30 
After the CIA coverup story came out, Paul Reeve, general man- 
ager of the Summa Corporation, stated: “This equipment was devel- 
oped as a prototype mining ship, and this is its objective.” ** Mr. Reeve 
is also reported to have acknowledged that extensive tests of the 
Hughes mining system still need to be concluded before he could make 
any predictions as to when Summa might actually produce nodules 
from the ocean floor. 
Jack Flipse, president of Deepsea Ventures, regards the Summa 
Corp. as a legitimate mining interest which took on a related assign- 
ment for the CIA. He was reported to observe that up to about a year 
and a half ago, the company was working hard on its technology for 
processing manganese nodules. Suddenly, their efforts in that area 
ceased and the only reports of the Hughes ocean mining activities 
that surfaced were those concerning the ship and barge system design.** 
INTERNATIONAL CONSORTIA 
The recent trend of many firms to form international consortia to 
mine the ocean floor is claimed to have many advantages. In the ab- 
sence of an international agreement regarding exploitation of the deep 
seabed, one advantage is broadened government support. Other ad- 
vantages include the benefits of diverse capabilities, pooled invest- 
ments, and shared risk. 
The first international consortium to be formed for commercial 
exploitation of manganese nodules was the Kennecott group. This 
consortium, formed in January 1974, plans a $50 million five-year 
research and development program to determine the feasibility of 
mining ferromanganese nodules from the deep seabed and extracting 
metals from them.?> The operation will be managed by Kennecott 
Copper Corp. which has a 50 percent interest in the venture. A por- 
tion of Kennecott’s interest is derived from the value assigned to its 
prior experience in deep seabed mining. The group is composed of 
two British firms, Rio Tinto Zine Corp. with 20 percent interest and 
Consolidated Gold Fields Ltd. with 10 percent interest, the Japanese 
Mitsubishi Corp. with 10 percent interest and Noranda Mines Ltd. 
of Canada with 10 percent. A loan of up to $1.8 million has been 
offered to the British firms by the British government to be repaid 
when the venture first becomes commercial. 
The second U.S. firm to announce participation in an international 
consortium to mine ferromanganese nodules was Tenneco’s Deepsea 
Ventures, Inc. The initial members of this consortium were all Japa- 
nese trading firms: Nichimen Co., Ltd., C. Itoh and Co., Ltd., and 
Kanematsu-Gosho, Ltd.1® The Consortium was reorganized in Novem- 
ber 1974 to provide a wider base of international support. Two new 
members included Essex Iron Co. (wholly owned by United States 
Steel) and Union Mines, Inc. (wholly owned by Union Miniere, S.A. 
of Belgium). Ownership is set up as follows: private investors in 
Deepsea Ventures to have 5 percent; Tenneco to divide the remaining 
95 percent equally four ways (if all options are exercised) among 
itself, the two new members, and Japan Manganese Nodule Develop- 
18 Ocean Science News. Mar. 21, 1975, p. 1. 
14 Tbid., p. 1. 
1° Oceanography Newsletter, v. 9, No. 3, Feb. 4, 1974, pp. 1-2. 
16 Oceanography Newsletter, v. 9, No. 9, May 13, 1974, p. 1. 
