Polymetallic nodules from the Pacific Ocean. Image by Deep Green Metals.
Industry overview
Introduction to deep sea mining
What a complex topic to detangle! The more we read about it — and we have read quite a lot — the more we come to agree with the European Academies Science Advisory Council's (EASAC) candid statement that “the pressure for mining is driven by industry and economic interests rather than demands from the transition to a green economy.”
And, we do not say that simply because we are pro-climate
Polymetallic nodules are potato-sized rocks containing manganese, cobalt, copper and nickel. These prehistoric, mineral resources can be found at depths of 4,000-5,000 metres.
The Clarion Clipperton Zone (CCZ) is the main target of deep-sea mining explorations. It is a region as wide as the continental United States, located in international waters, across 4.5 million square kilometres between Hawaii and Mexico in the Eastern Pacific Ocean.
The extraction of polymetallic nodules would require removing a rocky substrate from the ocean floor, using either unmanned Remotely Operated Vehicles (ROVs) or Autonomous Underwater Vehicles (AUVs) operating over 2,000 km from land in the CCZ.
CCZ by Coastal and Marine Hazards and Resources Program, 2018.
Deep sea mining (DSM) is a potential commercial industry that aims to extract rare metals from the seafloor.
- The industry claims it will provide a sustainable future, but at what cost?
- New technologies and devices are being developed to increase comfort and standard of living of humans, requiring new metals. However, extracting new mineral resources all the time will not directly translate into a higher standard of living of the world's population.
The Assembly (comprising 168 States and the European Union as of July 2023) is regularly meeting to work on the document. Up to date, 30 major issues in the ISA regulations are still outstanding — it seems that the regulatory framework will not be ready by the new deadline.
31 licenses have been accorded to 22 contractors to explore over 1.5 million square kilometres of the ocean floor over the last 15 years. The 15-year contracts are for the exploration of polymetallic nodules, polymetallic sulphides, and cobalt-rich ferromanganese crusts in the deep seabed. More specifically, 17 of these contracts are for the exploration in the Clarion-Clipperton Fracture Zone, 1 for the Central Indian Ocean Basin, and finally 1 for the Western Pacific Ocean. Prior to the commencement of its exploratory activities, each contractor is required to submit a contingency plan to effectively respond to any potential incident. Additionally, an annual report on its programme of activities must be submitted.
Gerard Barron is threatening the ISA, pushing it to issue mining permits will it not make it to next due date in July 2025.
Assembly's meeting at the ISA-28. Image by IISD, July 2023.
Leading companies in deep sea mining operations
Pioneers in the industry
- The Metals Company — the undisputed leader in deep sea mining industry.
Mining companies require a nation to sponsor them, to obtain an exploration license. We are referring to deep sea mining in international waters here. In fact, the ISA is not responsible for DSM in national waters: solely governments enjoy national jurisdiction.
This explains how TMC is sponsored by the South Pacific islands of Nauru, Tonga and Kiribati at the same time. By being so, the company is allowed to operate in the roughly 518,000 square kilometres of ocean floor that account for the “reserved areas for developing nations”. While these small nations would not have the necessary economic resources or the capacity to undertake similar exploratory interventions, the involvement of this firm is still very problematic.
The Agency’s Secretary General at the time, Satya N. Nandan, with the support of Michael Lodge, the ISA's Legal Counsel back then, today's the Authority's Secretary General, shared some classified data in early 2007 with David Heydon, a geologist who later became Nautilus’ chief executive, and his son Robert, who also worked there and is now an executive at The Metals Company. These Agency's records disclosed the reserved areas to the company, prior to this knowledge being made available to the concerned developing nations. The correspondence was made public.
Email from Vijay Kodagali to Charles Morgan on DSM reserved areas for developing nations.
A sustainable future can still be possible for Nauru. Nauru is a former Australia and New Zealand protectorate under Commonwealth rule, and a German colony even before that. Its phosphate deposits, practically in the form of guano, had been mined since 1907 for their fertiliser properties. After 1968 independence, the Nauruan government took over the mining operations. Phosphate prices rose from US$10 per ton to over US$65 in the 1970s, and per capita gross domestic product topped US$50,000, second only to Saudi Arabia.The country's terrains were almost entirely scraped and left irremediably unable to be cultivated. Extremely little of the damaged land was restored through the Nauru Rehabilitation Corporation. Fully relying on food imports, Nauruans suffer high rates of diabetes and obesity.
