POLYMETALLIC SULFIDES: LAW OF THE SEA IMPLICATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83M00914R001000060035-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 19, 2016
• Document Release Date: February 20, 2007
• Sequence Number: 35
• Publication Date: April 1, 1982
• Content Type: REPORT

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Polymetallic Sulfides:
Law of the Sea Implications
Secret
GI 82-10085
April 1982
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National Security Unauthorized Disclosure
Information Subject to Criminal Sanctions
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Directorate of Secret
Intelligence
Polymetallic Sulfides:
Law of the Sea Implications
An Intelligence Memorandum
Information available as of 20 April 1982
has been used in the preparation of this report.
This p a er was prepared byl
Office of Global Issues. Comments
and queries are welcome and may be directed to
the Chief, Minerals and Resources Branch, OGI, on
Secret
GI 82-10085
April 1982
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Polymetallic Sulfides:
Law of the Sea Implications
0
Key Judgments The polymetallic sulfide deposits recently discovered along rifts in the sea
floor of the eastern Pacific Ocean are a potentially large source of copper,
zinc, silver, gold, platinum, and gallium and a less important source of
other metals like iron, sulfur, and molybdenum. The current US policy
interest in this discovery relates primarily to the attempt of some 150
nations at the Third UN Conference on the Law of the Sea (UNCLOS III)
to forge a comprehensive treaty governing the exploitation of ocean 2 5x 1
resources lying in international waters. This week they will be discussing
the moratorium on seabed mining that the United States objects to.II
The present Draft Convention was largely developed before the polymetal-
lic sulfide deposits were discovered and thus does not adequately treat their
exploitation. The United States is seeking to revise the Convention to
remove objectionable provisions concerning the mining of polymetallic
nodules. Unless precise language is crafted for polymetallic sulfide mining,
regulation would be left to unpredictable action by the International 25x1
Seabed Authority established by the Convention, and exploitation of these
resources would be hindered or delayed.
Cost estimates for polymetallic sulfide mining can be nothing more than
guesses at this point because the technology for mining hard rock at depths
of 2,000 to 3,000 meters is not yet developed. If current relative prices hold
through the 1990s, only deposits with high gold, silver, and platinum
content are likely to be of commercial interest and even these probably
would not be mined before the turn of the century and thus are not likely to
impact soon on world metal markets.
25x1
Early assays-and they are very preliminary-suggest that recovery of
gold, silver, platinum, and gallium, even from only one or two polymetallic
sulfide deposits rich in these metals, might disrupt one or more of their
markets, lower prices, and adversely affect South Africa and the Soviet
Union if the deposits are extensive. Markets
would be much less affected 25x1
Polymetallic sulfide mining would help those countries, including the
United States, bordering the eastern Pacific. The West European countries
and Japan are not as favorably situated with respect to known deposits, but
might use their technological know-how in joint ventures with less
developed nations. France, West Germany, and the United States appear
to be the leaders in deep sea exploration and may be seen as possible
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GI 82-10085
April 1982
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leaders in mining polymetallic sulfide minerals. The United States has an
advantage in hard-rock mining and deepwater dredging technologies that
might be useful
The Soviet Union would certainly want to keep its options open and may
have an interest in mining polymetallic sulfide minerals. Wide publicity
regarding these minerals may explain the increased Soviet interest in
oceanographic research and mining technology and the more appreciative
attitude the Soviets have toward the US position at UNCLOS III
This week they gave their enterprises equal legal footing with their
Western competitors by issuing a decree allowing them to make claims and
initiate prospecting. If UNCLOS III fails to produce a treaty, Moscow
may join the West in a reciprocating-states a reement on seabed minin .
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Polymetallic Sulfides:
Law of the Sea Implications
0
One of the significant shortcomings of the current Draft Convention on the
Law of the Sea is the moratorium it would impose on the development of
polymetallic sulfides, recently discovered metals in the international areas
of the oceans. There is no question concerning jurisdiction over sulfide
deposits or other resources falling within 200 miles of land, for they would
clearly be the property of the coastal state. The Draft Convention does not
expressly prohibit the development of sulfide deposits by name, but it does
not allow development until such time as the proposed International
Seabed Authority is established and then adopts rules and regulations
governing the development of minerals other than polymetallic nodules.
