Critical Minerals from the Sea

An Economic and National Security Perspective

Caitlyn Antrim Executive Director Rule of Law Committee for the Oceans

Panel on Critical Minerals from the Sea July 17, 2012 The Stimson Center Washington, DC

Reagan on Nodules and their Importance: Nov. 1978

What they are after are metal-oxide nodules that lie on the ocean oor as much as 3 miles deep. they have been photographed and they have been brought to the surface. We know they constant several metals and will run about $100 to the ton. In the Pacic area to be mined the nodules are expected to yield 30% manganese, 1.4% nickel, one quarter of a percent cobalt and 1.9 % copper. We presently depend on imports for most of these metals. Indeed we are totally dependent on import for manganese and cobalt and 90% dependent for nickel. Copper isnt quite as critical, still we import about 15%. It is estimated the Eastern Pacic alone can provide enough of these metals to last the world for hundreds of years. In other words, the U.S. can become self sufcient through deep sea mining.

Denitions

Critical Materials play an essential role

in industry and defense.

Strategic Materials are subject to

disruption or interruption of supply

Elements of Strategic and Critical Materials Policy

Production Substitution Recycling

Examples of Supply Vulnerability

Soviet Embargo of Manganese and
Chromium - 1949

Rhodesian Chromium Embargo - 1966 Canadian Nickel Strike - 1969 Cobalt Panic - 1978-79 Chinas Restriction of REE Exports - 2011

Deep Seabed Minerals of Commercial Interest

Polymetallic Nodules Cobalt Crusts

Cobalt, Manganese Copper, Zinc, Gold

Manganese, Nickel, Copper, Cobalt, Rare Earths,

Polymetallic Suldes

Land-Based Production
100

75

50

25

Pacific Nickel

China

Southern Africa Cobalt Copper

Russia

Latin America Manganese

North America REE

World Distribution of Deep Seabed Minerals

Current Regions of Interest

Nodule Sites: 10+3

Sulde Sites: 2+2

Seabed Mineral Claims

(Pacic Polymetallic Nodules)

Metal Concentrations in Seabed Minerals

Polymetallic Nodules Manganese Iron Nickel Cobalt Rare Earths Copper 25%-35% 6% 1.3-1.5% 0.25% 0.1% 1.0-1.3%

Critical Mineral Potential of a Nodule Mine

Mine Recovery: 1.5 mm TPY
Tons of Metal per Year and Percent of World Production

Nickel Copper Cobalt Rare Earth Manganese

18,525 15,675 3,240 1,296 369,750

1.0% 0.1% 3.3% 1.1% 2.6%

Long Term Price Trends

Minerals and Development

Goods - batteries, electronics, etc Heavy Manufacture Light Manufacture Infrastructure

0!

10

15

20

25

30

35

Development/Redevelopment Processes

Business Outlook For Deep Seabed Mining

Growing Market for Products Competitive with Land Based Sources Limited Expansion Opportunities for Landbased Sources

Attractive Economics and Quick Payback

period in Post-recession Economy Regulatory Regime

Increasingly Stable International Legal and

Vulnerabilities of Seabed Mineral Production

Economic Market volatility; Overproduction from ocean or land based sources; changes in metal demand; Changes in energy, labor and other costs Terrorism; Military action in times of conict International legal challenges; Foreign court challenges to title to minerals

Force Legal

Thank You