Space mining: Commercial opportunities & legal uncertainties By Dr Matthew Stubbs

SPACE MINING: COMMERCIAL OPPORTUNITIES AND LEGAL UNCERTAINTIES

DR MATTHEW STUBBS, ASSOCIATE PROFESSOR, ADELAIDE LAW SCHOOL

The potential of space mining as a commercial industry for the future is enormous. As the US Geological Survey has recently stated:

“the amount of useful resources in NEOs [near-earth objects such as asteroids] is immense’ and ‘could sustain a million-fold increase in human activity in space for a million years.” 1

One barrier to this industry is technology – but this is evolving rapidly. Another barrier is institutional – the lack of a legal regime which can coherently regulate space mining.

Terrestrial mining generally relies on a legal regime which has at least three key features. First, licences granting access to exclusive exploration rights within a defined area (prospecting rights). Second, licences granting exclusive rights to extract resources discovered through such exploration with ongoing security of tenure granted subject to the payment of royalties (extraction rights). Third, lawful markets for the selling of such resources. At present, as this article will explain, space law offers no equivalent institutional infrastructure, and indeed contains principles which appear to stand in the way of their implementation in outer space.

IMPLICATIONS FOR SPACE MINING FROM THE OUTER SPACE TREATY

The conduct of States, corporations and individuals in outer space is governed by the Outer Space Treaty of 1967, 2

which does not contain any provisions expressly addressing space mining. However, the framework of principles for the exploration and use of outer space which the Outer Space Treaty provides has important consequences for the regulation of space mining.

One of the fundamental principles enshrined in art I of the Outer Space Treaty is that outer space (which includes the Moon and other celestial bodies) is to be “free for exploration and use by all States’, who are to have ‘free access to all areas of celestial bodies”. Further, exploration and use of outer space is to be conducted “for the benefit and in the interests of all countries”. Additionally, art II of the Outer Space Treaty provides that “Outer space … is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.”

These principles are significant to the regulation of space mining because of their inconsistency with a number of the features of a typical terrestrial mining regime. First, there would not appear to be any means by which a State could grant exclusive prospecting rights – which, given the extraordinary cost of an exploration mission to a NEO, would be a significant disincentive to commercial parties. Second, even if a resource were discovered, there does not appear to be any means by which a State could grant exclusive extraction rights to the discovering entity – which would act as a further disincentive to commercial parties. Third, there is an important question regarding whether space mining might breach the art II prohibition of national appropriation 3

– which could prevent there being a lawful market for

THE BULLETIN March 2020 resources. Fourth, even if these barriers could be overcome, it is unclear whether the ensuing benefits are for the entity undertaking these activities or whether they must be shared with all nations.

THE MOON AGREEMENT: COMMON HERITAGE OF HUMANKIND AND BENEFIT SHARING

The picture becomes even less promising for those States who are parties to the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies (Moon Agreement) of 1979. 4

Only Australia and 17 other States are party to this agreement, none of which are major space-faring nations.

The most significant aspect of the Moon Agreement for the purposes of space mining are the provisions of art XI dealing with benefit sharing. Art XI provides that “The Moon and its natural resources are the common heritage of mankind” 5 and requires State parties to “establish an international regime … to govern the exploitation of the natural resources of the Moon”. 6

The main purposes of that regime are to be to ensure: • “The orderly and safe development of the natural resources of the Moon; • The rational management of those resources; • The expansion of opportunities in the use of those resources; • An equitable sharing by all States Parties in the benefits derived from those resources, whereby the interests and needs of the developing countries, as well as the efforts of those countries which have contributed either directly or indirectly to the exploration of

the Moon, shall be given special consideration.” 7 In fact, no such regime has yet been developed. There are clear advantages that might flow from a regime addressing the first three dot points above. Unfortunately for the prospects of commercial space mining, the last of these is likely to be a significant stumbling block. Provisions similarly declaring resources to be “the common heritage of mankind” and prescribing a regime of benefit sharing were included in the United Nations Convention on the Law of the Sea of 1982 in respect of the resources of the deep sea bed (the sea bed in areas beyond national jurisdiction – that is, beyond the EEZ and continental shelf of States – roughly 50% of the world’s sea beds). 8

These provisions (until modified in 1994) presented a major barrier to States becoming parties to UNCLOS, 9

and have remained a disincentive to commercial resource exploitation of the deep sea bed. 10 Two additional provisions of the Moon Agreement appear relevant, yet suggest contradictory results. First, art VI(2) contains a narrow permission to collect and remove samples and “use mineral and other substances of the Moon in quantities appropriate for the support of their missions”. This might imply that the use of resources other than for the immediate carrying out of a mission may be impermissible. Second, however, art XI(3) provides that “Neither the surface nor the subsurface of the Moon, nor any part thereof or natural resources in place, shall become property of any State”. 11

This appears to leave open the possibility of natural resources once extracted being liable to ownership and commodification.

SPACE MINING LEGISLATION AROUND THE WORLD

Notwithstanding conceptual difficulties at the international level, States have begun to pass domestic legislation aimed at encouraging the development of space mining industries. The most significant of these is the United States’ Space Resource Exploration and Utilization Act of 2015, which provides that

“A United States citizen engaged in commercial recovery of an asteroid resource or a space resource under this chapter shall be entitled to any asteroid resource or space resource obtained, including to possess, own, transport, use, and sell the asteroid resource or space resource obtained in accordance with applicable law, including the international obligations of the United States”. 12 Interestingly, apparently anticipating a potential objection based on art II of the Outer Space Treaty, the law itself contained a note that:

“It is the sense of Congress that by the enactment of this Act, the United States does not thereby assert sovereignty or sovereign or exclusive rights or jurisdiction over, or the ownership of, any celestial body”. 13 This is consistent with the view that art II of the Outer Space Treaty prohibits only property claims over resources in place, and not property claims over resources after they have been extracted. 14 Legislation similar to that in the United States has been passed in Luxembourg, and is being introduced in the United Arab Emirates. Other jurisdictions are likely to follow. While international space law still lacks rules relating to the topics identified above as fundamental to terrestrial mining, some States are nevertheless keen to encourage space mining industries to emerge while a regulatory regime develops.

