Out-Law News 2 min. read

China secures licence to explore for minerals in western Pacific seabed

The International Seabed Authority (ISA) has granted China rights to explore for cobalt, nickel and iron on the western Pacific seabed, the ISA has confirmed.

The 15-year contract will give the China Ocean Mineral Resources Research and Development Association (COMRA) exclusive rights to search for cobalt-rich ferromanganese crusts over a 3,000 square kilometre area.

Cobalt-rich ferromanganese crusts contain metals such as cobalt, nickel and iron which are used in the manufacture of electronic items and batteries as well as some engineering and infrastructure products.

Jin Jiancai, COMRA's director, said that the Association's investigations of the seabed in the area would contribute to global deep-sea knowledge. "China's faith and responsibility in peacefully exploring deep-sea resources and protecting the deep-sea environment will motivate our further cooperation in deep-sea activities," he said, according to China Daily.

The licence makes China the only nation authorized to explore international seabeds for up to three major types of minerals. In 2001 China secured a 15-year contract to search for polymetallic nodules in the northeastern Pacific Ocean in 2001. This licence is due to expire in 2016, at which point China will have the right to commence commercial mining of polymetallic nodules in the area, although it still faces some technical issues in relation to ocean-floor mining, said China daily. In 2011 China also secured rights to explore for polymetallic sulphide deposits in the south western Indian Ocean.

Michael W. Lodge, deputy to the secretary-general and legal counsel of ISA, congratulated China on its progress in the sector over the past decade, according to China Daily.

According to China Daily, the Chinese Institute for Marine Affairs, which is a think tank for the State Oceanic Administration, has said that China is making changes to its own legal system in relation to deep sea exploration and mining with the aim of regulating deep sea activities and protecting the oceanic environment.

The contract comes as China is in the process of appealing a World Trade Organisation ruling which  found that Chinese export restrictions on its rare earth minerals violate global trade laws. Rare earths are a set of 17 metal elements which have magnetic and optical properties. They are essential for the manufacture of a range of high tech products, including mobile phones, wind power turbines, disk drives and defence technology. China is home to 23% of the world's rare earth reserves and accounts for 90% of global annual supply, according to the Chinese state press agency Xinhua. The appeal follows a ruling by the WTO last month that export duties, export quotas and trading rights which China imposes on enterprises in relation to rare earths as well as the metals tungsten and molybdenum breach its WTO commitments.

The ISA is the intergovernmental organisation which has responsibility for organising and regulating     mineral-related activity which takes place within the international seabed area which lies outwith the limits of national jurisdiction. Established in 1994, to date it has issued a total of 19 contracts to explore the deep seabed for polymettalic nodules and polymetallic sulphides to 15 different entities from countries including the UK, France and Germany. Part of its remit is to ensure environmentally sustainable development of seabed mineral resources.

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