This moratorium and the flawed texts on mining nodules have been
identified as the major segments of the treaty text in need of revision if the
LOS treaty is to be signed and ratified by the United States
Metals of Primary The first deposit of polymetallic sulfides was discovered in 1978 by a joint
Interest French-American-Mexican exploration of the East Pacific Rise, a seafloor
ridge located off the western coast of Latin America. Since that initial
discovery, deposits of these minerals have been found at other sites along
this ridge and on the Juan de Fuca Ridge off the coast of the state of
Washington. Marine geologists are confident that additional deposits occur
at selected sites along the fast- and medium-fast-spreading portions of the
entire 72,000-kilometer globe-encircling midocean ridge. They increasingly
suspect that deposits also lie along lesser rifts in the Western Pacific. These
latter deposits, however are deeper and covered with sediment makin
them less accessible
25X1
All of the known deposits appear to be important because of the variety
and high content of the minerals each contains as compared to alternative
land-based mineral deposits. Each deposit is rich in sulfur and iron, and
one or more have been found to contain relatively high concentrations of
copper, zinc, silica, silver, gold, platinum, molybdenum, and gallium. The
existence of deposits rich in still other metals cannot be ruled out.
Development of any one deposit, therefore, may provide more efficient
access to a wide variety of important metals than would exploitation of
corresponding land-based resources. However, because little is known of
the extent of the polymetallic sulfide deposits, the cost of exploiting them,
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Plate Tectonics and Polymetallic Sulfides
The theory of plate tectonics, developed in the 1960s, postulates that the
earth's crust is composed of a dozen or so thin, rigid, adjoining plates that
are in constant motion-thrusting against, grinding, and overriding one
another like polar ice flows. Certain of these plates adjoin at the midocean
ridge where they move away from one another at varying rates. The East
Pacific Rise and the Mid-Atlantic Ridge are segments of this structure.
Molten rock, the source of the sulfide deposits, rises from the earth's
depths to the surface of the seabed, adhering to the edges of the diverging
plates and forming new crust. After it hardens, the new crust is fractured
and faulted by the stress of plate movement, particularly where the
seafloor is spreading at medium to fast rates (6 to 18 cm per year).
Seawater is heated to nearly 400 degrees Celsius as it percolates
downward along these fractures toward the chamber of molten rock. This
superheated water then rises, dissolving minerals from the newly formed
crust as it goes. Contact with the cold water at the surface of the seafloor,
precipitates the dissolved minerals as metallic suedes along the flanks of
the midocean ridge.
The first discovery of these sulfides came as a surprise in 1978.
Subsequent expeditions were planned, based on an understanding of the
natural processes that formed such deposits. In addition to the finds on
the Juan de Fuca Ridge about 250 miles west of the state of Washington,
near Easter Island, and just south of Baja California, deposits have been
charted on the Gorda Ridge about 85 miles west of Oregon, in the
Guaymas Basin in the Gulf of California, on the East Pacific Rise east of
Clipperton Island, and in the Galapagos Rift. The last deposit, located at
a depth of 2,500 meters in the finger of international seabed that separates
the 200-mile economic zones off Ecuador's mainland and the Galapagos
Islands, is the most massive. Estimated to be 40 meters thick, 300 meters
wide, 1,000 meters long, and 25 million tons in weight, it contains perhaps
$2 billion worth of copper and lesser amounts of other metals, including
silver, cadmium, iron, molybdenum, lead, tin, vanadium, and zinc.
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or the political-economic environment in which exploitation would occur,
the economic potential of this resource is uncertain. A few judgments seem
clear:
? The iron and silica are economically unimportant because of their low
concentration compared to that found in widespread land-based sources.
? Sulfur would be extracted only as a byproduct to minimize pollution in
the processing of the sulfides.
? The copper, zinc, and molybdenum, although also widely available
elsewhere, have large markets, could be easily processed, and therefore
would be among the metals exploited if of metallic sulfide mining
proves to be cost effective
The main interest in polymetallic sulfide ores is likely to center on the 5X1
precious metals (gold, silver, and platinum), vanadium, and gallium:
? Gallium, now available only in limited quantities, is used primarily in
electronic devices and is being developed as a possible substitute for
silicon in chips for integrated circuits.
? Recovery of gold and platinum from large deposits rich in these metals,
could well be profitable even if investment and operating costs were
relatively high.
