of the entire United States. Our minerals policy must be administered by Congress. There is no single agency in the administration that has the complete responsibility for minerals policy to assure a continued and expanding flow of mineral raw materials at reasonable cost from dependable sources.

It is mandatory, therefore, that as a matter of urgency that policies be established, that programs formulated and undertaken, to create the social and economic environment necessary to foster optimum development of our mineral resources within prudent environmental constraints to meet the projected future energy and mineral requirements.

The problems relating to the establishment of a national mineral policy are great, but an international mineral policy will prove to be almost impossible. Anything in the nature of controls as proposed by the United Nations enterprise system, which would establish controls in marketing and pricing will fail. It will fail mainly because of the majority of the countries feel that an international control of this type with respect to their mineral resources are infringements upon their sovereignty and therefore will oppose the policy.

It is possible that with the passage of S. 1134 we will be setting an example in the United States which will be followed by other countries, and thereby we will be taking the first step toward the establishment which may be adopted in other countries, and eventually cause the establishment of an international policy with respect to seabed mineral resources-which will be workable.

Mr. Chairman, in our opinion, S. 1134 is that forward-looking legislation called for by the Secretary of the Interior, and will prove to be a workable piece of legislation with respect to the mining of seabed resources.

The American Mining Congress strongly supports this legislation and urges its prompt enactment.

Now, Mr. Chairman, I would like to introduce our next representative, Mr. Harry Burgess, vice president of exploration, Kennecott Copper Corp.

Senator METCALF. Mr. Burgess, we are pleased and delighted to have you before this committee.

STATEMENT OF C. H. BURGESS, VICE PRESIDENT OF EXPLORATION, KENNECOTT COPPER CORP.

Mr. BURGESS. Thank you, Mr. Chairman.

My name is C. H. Burgess. I am vice president for exploration of Kennecott Copper Corp. I am also a member of the Undersea Mineral Resources Subcommittee of the American Mining Congress.

One of the remarkable developments in the world supply of mineral resources in recent years has been the growth of production of petroleum from offshore wells. This development originated from numerous cases near the edges of continents where the oil-bearing formation and structures extend out from shore, which the oil companies followed into the marine environment by adaptation of the technology that had been so successful on land. Subject to the adapta

tion to the aquatic environment, the methods of exploration, drilling and production are very similar to those employed on land, and, of course, the refining methods are identical.

The legal regimes which apply to the exploitation of offshore petroleum have been related to regimes which existed on land, and which applied to proven technology. In this country, the coastal States have jurisdiction to the territorial limit of 3 miles, and beyond that the Federal Government grants leases under the Outer Continental Shelf Lands Act. The Geneva Convention of 1958, is another element in the legal regime.

The essential fact is, however, that the provision of legal arrangements has accompanied this advancement of technology into the

oceans.

With respect to hard mineral resources, some mining on a very small scale has taken place over beaches and in more recent times at offshore, but still shallow, sites where terrestrial deposits extend across the strand into the ocean. Sand and gravel, for example, are dredged from offshore deposits, and in Southeast Asia there are several tin dredging operations on the continental shelves.

But there has been no operation anywhere which has previously coped with the problems inherent in exploring for, sampling, and evaluating discrete mineral deposits hundreds of miles from land, in water 12,000 to 15,000 feet deep, deposits that are neither marine extensions of those on land, nor even derived from the land; or which has coped with the problems inherent in removing the manganese nodules from their matrix in the ocean bed, gathering and lifting them to a ship 3 miles above to a surface ship for transport to a metallurgical works; or which has economically and efficiently recovered metals in useful commercial forms from these exotic nodular materials.

These tasks can be performed, if at all, only by new technology. That technology is advancing rapidly. Several companies have developed enough expertise in exploration and taken enough thousands of samples and studied the ocean bed well enough to encourage them to apply for claims, or concessions that would grant exclusive tenure of specific areas, if such application were practicable.

Various mining systems have been conceived and several candidate systems are receiving intensive study and trial. Hughes has committed $60 to $70 million for construction of a full-scale mining ship. Deepsea Ventures has spent $20 million in the nodule field, and has demonstrated ocean mining with its own venture. Kennecott has been working on the nodules for more than a decade, and is now operating a pilot metallurgical plant on nodules dredged from the deep Pacific. Other U.S. and foreign companies have participated with the Japanese in tests of a Japanese dredging system for the nodules in the Pacific. West German companies, the French, and the Russians are also exploring ocean mineral occurrences and resources. Most of the ocean activities of foreigners are subsidized, to some degree, by their governments. Such is not the case with U.S. companies. Their expenditures are their own and in the aggregate they are substantial. Very large sums, of course, must be forthcoming

when commercialization is undertaken. Estimates vary, but a single complex from exploration through mining and recovery of metals will probably cost on the order of $250 million.

At present, there are no legal barriers under international law for the removal of manganese nodules from the bed of the deep ocean. Exclusive tenure of a specified area could not be assured, however, and unless such tenure for a long enough period to return the investment and a suitable profit over a period of years is assured, or suitable protection of investment is attained, it is unlikely that the requisite financing would be made available for a U.S. mining operation.

It is essential, therefore, if this important resource is to be utilized, that a satisfactory legal regime or such investment protection be brought into force. A continuing lack of such remedies is certain to inhibit the important work presently under way.

I should like to reiterate that unlike the extension of petroleum production into the marine environment with the concomitant adaption of the legal regime as well as technology, the mining of the manganese nodules requires new technology and accompanying novel legal arrangements. In some cases, a legal regime has the effect of codifying practice. In the exploitation of the manganese nodules there has been no practice and new appropriate legal arrangements must be devised.

The technology is progressing swiftly. The need for legal arrangements such as set forth in S. 1134 is required forthwith. Thank you, Mr. Chairman.

Senator METCALF. Thank you very much, Mr. Burgess. [The prepared statement of Mr. Burgess follows:]

My name is C. H. Burgess. I am Vice President for Exploration of Kennecott Copper Corporation. I am also a member of the Undersea Mineral Resources Subcommittee of the American Mining Congress.

For more than a decade Kennecott has been investigating the possibilities of a profitable mining operation on the nodules of the deep seabed. From the inception it has been clear that if the technical findings should be promising, the existing legal regime would not provide the security of tenure of a mine site that would be required by the investors of the large sums needed for an integrated mining and processing operation. The investigative work has proceeded in the expectation that a satisfactory legal regime would be available when needed.

The Government has been aware of this need. More than six years ago a meeting on ocean mining was held at the Department of State for the purpose of obtaining industry views on ocean mining at that time and forecasts of future developments. Nineteen members of the Executive Branch attended and twenty-three from industry. The discussion was directed to these headings: Technical Forecast, Economic Aspects, LegalPolitical Aspects, and Special Subject as Desired. It was explained that the State Department was under pressure from the U.N. and other sources to participate in the formation of definite rules for ocean mining which would provide for sharing in the proceeds by the Emerging Nations which tended to believe in the prospective values and returns which had been indicated in the preceding year by Ambassador Pardo of Malta.

A guesstimate was made at the meeting that the total being spent by North American companies in exploration in the deep oceans at that time was about $1 million a year. The industry representatives were polled for