Mining for Mineral on the Norwegian Continental Shelf

In the proposal for the 2021 National budget, the Norwegian Government has allocated MNOK 30 (MUSD 3.2) for data acquisition related to seabed minerals. The Government states that seabed mining has substantial potential and can be a new and important industry in the future.

The Ministry of Petroleum and Energy (MPE) has appointed the Norwegian Petroleum Directorate (NPD) to also be the specialist directorate for seabed minerals, and has tasked the NPD to map and document mineral deposits in the deep sea.

The NPD has participated in a number of mapping expeditions during the last years, and has recently completed a five-week expedition on the Mohn Ridge in the northwestern Norwegian Sea. NPD reported that it had successfully used advanced drilling technology drawing on 50 years of experience acquired by Norwegian petroleum and maritime industry, and confirming that deposits recovered include metals and minerals that are important in battery technology, wind turbines and mobile telephones.

In anticipation of future mineral activities on the Norwegian Continental Shelf (NCS), the Parliament has passed the Act Relating to Mineral Activities on the Continental Shelf. The Act took effect on 1 July 2019.

The Act stipulates the main principles and legal framework for managing the mineral resources on the NCS, and is mainly based on principles and regulation for petroleum activities in the Petroleum Act.

As is the case for petroleum, it is a fundamental premise that the State has the proprietary right to mineral deposits and has the exclusive right to resource management. Resource management shall be carried out in a long term perspective and shall ensure safe and environmental friendly mineral activities alongside other NCS activities. At the same time, the authorities recognize that framework conditions must be predictable and transparent in order for the industry to make sound investment decisions.

Before an area can be opened for mineral activities, the MPE must conduct an impact assessment for the relevant area which shall include evaluation of the various interests involved, including an assessment of the impact of the mining activities on the environment and risks of pollution, as well as expected economic and social effects of the activities.

The proposal to open a specific area for mineral activities together with the impact assessment has to be sent for consultation to authorities concerned as well as industrial organizations etc. before the decision to open the area will be made by the King in Council.

The MPE has started the opening process and expects that identification of areas to be open may be made in in 2021.

To undertake mineral activities requires a license granted in accordance with the Mineral Activities Act. The Act provides for two types of licenses: the non-exclusive exploration license and the exclusive mining license.

A mining license grants the licensee an exclusive right to explore for and recover all mineral deposits in the license area, and the licensee will become the owner of the minerals once they have been recovered from the seabed to sea level.

A mining license may be granted to entities incorporated under Norwegian law and registered in the Norwegian Business Registry. If a license is awarded to several licensees, the MPE will appoint one of them as operator and require that the licensees enter into a joint venture agreement. As for petroleum activities, it should be expected that the MPE will stipulate a standard joint venture agreement.

The production license awards shall as a main rule be based on public tendering processes, and will be awarded on the basis of objective, non-discriminatory and published criteria.

The license shall normally be awarded for up to 10 years (may be extended) and shall specify a work obligation that must be carried out during that period.

If the licensee determines to start extracting minerals, it will have to submit a plan for development and production for approval by the MPE. The plan shall contain a description of technical, environmental and safety related aspects together with an environmental impact assessment of the development. When the plan has been submitted for approval, the licensee may require an extension of the license period by up to 20 years. The license period can thereafter be further extended, provided that the activities at all times are performed in accordance with the approved plan for development and production.

The mineral industry should expect that the Norwegian government will handle mineral activities on the NCS in the manner it has handled the petroleum activities – in a long term perspective and in a predictable and transparent regulatory framework.

Per Seime has long and substantial experience as oil and gas lawyer. He has been head of the oil and gas group in the law firm Simonsen Vogt Wiig, Counsel/General Counsel in Mobil Oil in Norway, USA and Indonesia, and General Counsel in Kongsberg Gruppen. In 2015, Seime started his own practice in the law firm Advokat Per Seime which is part of the collaboration BA2advokatene.

Seime has held a number of board memberships, particularly in oil companies, and is currently board member in Tethys Oil AB, listed in Stockholm.

Advokat Per Seime
per.seime@advokatseime.no
M +47 926 02 347
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