? Silver would be important but to a far lesser extent.
Moreover, because platinum and to a lesser extent vanadium have strategic
uses, their extraction from polymetallic sulfide ores would be es eciall
important
25X1
The Legal Regime Ocean resources will be mined under two legal regimes, a national regime
for deposits lying within a nation's 200-mile coastal economic zone and an
international regime for deposits lying beyond the zone. However, the
international regime has yet to be established. The Third UN Conference
on the Law of the Sea (UNCLOS III) has been negotiating a seabed
regime since 1972 that would put all exploitation of seabed minerals lye'
beyond national jurisdiction under the control of a proposed Inter
Seabed Authority (ISA).
The provisions for mining polymetallic nodules under this controversial
regime, as embodied in the Conference's Draft Convention on the Law of
the Sea, are presently unacceptable to most industrial states because of the
requirements for burdensome revenue sharing, technology transfer, and
production limits coupled with uncertainties regarding control over ISA
decisions. The Draft Convention is further flawed because it deals
specifically only with exploitation of the polymetallic nodules; the only
hard minerals of the seabed known when UNCLOS III began. Addition ?1
ly, the Draft Convention would implicitly establish a moratorium on the
development of polymetallic sulfide deposits.
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The current seabed texts would prohibit the development of seabed
resources other than polymetallic nodules until specifically regulated by
the ISA. First, the texts define all solid, liquid, or gaseous mineral
resources at or beneath the seabed in the international areas of the oceans
as the "common heritage of mankind," thus assuring that they come under
the domain of the ISA. Elsewhere, it is made clear that until the Seabed
Authority adopts rules and regulations governing exploration for and
exploitation of the various classes of resources, it cannot accept or process
mining applications for those resources, thus effectively blocking their
development. To make matters worse, the Authority would be granted the
right to limit the levels of production of such minerals as polymetallic
sulfides when and if it ever allowed commercial extraction to commence.
Developing countries are as concerned as the United States about these
minerals because, even if not affected by nodule production, they might
benefit or be harmed by the eventual discovery and possible exploitation of
other minerals. It is safe to assume that, although the issue of the
moratorium has received far less attention at the Conference than the
nodule question, it would be equally difficult to correct. Failing agreement
on a comprehensive oceans treaty, industrialized states which possess the
capital and can develop the technology required to exploit such resources
might have to turn to an alternative legal strategy such as a minitreaty to
serve as the underpinning for polymetallic sulfide mining. As in the case of
the proposed Reciprocating States Agreement for nodule mining among
the United States and other industrial nations, such a course would be
strongly criticized and perhaps challenged legally by the developing
countries.
The Realities of Even if these institutional problems were resolved rapidly, polymetallic
Mining Polymetallic sulfide mining would not be likely to occur soon. Three to five more years
Sulfides of basic research are needed before the size and richness of this resource
can be determined. Exploration of specific minesites by interested parties
would normally also take three to five years. Development of the mining
technology could start at the same time but, under normal conditions,
would not be completed before the mid-1990s. Until then, commercial
enterprises would not be able to make final decisions on specific minesites
they wish to exploit, the methods of recovery, the most economic operating
scale, the location of processing facilities, and other options. Another five
or six years might subsequently be required to assemble the necessary
capital equipment and facilities. As a result, the first commercial exploita-
tion of polymetallic sulfide deposits would not be likely to occur before the
end of the century.
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land-based sources.
This timetable would be further delayed if any conflict developed in the
creation of the legal-political framework needed or if the return on
investment appeared insufficient. In either case, investors would continue
to exploit available land-based mineral deposits offering attractive rates of
return. Platinum and vanadium are often considered of strategic impor-
tance, but government assistance to ocean sulfide mining to obtain them
would depend on the status of their continued availability from existinnx1
Given the recovery rates attainable with current processing technology (75
to 90 percent) and the lower price levels likely to result from marketing the
polymetallic sulfide metals, only those deposits high in precious-metal
content would be likely to attract commercial interest. These, however,
might be so profitable to exploit that commercial development could
proceed more rapidly than usual, even in the face of relatively high costs
and reduced metal prices, if the legal-political framework were favorable.
1 ?_5X1
Mining
The capital and operating costs of mining and transporting the polymetallic
sulfide ores will depend greatly on the technology used. Some of the
equipment and techniques required may already be available, but they
have not been tested at the depths involved. More likely, an entirely new
technology would have to be developed from scratch to meet the needs of
mining hard rock at depths of 2,000 to 3,000 meters in the open ocean.
