that will encourage industrial exploration. It is 
further recommended that such a system be 
similar to the type of concession system described 
above. Uniformity in State laws is not considered a 
necessity at this time, but efforts to work toward 
uniformity are highly desirable. When changes in 
the Federal system are adopted, they could serve 
readily as a model law for the coastal States. 
The panel does not believe that the lack of 
international agreement as to sovereign rights over 
deep sea mineral resources is a major factor 
preventing mining operations at this time. How- 
ever, a Clearer definition of the limits of National 
jurisdiction and an international agreement for the 
deep ocean will be needed as conflicts arise. 
Accordingly, the panel concurs with the Inter- 
national Panel in its recommendation that the 
United States take the initiative in proposing a 
new international legal-political framework for 
exploring and exploiting the mineral resources 
underlying the high seas. 
Only with strong U.S. participation can the best 
interests of domestic industry and the world 
community be served. Due to the length of time 
normally needed to establish such a complex and 
important framework, the panel recommends that 
the United States take this initiative immediately. 
Until such a framework is established, the U.S. 
Government should encourage and protect private 
investment in the deep ocean. 
2. Surveys 
Geological knowledge of the U.S. continental 
shelves is insufficient to provide a basis for wise 
management of the mineral resources and is 
insufficient to assist industry in selecting target 
areas for detailed exploration. 
Obtaining an adequate understanding of the 
geologic structure and composition of the conti- 
nental margins is a vast job. Companies expect to 
spend large sums of money conducting surveys to 
delineate deposits, but first need some indication 
where to concentrate their efforts. Broad, recon- 
naissance scale surveys are too expensive for 
individual companies, considering the vast area to 
be covered and the low probability of discovering 
economically exploitable minerals. Yet these sur- 
veys are a critical first step in determining the 
basic character of the shelf and in pointing the 
way for eventual utilization of the offshore min- 
eral resources. 
Earlier in the report a survey program was 
recommended to provide new bathymetric, geo- 
physical, and geological information on the Conti- 
nental Shelf, slope, and rise. Completion of this 
task was suggested in 15 to 20 years, but because 
certain areas are of more immediate interest, it is 
recommended that priorities be carefully selected 
to reflect user needs and that the survey of these 
more important areas be completed much sooner. 
Except in special cases, the surveys should remain 
reconnaissance in scope, and the actual delineation 
of commercial deposits should be left to private 
industry. A significant portion of the survey work 
should be contracted to qualified organizations in 
the private sector in order to build a National 
capability and speed up data acquisition. 
3. Other Recommendations 
Before a thriving offshore mining industry can 
exist, an enormous capital investment will have to 
be made. The resulting risk levels are within 
boundaries acceptable to industry, but the pace of 
investment will be slow in the early stages. There 
are several ways the Government can assist indus- 
try in facing the initial risks: 
—Nominal rentals and low or non-existent royalty 
payments have been mentioned as ways to encour- 
age ocean mining. In addition, there are precedents 
in foreign countries for encouraging mining 
through special tax incentives. The panel has not 
made a recommendation for a specific type of tax 
incentive, but urges consideration of one or more 
of the following: 
(a) A tax moratorium for a specified number of 
years. 
Extremely rapid depreciation for ocean min- 
ing equipment, which can be justified on the 
basis of rapid technological advances and on 
swift deterioration from the harsh environ- 
ment. 
Longer periods, perhaps 10 years, to carry net 
operating losses forward for tax purposes. 
(b) 
(c) 
(d) Implementation of a special tax differential as 
presently applied to some high-risk mining 
operations in South America. 
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