Thus, the Nauruan government was forced to seek an alternative economic path by establishing as a tax haven. As they helped launder a billion US dollars of Russian illicit money through their 400 offshore banks, they ended up being blacklisted by the US Department of the Treasury in 2002.
Similarly to PNG's Manus Island, Indonesia and Australia's very own Christmas Island, Nauru has been hosting an Australian refugee camp (AKA Nauru Regional Processing Centre) ever since 2001 — closed temporarily in 2007, it resumed its operations in 2012. As per the ruling of the Australian Border Force, the facility detains asylum seekers who have reached the Australian mainland by boat (there currently are 100 of them), for an indefinite amount of time, and does so under degrading conditions that violate the fundamental rules of international law. Australia signed an AU$422 M (US$280.3 M) contract with MTC, a US private prisons operator, to oversee Nauru until 2025. Those who are not in the camp live alongside the Nauran community and are incapable of leaving due to the lack of valid travelling documents. The Australian refugee camp business has provided Nauru with over AU$5 B (approximately US$3.3 B) since 2001, when the South Pacific island had an estimated GDP of less than AU$200 M (approximately US$133 M) in 2022.
Although Nauru’s average elevation is 36 metres, about 80% of the population live in coastal areas, at less than 10 metres above sea level. The Republic of Nauru has plans to relocate population and vital infrastructure to higher ground, according to the Department of Climate Change and National Resilience's Higher Ground Initiative (HGI). The project was first conceived in 2021 to address socioeconomic and environmental issues, by restoring the degraded land at higher elevations, which correspond with former phosphate mining areas. Dealing with overpopulated coastal areas is key to sensitively mitigate the risk of housing loss due to coastal erosion and reverse the broader social issues. With the vital support of donors and partners, Nauru is granted the opportunity to travel towards a sustainable future.
Machines intended for deep sea mining off PNG. Image by Nautilus Minerals Inc.
Governmental agencies
The Climate Home News identified 33 representatives of commercial companies, between executives and employees, attending 2023 ISA's Assembly. Companies in fact not only can be part of official state delegations but also can have a say in the meetings. This is an extremely alarming fact.
But not everything is lost. We can count on 24 countries (out of the ISA Council’s 36 member nations) who truly care for the environmental conservation and wellbeing of our international waters and ocean floor. When the ISA is not to trust, these are our true paladins, who fight against the pressure of ruthless contractors and the rhetoric of an obstructionist China.
We might lament little to no progress on the ISA's regulations to be drafted. What is the use of such a legal advancement, when the scientific knowledge about the implications of deep-sea mining operations are quite limited? These 24 countries rightfully call for a moratorium on DSM. We wish to intend the term “moratorium” as a synonym for “ban”, as if the date is never TBA or TBC. Governmental agencies have equally been conducting explorations but have never urged the ISA to release extraction guidelines. Among them, we can find the Government of the Republic of Korea; China Ocean Mineral Resources Research and Development Association; the Institut français de recherche pour l’exploitation de la mer; the Government of India; the Federal Institute for Geosciences and Natural Resources (Germany); the Ministry of Natural Resources and Environment of the Russian Federation; Japan Organization for Metals and Energy Security. This has possibly to do with their calling, which primarily is to fulfil research purposes.
Challenges and considerations
Environmental and social implications
Resource-rich developing countries will be major contributors to the low-carbon transition, while being exposed to significant environmental and social risks. The World Bank’s Climate-Smart Mining Initiative informs about the need for climate-smart mining practices, which will contain negative impacts from mining activities on already vulnerable communities, and the surrounding environment.
What happened in Papua New Guinea (PNG) with Nautilus Minerals Inc. serves as a case study — the Deep Sea Mining Campaign took it as a reference in their 2020 report. This environmental disaster teaches us that even exploratory mining can have “serious impacts” on the local populations.
Jonathan Mesulam and his son campaigning to ban deep sea mining in PNG. Image by Jonathan Mesulam, published in MiningWatch Canada.