Given these conditions and the environmental limitations that may be
imposed, the capital and operating costs of mining polymetallic sulfide
deposits would probably be great. 2541
Although current estimates of the cost of mining polymetallic nodules from
the seabed are very tentative and involve totally different minerals,
techniques, and equipment, they may provide some perspective on costs of
mining and transporting the polymetallic sulfide minerals. A 3-million-ton-
per-year nodule operation is likely to require around $200 million in
preinvestment costs, some $300 million in capital costs, and $50 million in
annual operating expenses for mining and transportation alone.' While this
involves the movement of four to five times the material that would be han-
dled by a I -million-ton-per-year polymetallic sulfide operation, the latter is
likely to be more difficult because it involves drilling or blasting into rock
at great depths
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Mining Polymetallic Nodules Versus Polymetallic Sulfides
Exploiting polymetallic nodules or sulfides involves basically similar
tasks prospecting and exploration, technology development, capital in-
vestment, and operations. The last includes collecting the materials on the
seafloor, raising them to the surface, transporting them to processing
facilities, and extracting the desired metals from the ores.
The problems that must be solved in the two projects, however, are quite
different. The nodules are potato-size lumps of minerals scattered on or
buried slightly below the surface of vast areas of the ocean floor. They
must be scooped up in some systematic way. Because the nodules are
small, they can be raised in a steady stream, either by pipe or bucket, or
stored until an appreciable quantity is collected and then raised by a
vehicle or lifting device. Few environmental problems are foreseen with
this part of the operation. Nevertheless, the technology required can get
quite involved; it has been under development for more than a decade and
is still not perfected. Once raised, the nodules would be transported in a
slurry to shore processing facilities. Because the desired metals-copper,
nickel, cobalt, and manganese-are tied up in oxides, modifications of
existing techniques and new approaches are being developed to extract
them. They are costly and represent the major portion of the total cost of
exploiting polymetallic nodules.
The sulfide deposits, on the other hand, are either crusts or blocks of rock
located close to rifts in the ocean floor. Hence, they may be approached
much as a conventional land-based ore deposit, except that they lie at
depths of 2,000 to 3,000 meters in the open ocean. Lifting the ore to the
surface may require blasting or other procedures for breaking up the rock.
This may create environmental problems. In any case, the methods and
equipment needed to collect and raise sulfide minerals to the surface are
probably not available and would have to be developed.
Once on the surface the suedes must be transported to shore facilities, a
process that should pose no problem. Neither would the extraction of the
minerals. Inasmuch as the sulfide ores are quite similar to those found in
land-based deposits that have been exploited for years, the necessary
technology is already available. Very possibly the polymetallic sulfide
metals could be extracted in existing smelters and refineries, thus
minimizing the capital investment needed. This would more likely be true
of US, Canadian, and Japanese mining. Other interested parties may have
to invest in facilities in countries bordering the Eastern Pacific or make
arrangements for their ore to be toll processed in existing facilities in
these countries.
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Processing
The technology needed to process the polymetallic sulfide ores is available.
These ores are similar to sulfides from land-based sources that have been
exploited for centuries. Indeed, it may be possible to smelt and refine the
metals in existing facilities, thereby forgoing the need for expensive capital
investment. That is, it may well be cheaper to transport concentrate tx1
existing facilities in the United States than to build new ones in Hawaii,
Mexico, Peru, Chile, or on a Pacific island.
Market Impact
The only certainty with respect to polymetallic sulfide mining is that it is
quite probably a long way off and will not be a source of metal to
supplement land-based supplies in the near future. Judgments with regard
to the market impact of any mining ventures are therefore of necessity
tentative. It is likely, however, that when the appropriate technology is
commercially available and the legal regime has been satisfactorily
resolved, attention will focus first on those deposits both large and high in
precious-metal content. The amount of precious metals likely to be
obtained might make a mining venture economically attractive even if the
venture were expensive and the increased supply of precious metals were
sufficient to weaken the markets for those metals.
