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Critical Minerals

from the SeaAn 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 CenterWashington, DC

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Reagan on Nodules and theirImportance: Nov. 1978

What they are after are metal-oxide nodulesthat lie on the ocean floor as much as 3miles deep. they have been photographedand they have been brought to the surface.We know they constant several metals andwill run about $100 to the ton. In the Pacificarea to be mined the nodules are expectedto yield 30% manganese, 1.4% nickel, onequarter of a percent cobalt and 1.9 %copper. We presently depend on imports formost of these metals. Indeed we are totallydependent on import for manganese andcobalt and 90% dependent for nickel.Copper isnt quite as critical, still we importabout 15%.

It is estimated the Eastern Pacific alone canprovide enough of these metals to last theworld for hundreds of years. In other words,the U.S. can become self sufficient throughdeep sea mining.

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Definitions

Critical Materials play an essential role

in industry and defense.

Strategic Materials are subject todisruption or interruption of supply

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Elements of Strategic and

Critical Materials Policy

ProductionSubstitution

Recycling

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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

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Deep Seabed Minerals

of Commercial Interest

Polymetallic Nodules

Manganese, Nickel, Copper, Cobalt, Rare Earths,

Cobalt Crusts Cobalt, Manganese

Polymetallic Sulfides Copper, Zinc, Gold

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Land-Based Production

0

25

50

75

100

Pacific China Southern Africa Russia Latin America North America

Nickel Cobalt Copper Manganese REE

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World Distribution of

Deep Seabed Minerals

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Current Regions of Interest

Nodule Sites: 10+3 Sulfide Sites: 2+2

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Seabed Mineral Claims(Pacific Polymetallic Nodules)

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Metal Concentrations

in Seabed MineralsPolymetallic Nodules

Manganese

Iron

Nickel

Cobalt

Rare Earths

Copper

25%-35%

6%

1.3-1.5%

0.25%

0.1%

1.0-1.3%

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Critical Mineral Potential

of a Nodule MineMine Recovery: 1.5 mm TPY

Nickel 18,525 1.0%

Copper 15,675 0.1%

Cobalt 3,240 3.3%Rare Earth 1,296 1.1%

Manganese 369,750 2.6%

Tons of Metal per Year and Percent of World Production

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Long Term Price Trends

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Minerals and Development

Development/Redevelopment Processes

Infrastructure

Light Manufacture

Heavy Manufacture

Goods - batteries, electronics, etc

0! 5 10 15 20 25 30 35

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Business Outlook For

Deep Seabed Mining Growing Market for Products

Competitive with Land Based Sources

Limited Expansion Opportunities for Land-

based Sources

Attractive Economics and Quick Payback

period in Post-recession Economy

Increasingly Stable International Legal and

Regulatory Regime

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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

Force Terrorism; Military action in times of conflict

LegalInternational legal challenges; Foreign courtchallenges to title to minerals

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Thank You