New rules for undersea mining

New Rules For Undersea Mining

September 01, 2000 | By Noam Ayali in Washington, DC

Regulations issued by the International Seabed Authority this summer set new rules for undersea mining of manganese, nickel, cobalt and copper. The new rules apply to such mining in international waters.

The International Seabed Authority is an autonomous organization established in 1994 to help implement a 1982 United Nations Convention of the Law of the Sea. At this writing, 133 countries have ratified the convention, and another 49 countries – including the United States – are “observers.” The convention and the regulations implementing it are considered part of international law.

The seabed authority is expected to turn next to regulations on undersea mining of massive sulphides, concentrated around undersea volcanic hot springs, and ferromanganese crusts, lying along ocean ridges at boundaries between tectonic plates. Work on these is expected to start next year.

The new regulations contain several provisions of particular interest to mining companies looking for manganese, nickel, cobalt and copper on the ocean floor.

Mining Claims

The regulations provide that “prospecting” – or searching for nodules on or just below the surface of the deep seabed that contain manganese, nickel, cobalt and copper – does not give rise to any exclusive rights. Nodules containing these materials are called “polymetallic nodules.”

Mining entities and consortia should be aware that prospecting on the seabed and ocean floor is different than similar activities on land. Under most legal jurisdictions, a mining license or concession for a certain area of land confers upon the license- or concession-holder the exclusive right to conduct prospecting activities in the area. However, under the regulations, prospecting on the ocean floor does not confer on the prospector any rights over the resources. Moreover, the regulations provide that prospecting may in fact be conducted simultaneously by more than one prospector in the same area.

A mining entity involved in prospecting can only get exclusivity rights once it enters into a contract with the International Seabed Authority for “exploration,” which is defined as the search for deposits of polymetallic nodules, the analysis of such deposits, the testing of collecting systems and equipment, processing facilities and transportation systems, and the carrying out of studies of environmental, technical, economic, commercial and other appropriate factors that must be taken into account in exploitation. At this stage, the mining entity or consortium receives exclusive rights to explore an area covered by a plan of work for exploration.

It is important to understand that the exclusivity granted is not for the physical area, but for exploration of the specific polymetallic nodules in the area.

The regulations leave open the possibility that other contractors may be granted rights in the same area, but for different resources. However, the seabed authority is required to ensure that no other entity operates in the same area for other resources in a manner that would interfere with the operations of the contractor. As part of the protections granted to a contractor, the regulations grant the contractor a preference and priority among applicants submitting plans of work for exploitation of the same area and resources. However, this priority and preference may be withdrawn by the seabed authority if the contractor fails to comply with the requirements of its approved plan within the time period specified in a written notice from the seabed authority to the contractor specifying the noncompliance.

Another interesting aspect of the regulations is the requirement for mining entities to obtain a certificate of sponsorship from the country where they are incorporated or by whose nationals they are controlled. The main purpose of the certificate of sponsorship is a declaration by each such sponsoring country that it assumes responsibility to ensure that seabed and ocean floor mining activities, whether carried out by the country itself, a state enterprise, or a private entity, are carried out in conformity with the relevant part of the 1982 United Nations Convention on the Law of the Sea and its annexes. The law-of-the-sea convention imposes liability on countries for damages caused by their failure to carry out that responsibility. However, there is no liability if a country has taken “all necessary and appropriate measures to secure effective compliance under” the relevant convention provisions. Neither the convention nor the regulations elaborate on what a country must do to satisfy the requirement of “all necessary and appropriate measures.” This could be a problem if and when the seabed authority ever tries to enforce this liability.

Environmental Protection

Environmental protection is one of two areas to which the seabed authority had to devote the most time when writing the regulations. (The other is the issue of confidentiality of data and information.) A particularly sensitive provision of the regulations is the one that requires each contractor to provide a guarantee of its financial and technical capability to comply promptly with emergency orders from the seabed authority in order to allow the authority to take necessary emergency measures of environmental protection. If the contractor does not provide such a guarantee, the sponsoring country is required, in response to a request from the authority, to take necessary measures to ensure that the contractor provides such a guarantee or to ensure that assistance is provided to the authority in the discharge of its responsibilities.

The regulations do not provide any specific guidance as to the type and scope of the required guarantee from the contractor, nor do they provide any guidance as to the “necessary measures” that a country is required to take to “ensure” that the contractor provides such a guarantee. Recognizing that this lack of specificity could be a problem in the future, the authority’s governing council, in a separate decision, decided to consider the matter of a guarantee prior to the phase of testing of collecting systems and processing operations for the exploitation of polymetallic nodules, with a view to adopting appropriate forms of guarantee, and requested the authority’s secretariat to carry out studies of appropriate instruments or arrangements that may be available for this purpose and to report back.


Confidentiality of data and information was another key part of the regulations that received special attention. The regulations provide that information submitted by any person participating in any activity or program of the seabed authority that is designated by such person as confidential shall be treated as confidential unless the information falls in one of the following categories:

  • The information is generally known or publicly available from other sources.
  • It has been previously made available by the owner to others without a confidentiality obligation.
  • It is already in the possession of the seabed authority with no confidentiality obligation.

Unlike some confidentiality arrangements under oil and gas production sharing regimes or mining agreements, which run for the life of the production sharing or mining concession, in this case the regulations provide that 10 years after the earlier of submission of the confidential information or the expiration of the contract for exploration, and every five years thereafter, the seabed authority will review information submitted to it as confidential to determine whether it should remain so. Information will remain confidential if the contractor establishes that there would be a substantial risk of serious and unfair economic prejudice if the information were released.