Indeed, the recovery of gold, silver, and platinum from deposits highjgxi
their content would likely drive prices down. The producers of silver-
which today include the United States, Canada, Mexico, Peru, Poland, the
Soviet Union, and Australia-would be adversely affected. However, silver
output represents only a small part of all economic activity in these
countries and is likely to diminish in importance over the next two decades.
Therefore, while individual interests might be damaged by polymetallic
sulfide silver output, no one country would be hurt significantly. As regards
gold and platinum, the market impact of polymetallic sulfide mining could
have negative consequences for both South Africa and the Soviet Union.
Gold production is the largest single economic activity in South Africa-in
1979 accounting for some 12 percent of gross domestic product, 38 percent
of all exports, and 74 percent of the trade surplus and making the 25x1
difference between a large deficit and a large surplus in the country's
current account. In 1981 gold sales of more than $2.5 billion amounted to
over 60 percent of the USSR's hard currency deficit
Along with the precious metals, a mining venture could produce a quantity
of other metals such as gallium, copper, zinc, molybdenum, and vanadium.
Expansion of the supply of gallium could lead to major new uses for this
rare metal. For example, it could replace silicon in the integrated chips
needed for high-speed computational devices. The markets for the other
metals would be affected only if the ore content were relatively high and
the number of minesites worked were very large. In this case the prices of
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these metals would decline to some extent, perhaps even forcing the closing
of some of the higher cost private land-based mines for these metals. In the
copper industry these would be primarily in the United States, Australia,
and Peru. However, a lower price would benefit consumers, most of whom
are in the advanced industrial countries.
The United States, France, and West Germany are the leaders in research
on midoceanic ridges and polymetallic sulfide deposits. They would most
likely lead the way in developing the technology necessary to exploit these
deposits. The West European countries, not well situated for such exploita-
tion, would probably form joint ventures with countries that border the
Pacific-such as Mexico, Chile, Venezuela, Peru, or Ecuador-in order to
minimize transport costs and take advantage of local energy resources.
These latter countries, along with Canada, are almost certain to find their
mineral industries enhanced by the exploitation of polymetallic sulfide
deposits along the East Pacific Rise. Mexico and Ecuador would especially
benefit by reason of their proximity and the energy resources that they
could contribute to the processing of the polymetallic ores.
US Interests Polymetallic sulfide deposits are of current interest primarily because of
the role they might play in the present Law of the Sea debates. If the Con-
ference does not craft a clear text on the mining of these metals, a Draft
Convention could go into the lengthy ratification process without polyme-
tallic sulfide mining rules and regulations. These would have to be added
by amendment later, and mining could be delayed until their adoption.?
The US lead in hard-rock mining and deepwater dredging technologies
might afford it an important advantage in the exploitation of polymetallic
sulfide minerals. But environmental considerations are likely to discourage
any processing of these ores on the west coast, and transport to facilities in
the interior may be costly. The latter are old and themselves environmen-
tally troublesome. Metal markets have not been robust enough to warrant
costly pollution control programs, and copper and zinc companies claim
that they will close their smelters and refineries, shifting this processing to
other countries, rather than retrofit them. If the more highly profitable
ocean sulfide deposits are exploited, the copper and zinc extracted as a
byproduct might help revitalize these US industries. Also, exploitation of
polymetallic sulfide minerals could considerably reduce or eliminate US
dependence on imports of many of the metals found in the deposits,
including, in the case of platinum and vanadium, a potentially dangerous
reliance on South Africa and the Soviet Union
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The United States and its allies could find the Soviet Union a well-
prepared competitor in mining ocean sulfides. The Soviet Union is largely
cplf-cnffirient in the metals found in the volvmetallic sulfide deposits.
Moreover, the USSR has also recently
adopted a slightly more favorable attitude toward US objections concern-
ing the current LOS Draft Convention. There are even indications that the
USSR might not accede to the Convention unless the Western industrial
countries and Japan do so. At this time Moscow's principal interest i~5x1
probably to preserve its options with respect to any minerals that m'
available from the seabed.
The Soviet decree on seabed mining issued this week allows its enterprises
to stake claims to seabed mineral deposits lying in international waters;
prospecting and mining will not be allowed until 1 January 1988. By this
act, the Soviets are putting themselves on an equal footing with the
industrial nations that have already adopted similar national legislation.
Now, Soviet firms may establish property rights as Western firms may now
do. If UNCLOs III fails to produce a treaty, Moscow might join the West
in a reciprocating-states agreement
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