Jonathan Mesulam, a resident of New Ireland province in PNG, said in a presentation he gave at a MiningWatch Canada conference in 2019: “It [The Nautilus's Solwara 1 project to mine polymetallic sulphides] affected our unique shark calling culture that is our identity [...] We can call sharks to our canoes. They are a major source of food for our people. When Nautilus started its exploration activities the sharks left our waters.” It appears quite clear that there is no benefit for the local populations to gain, but everything to lose. In 2017, coastal communities launched legal proceedings against the PNG Government. In 2019, the firm declared bankruptcy.It is quite evident that deep-sea mining operations could have serious social implications on the local populations. We do not need to look very far to see that. There is a direct correlation between environmental risks and the life of the communities that live next to extractive operations. There is no remuneration that can make up for the loss of their home. Not to mention that this kind of compensation generally takes a long time to arrive and is very modest. There is no plan B for these populations.
In the specific case of DSM, we are talking of irreversible damage, given the extremely dilated recovery time of deep-sea flora and fauna.
Areas of impact for sediment plumes, noise, and DSM machinery. Image by Amanda Dillon, published in DOI: 10.1073/pnas.2011914117.
Mining polymetallic nodules is expected to damage the whole water column. A single deep sea mining vessel could release up to 120,000 tonnes of sediment per year. Sediment plumes – a combination of operational and re-sedimentation plume – could interrupt carbon sequestration services, increasing water turbidity and reducing photosynthesis. Deep-sea mining could also permanently remove the capability for carbon sequestration associated with fauna.Once discharged, plumes could travel hundreds to thousands of kilometres, impacting not only the midwater column. The release of toxic metals will be accompanied by noise and light, that might affect the life of animals in the whole water column. Thus, DSM might have consequences to fishery life cycles, alongside a smothering effect on free-swimming organisms such as gelatinous zooplankton and micronekton.
Near-surface plumes might also cause plankton blooms, leading to bioaccumulation of toxic metals in marine food webs. Deep-diving species could equally encounter sediment plumes generated in deep or shallower waters. Whales, turtles and tuna regularly make deep dives to 1,000 metres below the surface and deeper.
With seabed sediment being disturbed, stored carbon could be released. They estimate that 172.5 tonnes of carbon would be disturbed every year for every km2 mined. Notably, only 13.9 kg of carbon per km2 is sequestered every year in the Clarion Clipperton Zone: this amount is equal to 0.00804% of the quantity of seafloor carbon disturbed by collector vehicles per year.
Indigenous communities oppose to DMS initiatives: Indigenous leaders from 49 countries and 71 Indigenous groups have requested a ban.
The Civil Society Forum of Tonga wrote a letter to the Prime Minister's Office in 2020, expressing their concerns about deep sea mining. Their country seems to give no consideration to their voices and not to recognise the Free, Prior, and Informed Consent (FPIC) principle they are entitled to. Their ancestral land is at stake, so are their means of subsistence
The letter demands their government to hold public consultations and to perform the necessary due diligence on the contractor they are sponsoring. The letter reads: “Nautilus Minerals of Canada, Bluewater Minerals of Australia and a South Korean government-funded agency the Korea Ocean Research and Development Institute (KORDI). [...] Nautilus Minerals has been going through a challenging financial reform and at the verge of bankruptcy following the failure of its Solwara 1 project venture in PNG. Nautilus Minerals office in Tonga has closed. Tonga Offshore Mining Limited (TOML) a 100% subsidiary of Nautilus Minerals was registered in Tonga as a Tongan registered company. [...] Recent information posted on the Deep Green website and reported by the Matangi Tonga on 23 April 2020, reported Deep Green Metals Inc. acquisition of Tonga Offshore Mining Limited (TOML).” While the civil society have done their homework, it is evident that both the Tongan State and the ISA dangerously secured an exploration license to TOML without caring for the company's financial health.
Letter by Civil Society Forum of Tonga to PM’s Office, June 2020.
FYI, the ISA's Council never happened to refuse a permit. Between flag states, the ISA, states that sponsor DSM, and adjacent coastal states – who would be considered liable for any possible environmental damage? “There are international treaties setting out certain responsibilities for sponsoring States, flag States and port States; but how these jurisdictions interact with each other and with the ISA’s RRPs (the Rules, Regulations, and Procedures for deep-sea mining) is not always clear.” There in fact are multiple regulatory regimes in place. Both at the ISA (as per the draft regulations) and under state jurisdictions, DSM companies will be required to provide financial guarantees for restoration obligations before mining begins. A study estimates that restoring only 10% of the 500,000 km2 that might be mined in the Pacific would cost US$50 billion.- The industry’s claims of sustainability are questionable, with new battery technology and technical risks being major concerns.
