308 • Marine Minerals: Exploring Our New Ocean Frontier 



wealth Minister for Resources and Energy and a 

 State Mines Minister.* The adjoining State Min- 

 ister supervises day-to-day administration and 

 serves as an industry contact. The Commonwealth 

 minister is consulted on important issues and has 

 the final authority in cases of disagreement.' 



Permit Process 



• Exploration: If a company wishes to explore for 

 minerals (defined to include sand, gravel, clay, 

 limestone, rock, evaporates, shale, oil-shale, and 

 coal, but not petroleum'") in the ocean, it must ap- 

 ply to the Designated Authority (a State Minister 

 charged with the responsibility by that State's 

 Parliament") for an exploration permit. If the area 

 of the application is on the seaward side of the outer 

 limit of the territorial sea, the Joint Authority de- 

 cides whether or not to grant the permit.'^ The ap- 

 plication must be accompanied by a work and ex- 

 penditure plan, and information regarding the 

 technical qualifications of the applicant, and tech- 

 nical advice and financial resources available to the 

 applicant.'^ 



• Exploitation: Same'* 



Terms 



Exploration: A fee of $3,000 (Australian dollars) 

 is charged for an application to explore any num- 

 ber of blocks less than 500 (A block is bounded by 

 adjacent minutes of longitude and latitude). The 

 permit lasts for 2 years, and gives the right to ex- 

 plore and take samples of specified minerals.'^ A 

 permit can be renewed 4 times, for up to 2 years 

 each time, for up to 75 percent of the area in the 

 permit being renewed. An application must be ac- 

 companied by a report on past and projected work 

 and expenditures and a fee of $300."' 

 Exploitation: Application for a production license 

 is done in a manner very similar to that for an ex- 

 ploration permit. Once granted, it lasts for 21 

 years. An annual rent of $100 per block is charged. 

 Royalty rates are set by the Joint Authority; the 

 value of the exploited mineral may be considered 

 in setting the rate." Within the territorial sea. 



"1981 Minerals (Submerged Lands) Act, Section 8. 



'Hlubucek, op. cit. 



'"1981 Minerals (Submerged Lands) Act. Section 3. 



"Hlubucek, op. cit. 



'^1981 Minerals (Submerged Lands) Act, Section 23. 



'=Ibid., Section 24. 



"Ibid., Sections 31 and 32. 



"Ibid., Sections 26 and 27. 



"Ibid., Sections 28 and 29. 



"Ibid., Sections 31-35. 



royalties are shared with the Commonwealth.'^ An 

 application for a permit renewed must be accom- 

 panied by a $300 fee.'^ 



There is no competitive allocation mechanism 

 in the unproclaimed Minerals (Submerged Lands) 

 Act as it stands. However, at the recent meeting 

 of Commonwealth and State officials, it was agreed 

 that provisions should be made for competitive al- 

 location. Generally, permits will be allocated on a 

 first-come basis. In cases where some competition 

 is needed, competitive allocation will generally use 

 a work program bidding system, but provision for 

 a cash bidding approach is being considered. 



The Minerals (Submerged Lands) Act does not 

 contain a royalty regime. At the officials' meeting, 

 it was agreed that the endorsement of Ministers 

 would be sought for the adjacent state to apply their 

 onshore royalty regime to minerals won from the 

 sea bed within the outer limit of the territorial sea. 

 For minerals won from the sea bed on the seaward 

 side of this limit, the commonwealth intends to ap- 

 ply a profits-based royalty. State royalties vary with 

 the state and the mineral concerned, and in some 

 cases profits-based royalties may be used, in other 

 cases ad-valorem royalties or set tonnage rate royal- 

 ties may be set. However, this does not preclude 

 the states from opting for a profits-based royalty. 



Conditions 



Unreasonable interference with navigation, fishing, 

 conservation of resources, and other lawful operations 

 is prohibited.^" Environmental assessment is generally 

 the concern of the adjacent state. However, where min- 

 ing impinges on commonwealth functions, assessment 

 may be required by the appropriate commonwealth au- 

 thority (there are arrangements to ensure that the assess- 

 ments can be carried out jointly in most cases). 



Section 105 further delineates regulations which the 

 Governor GenersJ may promulgate under this law, con- 

 cerning matters such as safety and conservation.^' 



Activities 



Australia has explored for tin, monazite, phosphorite, 

 rutile, and zircon. ^^ Private companies have been granted 

 exploration licenses under current state onshore min- 

 ing acts for aggregate and mineral sands off the coast 



'^Hlubucek, op. cit. 



'"1981 Minerals (Submerged Lands) Act, Section 36. 



"Ibid.; Section 75. 



"Ibid. 



^'P. Hale and P. McLaren, "A Preliminary Assessment of Unconsolidated 

 Mineral Resources in the Canadian OfTshore," The Canadian Mining and 

 Metallurgical Bulletin, September 1984, p. 10. 



