Ch. 1— Summary, Issues, and Options • 15 



OUTLOOK FOR DEVELOPMENT OF 

 SELECTED OFFSHORE MINERALS 



OTA has assessed the potential for near-term de- 

 velopment of selected minerals found within U.S. 

 coastal waters. Costs of offshore mining will deter- 

 mine its competitive position with regard to onshore 

 sources of the same minerals in the United States 

 and abroad. For most offshore minerals, the near- 

 term prospects for development do not appear 

 promising. Although only minor new developments 

 in technology will be required to mine offshore 

 placer deposits or phosphorite, costs for offshore 

 mining equipment are likely to be higher than cap- 

 ital costs for onshore operations. Some of the fac- 

 tors that wUl increase costs include the need for sea- 

 worthy mining vessels and possible requirements 

 for motion compensating devices and navigational 

 and positioning equipment. 



In addition to greater capital costs, operating 

 costs for offshore mining typically will be higher 

 than for onshore operations. Occasional adverse 

 weather conditions will undoubtedly reduce the 

 number of days per year during which mining is 

 feasible. For most offshore settings, mining rates 

 of 300 days per year are considered optimistic. The 

 necessity of transporting to shore (possibly great 

 distances) either raw or beneficiated ore for final 

 processing is another factor that may increase oper- 

 ating costs relative to costs for onshore operations. 

 On the other hand, siting offshore mining equip- 

 ment is easier and less expensive than for onshore 

 facilities. 



Sufficient data are not available with which to 

 make detailed cost estimates of typical future off- 

 shore mining operations. However, first approxi- 

 mations of profitability can provide insights into 

 the competitiveness of offshore relative to onshore 

 mining. OTA has developed mining scenarios for 

 four types of hypothetical marine mineral deposits 

 in areas where concentrations of potentially valu- 

 able minerals are known to occur. The deposits 

 evaluated include titanium-rich sands off the Geor- 

 gia coast, chromite-rich sands off the Oregon coast, 

 phosphorite off the North Carolina and Georgia 

 coasts, and gold off the Alaska coast near Nome. 



Titanium 



OTA's analysis of offshore titanium sand min- 

 ing indicates that it is not very promising in the 

 near term. Nevertheless, there has been some com- 

 mercial interest shown in these deposits. The re- 

 covery of ilmenite alone from an offshore placer 

 does not appear economically feasible and will not 

 be feasible unless primary concentrate can be de- 

 livered to an onshore processing plant at costs com- 

 parable to those incurred in producing the equiva- 

 lent titanium minerals from an onshore placer 

 deposit. To be competitive, the offshore deposit 

 would have to contain considerable amounts of 

 higher valued heavy minerals like rutile (valued at 

 $350 to $500 per ton) or other more valuable 

 minerals, e.g., zircon, monazite, or precious me- 

 tals. Such deposits have not yet been identified. 



Chromite 



Mining and processing chromite-rich sands show 

 results similar to those obtained for titanium. For 

 chromite, revenues of about $125 per ton would 

 be required to realize a 3 -year payback on invest- 

 ment. The average price of low-grade, nonrefrac- 

 tory chromite concentrate imported into the United 

 States during the first half of 1986 was $40 per ton, 

 exclusive of import duties, freight, insurance, and 

 other charges. Production of chromite alone, there- 

 fore, would not meet revenue requirements. The 

 presence of higher valued minerals, such as gold, 

 could improve the profitability of mining offshore 

 chromite sands if revenues from the sale of coprod- 

 ucts exceeded the costs of their separation. 



With excess capacity in the world's ferroalloy in- 

 dustry, it is unlikely that a viable U.S. ferrochro- 

 mium installation could survive foreign competi- 

 tion. It is possible that the Oregon chromite sands 

 might be used for the manufacture of sodium di- 

 chromate, the major industrial chromium chemi- 

 cal. A west coast "green field" plant probably 

 would have to be built for this purpose to offset the 

 transportation costs of shipping to existing east coast 

 chemical plants. 