- Deep seabed mining poses significant environmental risks, including damage to deep sea ecosystems and cultural heritage.
- The International Seabed Authority has a duty to protect objects of an archaeological and historical nature found in the Area, which may be important examples of underwater cultural heritage.
Regulatory frameworks and research
International Seabed Authority considerations
- The International Seabed Authority has been deliberating regulations governing commercial mining of the deep seafloor since 2014.
- The “2-year rule” compels ISA to finalize the rules by mid-2023, or ISA may accept applications for exploitation even in the absence of formal guidelines.
- The United Nations Convention on the Law of the Sea outlines the areas of national jurisdiction as a 12-nautical-mile territorial sea; an exclusive economic zone of up to 200 nautical miles and a continental shelf.
On the governmental level, national delegations are grappling with the potential economic benefits of deep sea mining while others made theirs the mission to strongly advocate for the environmental risks. These countries are tasked with balancing national interests with global responsibilities. As mentioned above, 24 countries – including Chile, France, New Zealand, Panama, Fiji, Samoa, Tuvalu, Vanuatu, Solomon Islands and the Federal States of Micronesia – have called for a moratorium on DSM.
The United States participate in the ISA’s meetings as an observer as they are not a member of the ISA, since they are not a signatory of the Law of the Sea Treaty. Nevertheless, US delegate Gregory O’Brien did not appear very supportive od DSM when telling the Council: “A broad range of interests, including those of our Indigenous communities that rely on an accessible and sustainable marine environment, have the potential to be directly impacted by negative impacts and effects from exploitation activities.”
Most importantly, Hawaii, California, Oregon and Washington have banned deep sea mining in state waters.
Commercial entities, such as The Metals Company, are at the forefront of deep sea mining exploration and development. Driven by the promise of lucrative returns, this company has been accused of gaslighting their investors. The race to secure mining rights is heating up, as the tightrope walker TMC cannot hold on, resisting insolvency much longer. Their activities are closely monitored by environmental groups and the public, raising questions about corporate responsibility and the potential for exploitation.
The same Gerard Barron learnt from his own naiveté, after taking someone and conversely, himself being taken to court 4 times. TMC and/or their personnel was accused of making false or misleading statements, and in 2023, a lawsuit alleged breach of good faith. Ballon promoted deep sea mining and the relevant financial gain a little too light-heartedly, and optimistically. He made the process and timeline behind conducting deep sea mining explorations, structuring the regulatory process, and eventually extracting polymetallic nodules and producing the relevant metals, sound a little too easy. On the other hand, there a lot of hurdles and considerations to take into account on the pathway to DSM-town.
TMC's CEO is a weathered individual by now: in 2022, he prudently disclosed 25 extraction and market risks associated with his programme to the US Securities and Exchange Commission (SEC). There definitely are loads of uncertainties on his plate, as he started adding some clauses at the bottom of his official statements to the investors. It is likely that the operations and the sale of the minerals might end up not being that profitable. This is a risk he cannot fully hide anymore! The veil of Maya is quite torn by now, and lets investors get a glimpse at DSM for what it really is.
TMC, DeepGreen Metals Inc., TOML, Deep Sea Mining Finance Ltd. (DSMF), and Nautilus Minerals Inc. overlaps with many of the same individuals. It comes as no surprise to learn that the funding behind these entities is also intertwined.
Underlying these dynamics is the internal politics landscape of the International Seabed Authority, the independent UN agency responsible for regulating deep-sea mining. The ISA is tasked with striking a balance between commercial interests and environmental protection.
Conflicts of interest within the organisation can hinder progress and create opportunities for exploitation. As the pressure to develop mining regulations intensifies, the ISA faces the challenge of ensuring that the ocean’s resources are managed sustainably for the benefit of all humankind. Yet, conflicts of interest — like stagnant water which rots the wooden pillars — seem to structurally threaten the ability of this body to take unbiased decisions. The ISA somehow shows hesitation in safeguarding our ocean bed.
From left to right: Gerard Barron from Nauru Ocean Resources Inc (NORI); Anastasia Julius, Nauru; and Corey McLachlan, NORI. Image by IISD, July 2023.
