16 • Marine Minerals: Exploring Our New Ocean Frontier 



Phosphorite 



The economic outlook for offshore phosphorite 

 mining is not especially promising either. In the 

 past, the United States led world phosphate rock 

 production with onshore mining in northern Florida 

 and North Carolina; now the United States is be- 

 ing challenged by Morocco, which has immense 

 high-grade reserves judged to be capable of satis- 

 fying world demand far into the future. The pros- 

 pect that mining of U.S. offshore phosphorites 

 could successfully compete with low-cost Moroc- 

 can phosphate rock or other possible low-cost for- 

 eign producers is considered remote. However, do- 

 mestic onshore producers have met considerable 

 opposition because of potential environmental dis- 

 turbance and land use conflicts. The offshore ma- 

 rine deposits of North Carolina and other South- 

 eastern States might become more competitive with 

 domestic onshore production in the future if envi- 

 ronmental and land use problems become insur- 

 mountable. 



Gold 



Offshore gold placer mining near Nome, Alaska, 

 appears more promising. In fact, Inspiration Mines 

 has already undertaken pilot mining and is plan- 

 ning to begin full-scale gold mining with a con- 

 verted tin dredge from southeast Asia. Some of the 

 data OTA used in estimating capital and operat- 

 ing costs for this project were provided by Inspira- 

 tion Mines; thus, some of the assumptions used in 

 the gold offshore mining scenario are considered 

 more reliable. 



Assuming the price of gold to be $400 per ounce 

 (a conservative assumption in July 1987, but the 

 price of gold is subject to wide swings), the pro- 

 jected pre-tax cash flow on the estimated produc- 

 tion of 48,000 ounces of gold per year would be 

 approximately $19 million. This figure indicates 

 that the offshore gold mining project at Nome shows 

 good promise of profitability if the operators are 

 able to maintain production. Note, however, that 

 offshore mining will be possible only about 5 months 

 per year, because ice on Norton Sound prohibits 

 operations during the winter months. The dura- 

 tion of yearly ice cover (as well as the fluctuating 

 price of gold) will have a significant effect on the 

 profitability of this operation. 



With the exceptions of sand and gravel 

 and precious metals, the commercial 

 prospects for developing marine min- 

 erals within the EEZ appear to be re- 

 mote for the foreseeable future. 



Sand and Gravel 



The least valuable marine minerals by volume 

 are sand and gravel. However, these resources may 

 have the most immediate competitive position in 

 relation to onshore supplies. Although onshore saind 

 and gravel resources are immense, coarse sand is 

 sometimes hard to find and land use restrictions 

 increasingly prohibit access to suitable resources. 

 Some limited offshore mining of sand and gravel 

 is taking place. Sand and gravel is a high-volume, 

 low-value commodity where short-haul transpor- 

 tation is important. Around high- growth, high- 

 density areas in the Northeast and on the west coast, 

 marine sand and gravel might soon prove profita- 

 ble to mine. 



Deep-Sea Minerals 



OTA did not estimate the potential for near-term 

 exploitation of ferromanganese nodules, cobalt-rich 

 ferromanganese crusts, or polymetallic sulfides. Re- 

 covery of ferromanganese nodules (which include 

 copper, nickel, and liianganese) from the deep 

 seafloor beyond the U.S. EEZ has been studied by 

 the industry, the National Oceanic and Atmos- 

 pheric Administration (NOAA), and the Minerals 

 Management Service (MMS). Prototype technology 

 has been designed and tested, but plans to mine 

 nodule resources in the central Pacific Ocean have 

 been on hold pending favorable economic con- 

 ditions. 



Even less is known about the economic poten- 

 tial for recovery of cobalt-rich crusts (within the Ha- 

 waiian EEZ) or polymetallic sulfide deposits (within 

 the U.S. EEZ off Oregon and northern California) 

 than about the potential for recovery of nodule or 

 placer deppsits. Technology has not yet been de- 

 veloped for mining these deposits nor does suffi- 

 cient information about the nature of the deposits 



