4th Mining 2030 Investor Roundtable: Deep-Sea Mining
On 24th June, the Mining 2030 Investor Agenda – the investor collaboration engaging with the global mining sector and led by the Church of England Pensions Board – hosted its fourth roundtable. The event was the second to focus on deep-sea mining (DSM), a nascent industry seen by some as a path to secure critical minerals for the low-carbon transition.
In Mining 2030’s first DSM roundtable, investors heard that the sector faces significant environmental, legal and financial uncertainties. However, in this follow-up roundtable, Michael Lodge, Secretary-General of the International Seabed Authority (ISA), argued that DSM will be a robustly regulated and monitored industry, and Gerard Barron, Chairman & CEO of The Metals Company (TMC), maintained the practice can deliver huge quantities of critical minerals needed for the low-carbon transition, with significantly lower impact to people and planet when compared to land-based mining.
Key takeaways from the roundtable include:
The ISA regulates the seabed beyond national jurisdiction, which represents 54% of the seafloor and is known as the Area. Under the United Nations Convention on the Law of the Sea (UNCLOS), the ISA is mandated to ensure the conservation and equitable use of ocean and sea resources, as well as the study and protection of the marine environment.
Image credit: The International Seabed Authority
ISA Secretary-General Michael Lodge told investors that DSM exploration is rigorously regulated, with the Authority currently working to establish exploitation regulations. Both exploration and exploitation regulations are established by consensus between 168 member states and based on the best scientific evidence, with contractors accountable to the ISA and required to act in line with good industry practice and with full transparency, investors heard.
In response to investor concerns that data be independently verified, Lodge clarified that requirements on contractors include mandatory baseline data collection which must be submitted to the ISA and made publicly available in the global Deep Data database. Data is reviewed by an independent expert body the Legal and Technical Commission, and in the future an independent inspectorate will be charged with constant and robust monitoring of every DSM-related activity taking place in the Area.
Lodge emphasised that deep-sea exploration is the only human activity managed for the global good by an international organisation. Under UNCLOS, every state has the right to explore and exploit marine minerals in the Area, provided that the activity be conducted in accordance with the rules and regulation of the ISA and for the benefit of humankind. Meanwhile, mineral resources located in coastal states’ Exclusive Economic Zones can be exploited with no specific requirements related to environmental protections or access and benefit sharing.
The ISA is obligated to share monetary and non-monetary benefits derived from mineral resource exploitation, with preferential access rights for developing countries stipulated under UNCLOS. The regulations for sharing financial benefits are currently under discussion and will establish whether ISA revenues will be divided among governments or used to establish a substantial global fund aimed at environmental protection and knowledge sharing. The ISA’s efforts to share non-monetary benefits have to date included scientific knowledge and technology transfer, and training and capacity building for developing states.
Lodge maintained that the area likely to be exploited for deep-sea minerals is very small. Gerard Barron, Chairman & CEO of The Metals Company (TMC), echoed Lodge’s assertion, explaining that polymetallic nodule exploration areas in the Clarion-Clipperton Zone (CCZ) (the Pacific Ocean floor area accounting for 80% of nodule exploration globally) represent just 0.4% of the global seafloor – shown in blue in the image on the next page, with the grey grid representing the 361 million km² of ocean seafloor globally.
Image credit: The Metals Company
The half-sized blue square shows the area of seafloor that would be impacted every year by the nodule collection industry, under the assumption that 50% of exploration areas are exploited over a 30-year period.
Image credit: The Metals Company
Barron indicated the remarkable mineral supply potential of the deep sea, with nodules in the Pacific Ocean holding more manganese, nickel, and cobalt than the entire global terrestrial reserve base – enough to electrify the entire global carfleet several times over.
Michael Lodge maintained that some DSM exploration areas are among the best-studied areas of seafloor on the planet, with exploration and data collection having started in the 1970s. Speakers signalled that research on polymetallic nodules – the best-studied typology of deep-sea mineral – outpaces research on many other mineral sources, while TMC is currently putting together what it says will be the most comprehensive study of ocean life and the impacts of nodule collection systems ever conducted in the CCZ.
Barron maintained that polymetallic nodule extraction would cause vastly reduced impacts on climate change, land use, water use, tailings and biomass, when compared to land-based mining for nickel, cobalt, copper and manganese, citing peer-reviewed lifecycle impact studies, funded and contributed to by TMC. For nickel, polymetallic nodule exploitation could provide an alternative to Indonesian nickel laterites – the main source of projected supply growth over the coming decade and beyond – the mining and processing of which is anticipated to carry serious environmental and social costs, including impacts on biodiversity and carbon sinks, and the production of vast amounts of toxic tailings.
Image credit: The Metals Company
Biodiversity is the biggest area of uncertainty, but conservation, technology and operational design can help mitigate the risk of damage, investors heard. For example, the ISA has designated 43%, or 1.9 million km², of the CCZ as a protected area in line with recommendations from deep-sea scientists, aiming to conserve a representative network of habitats and ecological communities that could be impacted by DSM.
Image credit: The Metals Company