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An impressive 140,000 square miles of Atlantic Ocean and
sea-floor was ceded to Bermuda by proclamation of His Excellency
the Governor of Bermuda on June 6, 1996. This relatively unknown
development makes Bermuda the only British Overseas Territory to
have ownership of its surrounding waters, an area called the
Economic Empowerment Zone (the "EEZ").
Under international maritime law, coastal states have control
over both the surrounding territorial waters, and the state's
contiguous zone. Territorial waters stretch 12 miles from the
low-water mark of the state's recognised coast. The contiguous
zone stretches for an additional 12 nautical miles. Bermuda's
EEZ expands this control an additional 176 nautical miles to the
200 nautical mile mark.
With the responsibility of protecting this area (roughly the
size of California and larger than Germany), comes tremendous
opportunity. The relevant legislation (Article V of the United
Nations Convention of the Law of the Sea) provides that Bermuda may
exercise sovereign rights for the purposes of exploring and
exploiting the natural resources both living and non-living of the
EEZ's waters, seabed and its subsoil.
Within the scope of this legislation Bermuda's EEZ can be
used in a variety of economically advantageous ways. Possibilities
include energy resources such as tidal or wind generated
electricity, fresh water extraction, biological resources such as
bioprospecting where organic marine organisms are used to develop
pharmaceutical drugs (the Bermuda Institute of Ocean Sciences just
received $3m to research sea urchins in Bermuda for their cancer
fighting abilities), non-extractive resources such as dive tourism,
and finally the extraction of minerals.
This article will examine more closely the opportunities that
exist in sub-sea mineral deposits in our EEZ and the potential that
Bermuda has as a jurisdiction of choice for the emerging sub-sea
mining industry.
Ocean Projects Limited, a pioneer in Bermudian sub-sea mineral
prospecting, has already begun to study a relatively small portion
of the seabed (the size of Staten Island) within Bermuda's EEZ.
The preliminary results of this work have been encouraging, and
suggest that there exist two main types of mineral deposits within
Bermuda's EEZ:
Ferromanganese crusts are platinum rich metallic crusts that
form on submerged volcanic rock. The crusts are created as metals
dissolve in seawater over time and are more prevalent in seawater
with low oxygen content, generally between depths of 400 to 4,000
metres. The platinum and other minerals derived from these crusts
are used in thousands of applications from wedding bands to
computers; and
Phosphate deposits that are found in a rare form of lava
(carbonatites) are also thought to exist off Bermuda's shores.
This important mineral is used internationally as an agricultural
fertilizer, in animal feed supplements, food preservatives,
anticorrosion agents, cosmetics, fungicides, and water treatment.
The price of this mineral per tonne on international markets is now
making extraction and shipment a much more attractive
prospect.
The area investigated thus far represents less than half of one
per cent of Bermuda's EEZ. The possibilities that exist for
finding gold, platinum and valuable minerals remain very
exciting.
It may be some time before profitability and regulatory approval
intersect to make sub-sea mining a reality in Bermuda. Fortunately,
the island is perfectly equipped to welcome international sub-sea
mining companies to (re)domicile in Bermuda due to its highly
skilled professional service providers, the existence of the
Bermuda Stock Exchange (and particularly its Mezzanine Market), our
globally recognised Shipping Registry – and our status as
a low-tax jurisdiction.
While there is no guarantee that Bermuda's sub-sea minerals
exist in economically viable proportions, further prospecting
within Bermuda's EEZ should be encouraged. Environmental best
practices are still developing, and should be monitored closely. As
in other areas where sub-sea mining takes place, no extraction
should be permitted until full environmental studies have been
carried out, and approval granted on a project by project
basis.
Aside from the use of its own EEZ, Bermuda has a variety of
attractive features to present itself as a domicile of choice for
the international sub-sea mining industry. The potential
stimulation to local employment and net benefit to the balance of
trade may provide a catalyst for growth that Bermuda's economy
would welcome.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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