Minerals Report - International Seabed Authority

As a general principle the fiscal package attempts to be flexible, simple,
transparent and applicable to the issues involved in offshore mining. It is
accepted that certain unique aspects of deep ocean resources warrant a
deviation from the onshore fiscal package. These include the anticipated long
period of time required for exploration and technology development, the
unique environment under which mining takes place, high risks associated
with a pioneering endeavour and the uncertainty surrounding the economic
viability of deposits. With this in mind flexibility may mean that overall
lower front-end rates with respect to royalty and income tax may be balanced
by an Additional Profits Tax that comes into place at a lower profit threshold
rate than onshore.
In addition it is anticipated that some of the recently introduced taxes
such as mining levy, and interest withholding tax might not be applicable to
offshore mineral operations
Table 2: Likely Offshore Licensing Terms
Licence/
Permit
Prospector’s
Right
Exploration
Licence (EL)
Term Area Nature of
Right
Rights
3 yrs initially Unrestricted Non exclusive Prospecting
Renewal 3 yrs
5 yrs initially
1000 sub blocks
(3410 sq km)
Exclusive Exploration
Renewal 5 yrs 20% reduction
Pilot Mining Part of EL Part of EL As for EL Test mining technology
Test
and system
Mining Lease Negotiable Less than for EL Exclusive Mining
Lease for
Mining Purpose
Mining
Easement
Need
Dependent
Need
Dependent
Need
Dependent
Need
Dependent
Exclusive Installation of facilities
for mining purposes
Non exclusive Use of structures like
pipes, special access
ways
INTERNATIONAL SEABED AUTHORITY 362