Solution mining of Johnston Island manganese crusts: An economic evaluation

Abstract

Cobalt-rich manganese crusts in the 200 mile Exclusive Economic Zone around Johnston Island exhibit most of the characteristics of an economic resource. Cobalt grades reach 1.5%. Submersible studies indicated that this manganese crust resource is potentially mineable. A multi-year University of Hawaii study examined in detail whether these crusts could yield an attractive economic return to a company willing to mine them. The total study undertook a detailed resource survey, an evaluation of new engineering and processing developments and an assessment of world metal market volatility, particularly for cobalt. The work presented looks at the economically attractive potential of new solution mining technologies. At the historical average price of cobalt of $16.70/lb (in 1993 dollars), this technology could give an internal rate of return for a crust mining venture of 47%. The current producer price of cobalt is locked at $21/lb through 1995 by the major African producers. Spot market prices are considerably higher. Price fluctuations in the $25-35/lb range, characterized the cobalt market in 1992 and again in 1994 leading to the so called 'cobalt crisis'. This situation, as well as the legal clarification provided by the Law of the Sea Treaty, make the full development of marine manganese resources a very attractive proposition for the twenty-first century.