There have been many studies on the economics of the development of deep scabbed manganese nodule since nineteen seventies. However, the results in the literature are somewhat Inconsistent with each other due to the difference in circumstances or each country. This paper aims at a preliminary reasonable review of the economics of the development project from the private company" s point or view on the assumption that the processing plant is located in Korea. The model constructed for this economic evaluation consists of estimation of R&D expenditures, capital expenditures, annual operating expenses, and long-term equilibrium prices of metals and annual revenues, and of calculation of IRRs and sensitivity analysis. The results of this study suggest that the R&D should be concentrated primarily on how to decrease the annual operating expenses and secondly on how to decrease the capital expenditures.


Korea completed registration of its claim area to UN on August 2, 1994 and acquired 15,000 km2 of deep seabed area in Clarion-Clipperton Zone of the north Pacific Ocean. Korean institutes and private companies established Korea Association for Deep Ocean Minerals Development(KADOM) on June 14, 1994. As a member of KADOM, Hyundai Heavy Industries Co., Ltd., as its lead member, is interested in the economics of the development of deep-seabed manganese nodules. The purpose of this paper is to review and evaluate the economics from the private company" s point of view. The scope of this study comprises the preliminary estimation of capital expenditures including the R&D cost and exploration cost and the annual operating expenses, the review of the price of metals in the past, the expectation of long-term equilibrium price of the metals, the calculation of IRR (internal rate of return), and the sensitivity analysis of the IRR.

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