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Your problem is whether or not you can produce it at a profit. If you 

 are a marginal producer you can be forced out by relatively small 

 changes in the price structure. 



Our problems have to do in sequence with, first of all, obtaining 

 concession areas, carefully sampling them, and working out the long- 

 term economic forecast for the minerals ; for example, what will the tin 

 market be 10 years from now? What will be the available smelter 

 capacity ? Who are the big buyers of it ? Will something replace tin ? 

 That kind of problem. 



Having determined that there is a market at some fixed price, one 

 has to have a concentrating method which will save some part of what- 

 ever mineral is dredged up from the sea floor. 



The modern undersea dredging requires a recovery plant which will 

 pick up on the order of 10,0U0 cubic yards a day. This is a lot of ma- 

 terial. You must run it through a plant very fast and throw it over- 

 board, otherwise you will sink yourself with this large amount of in- 

 coming mud and water. 



Having determined there is a feasible method for lifting the ma- 

 terial and for processing it onboard, your next major problem is the 

 amortization rates of the dredge — considering the tax situation in the 

 particular country that one is working in. 



In each country we have a slightly different deal. In the main the 

 deal is like this: "We take up a concession, usually at no cost. You 

 don't pay a fee except a tiny registration fee to the local government. 

 In return for their giving you a large undersea area you agree to 

 spend so many dollars in prospecting it. 



Usually the arrangement is that one turns over all the information 

 obtained to the government — who under some circumstances will keep 

 it secret for a couple of years if you ask them to but usually that is not 

 important. Then you have some prearranged deal that if you find 

 mineral deposits which can be called ores— ore, by the way, is a mineral 

 that can be mined at a profit — if you find something that appears to 

 you to be profitable, then you have some prearranged business deal 

 with that government which says that you agree to mine at some stipu- 

 lated rate and that you get your mining costs back and then you split 

 the profits in some such fashion with the local government, which their 

 profit also includes taxes and whatever else they get out of your opera- 

 tion. You split in some fashion, perhaps about 50-50 with the local gov- 

 ermnent. That is a normal arrangement these days in undersea mining. 



We are not exactly mining at this moment, although we have gone 

 through a great many studies like this. Our company, though it be quite 

 small, has had very good luck in arranging consortia with very major 

 corporations around the world. 



In our Tasmanian tin adventure, last year we spent about $700,000 

 of our own money down there in a consortium which included major 

 British and South African companies, a Tasmanian company and an 

 American company besides ourselves. 



We pooled our money and interests and we came close to developing 

 a mine there. It was marginal, considering our knowledge of the busi- 

 ness, and we may come back to it later. At the moment we have put it 

 aside in the hope of finding better deposits in other countries. 



At present we have one major concession in Indonesia, as part of a 

 British group. We are the only American company. The others repre- 

 sent Australia, England, and South Africa. 