We can only wish that bureaucratic quibbles will further delay the project, not allowing it to progress.The International Seabed Authority will collect a royalty from contractors extracting the metals. Nonetheless, neither the payment structure nor the amount of the royalty has been agreed yet. The ISA contracted the MIT (Massachusetts Institute of Technology) to develop a financial model. The model – which initially foresaw a low fixed rate calculated on the value of the metals contained in the polymetallic nodules – shifted to focus on maximizing revenues for the ISA, by capitalising on the years of commercial production and/or metal prices. The royalty can vary between 2.5 and 30%, a substantial difference which could majorly affect the returns for investors, and the feasibility of the extractive project.
On top of this, UNCLOS (United Nations Convention on the Law of the Sea) envisages the creation of an enterprise (referred to as “the Enterprise”) that will enjoy an autonomous statute. According to the declaration to the Los Angeles Times, of an attorney representing the International Seabed Authority, the Enterprise will be “supervised by an elected Governing Board and administered by an elected Director-General. […] Pending its operationalisation and consistent with the provisions of UNCLOS, the ISA Secretariat carries out certain limited and prescribed functions which mainly relate to the preparation of studies and assessments. Accordingly, neither its establishment nor these limited roles create any actual or potential conflicts of interest.” It is difficult to trust that the management of such entity could not be subject to another conflict of interest. While being independent from the ISA, the Enterprise is not exempt from a tension between business profitability and the intrinsic nature of an international regulatory body.
The future of deep sea mining
DSM might not prove competitive
A 2020 analysis commissioned by the ISA concludes the relatively high-cost minerals from the seabed might not be competitive. The high cost of deep sea mining operations and production make the industry uncompetitive all along in terms of price.
A recent study reveals that mineral demand can incidentally be reduced by 58% by 2050 thanks to new technology, circular economy practices and recycling. We learn from the 2022 Circularity Gap Report that today, only 8.6% of the world’s materials are part of a circular economy: by 2050, researchers estimate that 45–52% of cobalt, 22–27% of lithium, and 40–46% of nickel could be supplied from recycled materials.
We might not be quite there yet, but these recycling practices will allow us to reshape our future. The way to go is disinvesting on short-sighted deep sea mining initiatives to invest on the innovation of technology and subtechnology. After all, Louisa Casson from Greenpeacewas not aiming too far.
A 2022 report — entitled The Future is Circular: Circular Economy and Critical Minerals for the Green Transition — informs us that it would be possible to decrease the demand for cobalt, nickel, and manganese by 40-50% between 2022 and 2050, to new chemistries for electric vehicle batteries, while reducing dependence on lithium-ion batteries. This is great news, that someone like Barron might not want to share at all, or not stress too much when pitching to his potential investors.
The UNEP FI (United Nations Environment Programme Finance Initiative) appeals banks and financial institutions to refrain from investing in deep sea mining projects. The World Bank Group, openly warns against the risks of the DSM industry.
Recycling requires adequate policy measures, while concentrated minerals register an extremely high level of demand risk, particularly for producers of such minerals.
Technical innovation translates into technology and subtechnologies (the latter to be considered as the variety of practical applications of a particular technology, such as energy storage or solar PV), which can prompt efficiency improvements. At the same time, efforts to decarbonise electricity production and meet specific mitigation scenarios are expected to play an incidental role in shaping a better usage of minerals and facilitating recycling. It is important to note that like any other land mine, DSM production would run on fossil fuels and coal on main-land facilities.
EV production vs. prices of cobalt, nickel, and copper, 2016-2023 (adjusted for inflation). Image by Victor Vescovo, published in TradingEconomics.com.
The Ocean Foundation masterfully highlights that commercial metals prices do not rise in tandem with EV production: for instance, EV production is up 2,000% and cobalt market prices are down 10%, between 2016 and 2023. A Bloomberg article from February 2024 argues that “the nickel industry has imploded.” These findings simply confirm that TMC’s business model is all wrong: it fully relies on expected growth in demand for EV minerals, without contemplating any fluctutation.Normally, the ISA will not concede mining licenses until scientific research will be able to clarify the impact of DSM operations.
- The deep sea mining industry must address the significant environmental and social implications of deep seabed mining.
- The future of deep sea mining depends on the development of regulatory frameworks.