In furtherance of his Administration’s evident priority of developing alternative sources for critical minerals, last week President Trump signed Executive Order 14285 which provides until June 23, 2025, for relevant U.S. agencies to prepare the groundwork for mineral development in U.S. and international seabeds. Although the United States’ basic legal framework for international seabed mining has been in place since 1980, activity has been limited, partly given complex questions of how U.S. and international law interact in this area. The Executive Order includes several invitations for foreign governments and foreign companies to collaborate with the United States.
Background: Different Legal Frameworks for International Seabed Extraction
In 1980, while the Third United Nations (UN) Conference on the Law of the Sea was in the midst of its ninth session, the U.S. Congress passed the Deep Seabed Hard Mineral Resources Act (DSHMR Act) (30 U.S.C. § 1401 et seq.), intended as an interim measure to facilitate seabed mining while an international regime was being finalized. That international regime — the United Nations Convention on the Law of the Sea (UNCLOS) — was adopted in 1982, and covers seabed mining in addition to a wide array of other ocean-related subjects. Shortly before UNCLOS entered into force on November 16, 1994, an additional Agreement modifying UNCLOS’ original seabed mining provisions was adopted.
Despite the United States never signing UNCLOS, U.S. policy has generally been to act consistent with UNCLOS’ provisions as regards traditional ocean usages. Furthermore, the United States did sign the separate seabed mining Agreement on July 29, 1994, and participates as an observer state in the International Seabed Authority, which administers seabed mining contracts under UNCLOS. Commentators have disagreed as to the legal implications of the U.S. signature of the separate seabed mining Agreement.
Under last week’s Executive Order, the Trump Administration appears to consider the DSHMR Act to be the legal framework applicable to seabed mining in areas beyond national jurisdiction. Since its passage, the DSHMR Act has been materially unchanged, except that certain extraction tax provisions expired on their original terms. Intervening amendments were limited to updated cross-references, appropriations matters, and the removal of certain reporting requirements.
The Executive Order also seeks to expedite permitting and leasing related to seabed critical minerals within the U.S. Outer Continental Shelf. However, this provision does not speak to engagement with non-U.S. entities. As such, this Insight focuses on the international seabed mining components of the Executive Order.
A Broader Focus than the DSHMR Act
The Executive Order instructs the Secretary of Commerce (Commerce) to “act[] through” the Administrator of the National Oceanic and Atmospheric Administration (NOAA) to “expedite the process for reviewing and issuing seabed mineral exploration licenses and commercial recovery permits in areas beyond national jurisdiction” under the DSHMR Act.
The NOAA Administrator is invested with licensing and permitting authority under the DSHMR Act. That statute addresses exploration and commercial recovery in areas outside of any nation’s continental shelf and any foreign national resource jurisdiction recognized by the United States. This appears reasonably equivalent to the “areas beyond national jurisdiction” (ABNJ) referenced by the Executive Order.
In another key respect, however, the Executive Order’s instructions may exceed the scope of the DSHMR Act. As the name implies, the DSHMR Act regulates the exploration or commercial recovery of “hard mineral resources.” These are defined as “any deposit or accretion on, or just below, the surface of the deep seabed of nodules which include one or more minerals, at least one of which contains manganese, nickel, cobalt, or copper.” By contrast, the “seabed mineral resources” referenced in the Executive Order are defined to encompass “polymetallic nodules, cobalt-rich ferromanganese crusts, polymetallic sulfides, heavy mineral sands, phosphorites, and other mineral-bearing materials.” “Mineral,” in turn, includes critical minerals designated by the USGS, as well as uranium, copper, potash, gold, and “any other element or compound” so labeled by the Chair of the “National Energy Dominance Council” established by President Trump under Executive Order 14213. Indeed, insofar as the seabed minerals Executive Order requests a report “identify{ing} which critical minerals may be derived from seabed resources,” it appears that this process is, in part, intended to identify what subset of the above minerals might actually be present.
Opportunities to Engage with Foreign Partners
Although the DSHMR Act limits licensing and permitting to “United States citizens,” this is defined to include corporations established under U.S. law as well as foreign corporations that are controlled by a U.S. corporation or individual. As such, the participation of non-U.S. private entities in this industry is possible, and licenses have been issued to companies with partial foreign ownership.
Moreover, the DSHMR Act authorizes the President to negotiate agreements with foreign nations to “reciprocate” the provisions of the Act. The NOAA Administrator is empowered to consult with foreign nations for this purpose, as well as to provide information on seabed mining’s environmental impact and technical assistance in designing environmental regulations. But it is unclear whether appropriations exist for the NOAA Administrator to undertake such activities. In general, “reciprocating state” status would make the U.S. licensing regime mutually exclusive to the reciprocating state’s licenses. Some reciprocating state agreements were negotiated in 1984 and 1985, including with Japan, the United Kingdom, France, Germany, and Italy. Each of these countries subsequently ratified UNCLOS.
The Executive Order raises additional possibilities for foreign partnership. First, it instructs Commerce to report on the potential for seabed mineral resource exploration, mining, and environmental monitoring “in areas within the national jurisdictions of certain other nations that express interest in partnering with United States companies on seabed mineral development.” Insofar as this report is due by June 23, countries with a potential interest in partnership might consider initiating contact through the proper channels.
Second, the Executive Order instructs Commerce to “engage with key partners and allies to offer support for seabed mineral resource exploration, extraction, processing, and environmental monitoring in areas within the national jurisdictions of those partners and allies.” Consistent with the Administration’s critical mineral supply chain focus, this directive envisions the development of critical mineral production by other countries with U.S. support, which would diversify the global market. Again, countries with an interest in receiving such outreach may engage with the Administration.
Finally, a further report is requested on the “feasibility of an international benefit-sharing mechanism for seabed mineral resource extraction and development that occurs in areas beyond the national jurisdiction of any country.” With the expiration of the DSHMR Act’s extraction tax provisions, the statutory mechanism for funding the “Revenue Sharing Trust” is inactive. Thus, it does not appear that “benefit-sharing” referenced in the Executive Order could readily be accommodated through the provisions of the DSHMR Act itself. However, the Executive Order’s directive may be the first step toward amending the existing U.S. legal framework.
Additional Reports that May Significantly Impact Future Steps Toward Seabed Mining
In addition to the licensing, permitting, and analytical directives summarized above, the Executive Order also instructs certain agency heads to report on the following:
- A Commerce-led report identifying private sector interest and opportunities for: (a) seabed mineral resource exploration, mining, and environmental monitoring in the United States Outer Continental Shelf and areas beyond national jurisdiction; and (b) polymetallic nodule and other seabed mineral resource processing capacity in the United States or on United States-flagged vessels;
- A report led by the Defense and Energy Departments concerning the feasibility and any potential benefits or drawbacks of using the National Defense Stockpile for physical or virtual storage of materials derived from seabed polymetallic nodules and of entering offtake agreements for these materials; and
- A multiagency report identifying tools to support domestic and international seabed mineral resource exploration, extraction, processing, and environmental
Further Engagement May Be Worthwhile
The trade law and policy experts of Cassidy Levy Kent regularly advise clients, including governments, in how favorable trade outcomes might be obtained. Our attorneys, compliance professionals, and economists have a thorough understanding of relevant legal regimes and may assist parties in interfacing before U.S. trade agencies.