Australia: Deep sea mining – Ten things to know about mining applications and licenses

01 | The 'Area' – non-territorial waters and the governing regime

Under the United Nations Convention of the Law of the Sea (UNCLOS), the seabed and subsoil thereof beyond the limits of national jurisdiction is designated as the 'Area'.

UNCLOS states that the Area and its resources, including all minerals, are the common heritage of mankind, with governance of the Area being vested in the International Seabed Authority (ISA).

ISA is the body responsible for granting prospecting, exploration and exploitation licenses for all mining activities in the Area.

02 | Mineral ownership and licenses

Prior to the award of any license, all minerals in the Area are the common heritage and ownership of mankind.

A prospecting license provides no resource rights, however, allows for a reasonable quantity of minerals to be recovered for testing.

Exploration licenses are granted by ISA for a 15 year term in respect of reserved areas, providing for the collection of minerals for analysis and testing to determine whether a reserved area may be viable for commercial exploitation.

Exploitation licenses shall grant the right to the license holder to commercially exploit a specified area and to benefit from such mining activities. The ISA is considering a permitting regime for exploitation involving an initial three year 'pilot' license, followed by a long term tenured license. Such long term mining license will be subject to ISA approval, to be granted where the feasibility and bankability of a project can be shown from the results of the three year pilot phase activities.

03 | Mineral types

Deep sea ocean floor mineral resources are divided into three primary categories, being polymetallic nodules (also referred to as manganese nodules), seafloor massive sulphides (SMS) and cobalt rich crusts, with each resource having different mineral compositions, including rare earth elements.

  • Polymetallic nodules – manganese, iron, copper, cobalt, magnesium, titanium.
  • Cobalt Rich Crusts – cobalt, nickel, platinum, titanium, tungsten, cerium.
  • Seafloor Massive Sulphides – copper, lead, zinc, silver, gold.

04 | Geographic distribution

Polymetallic nodules are located in all oceans and have been found in fresh water lakes. However, nodules concentrated to amounts to be of economic interest are located in the centre

of the north central Pacific Ocean, the centre of the north Indian Ocean and the Peru Basin in the south-east Pacific Ocean.

Cobalt rich crusts occur throughout the Pacific on seamounts, ridges and plates, with the central equatorial Pacific region offering more economically viable conditions and distributions.

Seafloor massive sulphides have to date been found to occur in the greatest abundance at the East Pacific Rise, the Northeast Pacific Rise and the Southeast Pacific Rise.

05 | Contracting parties

The following entities are permitted under UNCLOS to engage in mining related activities:

  • The 'Enterprise' – a proposed ISA body to carry out mining activities for ISA;
  • States Parties (UNCLOS member states) in conjunction with ISA;
  • Private entities of a State (contractors) – when sponsored by a State Party.

For private entities to be able to secure the sponsorship of a State Party, that entity must be either a natural or juridical person possessing the nationality of such State or be subject to the effective control of the sponsoring State or its nationals.

06 | Applicable laws and security regime

Due to the unique geographic and jurisdictional location of deep sea mining (being in non-territorial waters overseen by the ISA), the contractual framework for the financing and development of a deep sea mining project will include a particularly complex set of agreements subject to various governing laws.

Exploration and exploitation contracts between project company (contractor) and ISA – governed by the Law of the Sea and, where relevant, international law.

Sponsorship Agreement – under the jurisdiction of the sponsoring State.

Financing documentation – determined on a project/lender basis (likely to be governed by English law).

Security documentation – given the nature and location of deep sea mining projects situated beyond territorial waters, a varied security regime will apply (including flag state ship mortgages and fixed and floating charges) to provide security over surface vessels, submersibles and ROVs, sea floor dredgers and extraction equipment operating on the ocean floor.

Operation agreements, charters, project contracts – governed by the contracting parties' relevant jurisdictions (or English law).

07 | Royalty and tax regime

There is currently no regulatory framework in place to provide for commercial mining activities in non-territorial waters nor a royalty or tax regime in relation to such. However, Article XI and Annex III of UNCLOS provide that commercial operators shall pay financial contributions to the ISA in relation to their mining activities and this reflects the overarching principle that the minerals of the Area are of the common heritage of mankind. ISA has indicated the need for putting in place such a framework and is working towards this, given certain exploration licenses are due to expire in 2016. The ISA Technical Study No. 11 (published February 2013) provides for several potential royalty and taxation regimes and while no exact revenue collection method has been established as yet, the Technical Study recommends that when formulated this be reflective of onshore mining practices.

08 | Environmental considerations – Sponsoring State and contractor liabilities

Article 139 of UNCLOS stipulates that State Parties are responsible for ensuring activities carried out in the Area by contractors (entities a State has sponsored) conform to the convention. This is further clarified under Annex III of the convention, whereby a Sponsoring State will not be liable for environmental damage resulting from a contractor's activities where that state has adopted laws and regulations and taken administrative measures reasonably appropriate for securing a contractor's compliance with the convention. The Advisory Opinion of the Seabed Disputes Chamber published in February 2011 stated the obligation of a Sponsoring State in this regard was one of both conduct and due diligence and that states should apply a precautionary approach and best environmental practice. To comply with these requirements and to protect against liability, it may well be in most instances that Sponsoring States will need to pass specific and appropriate legislation to regulate sponsored contractors and their activities.

As noted, there is currently no regime in place with respect to commercial mining activities, however, with respect to exploration activities, the Polymetallic Exploration Regulations require contractors to apply necessary measures to prevent, reduce and control pollution and other hazards to the marine environment.

The Advisory Opinion clarified that the liability of a Sponsoring State and a private contractor exist in parallel and that liability shall be for the actual amount of damage caused. It is likely that a similar liability regime is incorporated into the exploitation regulations when these are completed, although the Seabed Disputes Chamber noted that the standard of liability for exploration may not be applicable for exploitation.

Aside from the ISA, the importance of the role of regional agencies with respect to regulating and protecting against the potential environmental impacts of deep sea mining should be noted. In the Pacific region the SPREP (Secretariat of the Pacific Regional Environment Programme) and SOPAC (Secretariat of the Pacific Community's Applied Geoscience and Technology Division) are active in assisting Pacific Island peoples in making informed decisions about their future, the utilisation of resources and environmental and social considerations regarding offshore mining.

09 | Application process

All activities proposed to be carried out in the Area are first submitted to the Legal and Technical Commission (LTC) for consideration. The LTC is the ISA technical body responsible for reviewing formal written plans of work for operations in the Area. The LTC may then recommend a plan of work to the Council (the executive body of the ISA) and it is the Council which is responsible for approval of plans of work.

10 | Current applications and licenses

To date, the ISA has entered into exploration contracts of a fifteen year tenure with eleven different contractors. The majority of these contracts are for exploration for polymetallic nodules in the Clarion-Clipperton Fracture Zone (in the Equatorial North Pacific Ocean south and southeast of Hawaii), with two contracts for exploration for seafloor massive sulphides in the South West Indian Ridge and the Mid Atlantic Ridge. There are another four contracts currently in the process of being completed with the ISA.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.