Senator METCALF. Our next witness is Phillips Hawkins.

STATEMENT OF PHILLIPS HAWKINS, VICE PRESIDENT AND EXECUTIVE ASSISTANT, RESEARCH DEVELOPMENT, UNITED STATES STEEL CORP.

Mr. HAWKINS. The next witness on your list, Senator, is Mr. Robert L'Esperance, who is not able to be with us today. He has prepared a detailed statement on the status of manganese in the world and has made a very good case for the fact in the next 29 years the present sources of terrestrial commercially exploitable manganese will be exhausted. This is a point which we cannot overemphasize.

I will be happy to answer any questions you may have as to how we arrived at this conclusion and the importance we attach to it. That is probably the biggest contribution I can make to the testimony to be given here today. I hope my written testimony will make it clear my company could not justify further investments in deep seabed mining if the United Nations Conference on Law of the Sea, UNCLOS III, should result in agreement by the United States to the terms of any of the treaty texts which are being considered therein.

All of these texts, starting with the Single Negotiating Text, SNT, and the proceeding to the Revised Single Negotiating Text, RSNT, the Evensen text, and finally the Engo text, ICNT, impose terms that would crate a climate in which a U.S. private enterprise operation could not survive.

I am most hopeful that my testimony will serve to convince the Members of the Senate that there is urgent need to create a sound political climate that will encourage early expenditure of the huge sums required to make deep-sea mining on a commercial scale a realizable goal before the exhaustion of terrestrial sources of manganese threatens the welfare and safety of our country.

I might say, parenthetically, the urgency is not only to have a commercial operation in effect 30 years from now, but the urgency also is to pass legislation which will make it possible for companies such as mine, who are engaged in developing the process and spending at the rate of $1 million a month to continue such expenditures toward the final establishment of a commercial operation.

The length of time we can go on making that type of expenditure without having an acceptable political base is very questionable. We are delighted that the shock of being confronted with the Engo text has been so great that the executive branch now appears to be prepared to support domestic legislation.

However, at the same time, we are concerned that the administration is so preoccupied with a desire to placate the demands of the developing world that they will agree to surrender our existing rights under international law in favor of a United Nations Seabed Authority that could arbitrarily and without due process deprive us of access to these minerals.

The concessions made at UNCLOS III by Dr. Kissinger in 1976 created a situation in which the United States could not win. A treaty based on the parallel system as it has been embodied in all recent treaty drafts would result in an abandonment of U.S. industry's efforts to develop this new important source of minerals. It

would turn control of all seabed minerals over to the UN. Seabed Authority where the majority vote would be in the hands of countries incapable of, and for the most part uninterested in, deep sea mining.

At the end of the last session of the Conference. Ambassador Richardson experienced exactly what we have been concerned would happen to us if our operations wre placed at the mercy of a majority in the U.N. Seabed Authority.

It is our concern that the U.N. Seabed Authority, motivated in favor of the developing countries which constitute the great majority, will exercise its discretion in a manner similar to that spelled out in the Engo text so that it would only be a matter of time before any deep-sea mining venture operating under the terms of the Evensen draft would find itself Engo-ized.

In this state of affairs, those contemplating further huge expenditures on deep-sea mining must have confidence that Congress will have the depth of vision to pass legislation such as we are discussing today and will reject a treaty based on the Evensen or Engo texts or the concessions which Mr. Kissinger has made.

It is my impression from talking with Ambassador Richardson that the administration has no intention of dignifying the Engo text with any critical analysis of its specific provisions. I am concerned from the Ambassador's remarks, that he hopes to revive consideration of the Evensen text which he previously so violently attacked.

In view of the possibility that the Evensen text may become a matter for serious consideration, we will prepare a detailed commentary on the text and submit copies to both Ambassador Richardson and to these two committees if such is your wish. We have already prepared a commentary on the horrors of the Engo text which we will be pleased to provide you, although it is our present impression that no one in the U.S. delegation is willing to give any serious consideration to this text.

Turning now to consideration of S. 2053, we are gratified that your two Senate committees are prepared to consider such legislation. We applaud the recognition, which is inherent in the bill, that there is need for such legislation. We are grateful for your past and present leadership in seeking practical domestic solutions to the legal problems of the ocean-mining industry.

We are also grateful for Senator Hollings call for changes in this Nation's law of the sea negotiating policy, including a call for bilateral and regional negotiations with our allies on a common approach to deep-seabed mining. This course of action, coupled with sound domestic legislation, is a realistic approach which can yield economically and environmentally sound solutions on a timely basis.

We are very fortunate today in having Northcutt Ely with us, to make specific comments on the legislation and I will yield any part of my time which may be left to me to Mr. Ely in order that he may make the very pertinent comments which he has prepared. Senator METCALF. Thank you very much, Mr. Hawkins. The statement of Mr. L'Esperance will be incorporated in the record as you requested. We would also like to have your other comments

submitted for the record, and the staff will go over them and also incorporate them in the record.

Mr. HAWKINS. Thank you.

[The prepared statements of Mr. L'Esperance and Mr. Hawkins follows:]

Introduction

The following is submitted as written testimony to accompany the presentation made by Mr. Phillips Hawkins, Vice President and Executive Assistant, Resource Development, United States Steel Corporation. This review has been made by the Exploration & Development staff of United States Steel Corporation and associated companies under the direction of the undersigned.

We have been concerned for a considerable number of years with the exploration for certain metallic minerals, including nickel and cobalt, and particularly metallurgical-grade manganese ores. This presentation is addressed particularly to a discriminating analysis of the characteristics of the aforementioned ores including the abundance of proven, economically viable reserves and their life, and peculiarities relating to the discovery and identification of additional proven reserves. A full review of the cartelization aspect, the consequence of disruption of supply, end uses, or substitution, demand, growth in demand, and strategic alternatives are beyond the purview of this review. However, there is some discussion of the influence of political sovereignty and geographic location on the consideration of economic sources in today's context and the security of supply. The review is particularly concerned with manganese ore. In what follows, our reference to ore reserves follows the new definition of the Department of the Interior released April 15, 1974, namely " "mineral reserves" are that portion of "mineral resources" that have actually been identified, and can be legally and economically extracted at the time of determination.'

We believe that the Committee may be unaware that the statistical information quoted from various sources about the abundance of mineral reserves of manganese, nickel and cobalt, which appears in numerous recent commodity reviews such as that by Charles River Associates, Inc., for the National Bureau of Standards, Stanford Research Institute, the National Planning Association (Committee on the Changing International Realities), essentially rests on original data of the U.S. Bureau of Mines or the U.S. Geological Survey. It is our impression that these data have not been subjected to critical review by those who use it as a source for their allegations concerning the abundance of the aforementioned minerals. In fact, we have been unable to ascertain the bases on which it was decided that certain of the mineral resources were to be classified as mineral reserves by the compilers of the statistics. Consequently, we addressed ourselves particularly to our own review of what is properly a mineral reserve under the aforementioned definition, drawing on our general experience as to degree of reliability that can be attached to the sub-division of reserves as defined in the new nomenclature, and the notion of what can be economically extracted.