRESS WHICH THE AMERICAN MINING INDUSTRY HAS MADE IN RECENT YEARS. SEVERAL UNITED STATES COMPANIES, TOGETHER WITH THEIR FOREIGN AND DOMESTIC PARTNERS, HAVE ALREADY SPENT WELL IN EXCESS OF $100 MILLION TO DEVELOP OCEAN MINING TECHNOLOGY. THE ADVANCES WHICH THEY HAVE MADE ARE IMPRESSIVE. THE COMPANIES HAVE IDENTIFIED NODULE DEPOSITS WHICH COULD PROVIDE SATISFACTORY MINE SITES. THEY HAVE LAREGLY SETTLED THE METALURGICAL PROBLEMS OF PROCESSING METALS FROM NODULES. THEY HAVE DEVELOPED MINING SYSTEMS WHICH HAVE PROGRESSED FROM THE DRAWING BOARD, COMPUTER, AND LABORATORY STAGES TO LARGE THE FACT IS THAT MOST GOOD NODULE DEPOSITS ARE FOUND IN THE - YOND THE CONTINENTAL SHELVES OF ANY COUNTRY. ALTHOUGH OCEAN MINING HAS NOT BEEN TESTED ON A FULL COMMERCIAL SCALE TO DATE, THE EXPERIMENTS THAT HAVE BEEN CONDUCTED INDICATE NO TECHNOLOGICAL IMPEDIMENT TO MINING - EVEN AT DEPTHS OF 15,000 TO 20,000 FEET. CLEARLY, MR. CHAIRMAN, THERE IS NO LONGER ANY DOUBT ABOUT THE TECHNICAL AND ECONOMIC FEASIBILITY OF OCEAN MINING. THE NEXT ISSUE WHICH MUST BE ADDRESSED, THEN, IS WHETHER THE PURSUIT OF THESE MINERAL NODULES IS IN THE NATIONAL INTEREST OF THE UNITED STATES. II. DEEP SEABED MINING AND THE AMERICAN NATIONAL INTEREST. THE MINERAL NODULES LYING ON THE OCEAN FLOOR CONTAIN QUANTITIES OF NICKEL, COPPPER, COBALT AND MANGANESE. IN DETERMINING WHETHER THE EXPLOITATION OF THESE RESOURCES IS IMPORTANT TO THE UNITED STATES, WE MUST LOOK AT FOUR FACTORS. FIRST, WE SHOULD EXAMINE WHETHER THE MINERALS HAVE STRATEGIC OR COMMERCIAL VALUE IN OUR ECONOMIC SYSTEM. SECOND, WE MUST LOOK AT THE AMOUNT OF SUCH MATERIALS WHICH WE IMPORT FROM OTHER NATIONS. THIRD, IT IS IMPORTANT TO ANALYZE THE POLITICAL STABILITY OF THOSE COUNTRIES FROM WHICH WE IMPORT. FINALLY, THE POTENTIAL LIKELIHOOD OF CARTELS TO CONTROL PRODUCTION AND RAISE PRICES IS AN IMPORTANT FEATURE TODAY OF INTERNATIONAL TRADE. COBALT IS OF STRATEGIC AND COMMERCIAL IMPORTANCE AND HAS ITS PRIMARY APPLICATION IN HIGH TEMPERATURE ALLOYS AND TOOL STEELS. COPPER IS A MAJOR RAW MATERIAL OF GREAT COMMERCIAL IMPORTANCE. OVER HALF OF IT CONSUMED IN THE UNITED STATES IS USED IN ELECTRICAL APPLICATIONS WITH OTHER USES IN CONSTRUCTION, INDUSTRIAL MACHINERY, TRANSPORTATION AND MILITARY SUPPLIES. NICKEL IS IMPORTANT TO THE ECONOMIC WELFARE AND SECURITY OF THE UNITED STATES, AND IS USED MOST EXTENSIVELY AS AN ALLOY. MANGANESE IS A VITAL COMMERCIAL AND STRATEGIC ORE WHICH IS ESSENTIAL TO THE MANUFACTURE OF STEEL. WITH RESPECT TO THE SECOND FACTOR, LAST YEAR WE DEPENDED ON OTHER NATIONS FOR OVER 50% OF OUR USE OF 23 ESSENTIAL NON-FUEL MINERALS. IN REFERENCE TO THE FOUR MINERALS UNDER DISCUSSION, WE IMPORTED 71 PERCENT OF THE NICKEL WE USED IN 1976 WITH A DOLLAR VALUF OF $500 MILLION; 15 PERCENT OF OUR CONSUMPTION OF COPPER AT A VALUE OF $700 MILLION; AND 98 PERCENT EACH OF OUR CONSUMPTION OF COBALT AND MANGANESE AT A DOLLAR VALUE OF $50 MILLION AND $130 MILLION THESE DATA SHOULD GIVE US SOME CLUE AS TO OUR VUL RESPECTIVELY. NERABILITY TO THE WHIMS OF OTHER NATIONS. THE SOURCES OF OUR FOREIGN SUPPLIES CANNOT GIVE US MUCH COMFORT EITHER. OUR MANGANESE IMPORTS COME PRIMARILY FROM GABON, BRAZIL, SOUTH AFRICA, AUSTRALIA AND INDIA. COBALT COMES PRIMARILY FROM ZAIRE WHICH IS VIRTUALLY A MONOPOLY PRODUCER OF COBALT IN THE WORLD. THREE-FOURTHS OF OUR COBALT IMPORTS COME FROM THIS AFRICAN NATION WHICH, AS WE ALL KNOW, HAS BEEN IN THE HEADLINES LATELY. NICKEL IS SUPPLIED MAINLY BY CANADA AND THE FRENCH TERRITORY OF NEW CALIDONIA, ALTHOUGH HIGH QUALITY CANADIAN NICKEL DEPOSITS ARE ON THE DECLINE. UNITED STATES NICKEL IMPORTS FROM DEVELOPING COUNTRIES HAVE BEEN INCREASING, AND FUTURE WORLD SUPPLIES WILL BE SUBSTANTIALLY DERIVED FROM SUCH THIRD WORLD COUNTRIES AS INDONESIA, THE PHILIPPINES, COLUMBIA, THE DOMINICAN REPUBLIC AND CUBA. THE WORLD'S LARGEST PRODUCERS OF COPPER ARE THE UNITED STATES, CHILE, THE SOVIET UNION, CANADA, AND ZAMBIA, IN THAT ORDER. OVER RECENT YEARS, WHILE THE UNITED STATES HAS MAINTAINED RELATIVE SELFSUFFICIENCY IN COPPER, THE ORE GRADES AVAILABLE DOMESTICALLY ARE DECLINING AND OUR IMPORT DEPENDENCY HAS INCREASED, REACHING THE 15 PERCENT LEVEL LAST YEAR. |