FUTURE DEVELOPMENTS IN THE LAW OF SPACE MINING

Ultimately, States will shape the development of the law relating to space mining. However, an academic endeavour has articulated Building Blocks for the Development of an International Framework on Space Resources 15

which are of conceptual interest. In particular, they propose that the future regulation of space mining should include the following features: • “attribution of priority rights to an operator to search and/or recover space resources in situ for a maximum period of time and a maximum area upon registration in an international registry” 16 • “resource rights over raw mineral and volatile materials extracted from space resources, as well as products derived therefrom, can lawfully be acquired”. 17 On the thorny issue of benefit sharing, the Building Blocks propose that “[t]he international framework should not require compulsory monetary benefit-sharing”. 18 Instead, benefit-sharing would focus on non-monetary benefits such as: a. The development of space science and technology and of its applications; b. The development of relevant and appropriate capabilities in interested States;

c. Cooperation and contribution in education and training; d. Access to and exchange of information; e. Incentivization of joint ventures; f. The exchange of expertise and technology among States on a mutually acceptable basis; g. The establishment of an international fund.” 19 Whether these proposals do enough to address the issues that the common heritage of humankind principle is intended to respond to – fairness to the Global South and intergenerational equity – is unclear. These Building Blocks identify some of the features that may be desirable in future international law regulating space mining. However, they are a very long way from representing the present state of the law.

CONCLUSION

As space mining becomes technologically and economically feasible, the law will need to keep pace. At present, the basic features that might be expected of a mining law regime (exclusive prospecting and extraction rights, and a lawful market) do not exist, and may be inconsistent with important principles in the Outer Space Treaty. Moreover, for States parties to the Moon Agreement as Australia is, there is further uncertainty about the application of the common heritage of humankind principle. Legal clarity may come from treaty developments (whether through the creation of a new regime or under the auspices of the Moon Agreement), from an accumulation of national legislation passed by States to structure the space mining activities of their nationals, or from the eventual implementation of the efforts of non-State experts. The opportunities offered by space mining are likely to impel the development of a more effective legal regime, although its contours remain to be shaped in the future. B

Endnotes 1 Laszlo Keszthelyi et al, ‘Feasibility Study for the Quantitative Assessment of Mineral Resources in Asteroids’ (US Geological Survey, 2017) <https:// pubs.usgs.gov/of/2017/1041/ofr20171041.pdf> 11. 2 Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, 610 UNTS 205 (entered into force 10 October 1967) (‘Outer Space Treaty’). 3 See, eg, Frans G von der Dunk, ‘Asteroid Mining: International and National Legal Aspects’ (2017) 26(1) Michigan State International Law Review 83; Jinyuan Su, ‘Legality of Unilateral Exploitation of Space Resources under International Law’ (2017) 66 International and Comparative Law Quarterly 991. 4 Agreement governing the Activities of States on the Moon and Other Celestial Bodies, 1363 UNTS 3 (entered into force 11 July 1984) (‘Moon Agreement’). Under art 1(1), the Moon Agreement also applies ‘to other celestial bodies within the solar system, other than the Earth’. 5 Ibid art XI(1). 6 Ibid art XI(5). 7 Ibid art XI(7). 8 United Nations Convention on the Law of the Sea, 1833 UNTS 397 (entered into force 1 November 1994). 9 See, eg, Michael C Wood, ‘International Seabed Authority: The First Four Years’ (1999) 3 Max Planck Yearbook of United Nations Law 173, 177-8. 10 See, eg, Kris Van Nijen et al, ‘The Development of a Payment Regime for Deep Sea Mining Activities in the Area through Stakeholder Participation’ (2019) 34(4) International Journal of Marine and Coastal Law 571. As the International Seabed Authority has itself noted, ‘aligning optimal proceeds with attracting investments … will prove a fundamental challenge’: International Seabed Authority, Developing a Regulatory Framework for Mineral Exploitation in the Area: A Discussion Paper on the Development and Implementation of a Payment Mechanism in the Area for Consideration by Members of the Authority and All Stakeholders (2015) <www.isa. org.jm/files/documents/EN/WorkingPapers/ DiscussionPaper-FinMech.pdf>. For commentary on the common heritage of humankind and benefit sharing, see: Isabel Feichtner, ‘Sharing the Riches of the Sea: The Redistributive and Fiscal Dimension of Deep Seabed Exploitation’ (2019) 30(2) European Journal of international Law 601. 11 Emphasis added. 12 51 U.S.C. § 51303. 13 Public Law 114–90 s 403. 14 See, eg, Scot W Anderson, Korey Christensen & Julia LaManna, ‘The Development of Natural Resources in Outer Space’ (2019) 37(2) Journal of Energy & Natural Resources Law 227, 240. 15 The Hague Space Resources Governance Working Group, Building Blocks for the Development of an International Framework on Space Resources (2019) <https://www.universiteitleiden.nl/ binaries/content/assets/rechtsgeleerdheid/ instituut-voor-publiekrecht/lucht--enruimterecht/space-resources/bb-thissrwg--cover. pdf>. 16 Ibid [7]. 17 Ibid [8.1]. 18 Ibid [13.2]. 19 Ibid [13.1].

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