Deep-sea mining is close to reality despite environmental concerns

The International Seabed Authority, a United Nations observer organization that regulates deep-sea mining in international waters, is drawing up a final regulatory framework for deep-sea mining that all 168 members would need to agree to within the next 12 months. The U.S. isn’t a member of the ISA. With or without the finalized rules, the ISA will permit seabed mining by July 2023, according to people familiar with the matter.

The intent of deep-sea mining is to scrape the ocean floor for polymetallic nodules—tennis-ball-size pieces of rock that contain iron and manganese oxide layers. A seabed in the Pacific Ocean called the Clarion Clipperton Zone, which cover 1.7 million square miles between Mexico and Hawaii, contains a high volume of nodules made of battery metals, such as cobalt, manganese and lithium. The International Seabed Authority in 2010 estimated the zone had roughly 30 billion metric tons of nodules.

Cobalt and other metals used in making rechargeable batteries that power products from phones to electric vehicles are in high demand, setting off a race to find and procure them. Prices of these metals are soaring as mining for them comes under scrutiny, curtailing supply.

Since the ISA was formed in 1994, the agency has facilitated testing and exploration of the ocean bottom. It has licensed 22 contractors to explore the deep sea with a focus on scientific exploration, though some of the licenses went to units of global companies, including Lockheed Martin Corp. and DEME Group NV. In June 2021, the Pacific island nation the Republic of Nauru and startup Metals Co. applied to the ISA to mine in the Clarion Clipperton Zone, triggering a rule that required the agency to establish a code that would allow “exploitation" for deep-sea resources within two years.

It is unclear if there will be a market for deep-sea mined metals. Auto makers, such as Groupe Renault, Bayerische Motoren Werke AG and Volkswagen AG, have signed a moratorium effort led by Greenpeace agreeing not to buy cobalt sourced from seabed mining.

Other similar protests from civil-society groups such as the Deep Sea Conservation Coalition have also called for a halt while the European Union has advocated for prohibiting deep-sea mining until “scientific gaps are properly filled."

Some Pacific island communities with a large span of territorial waters in proportion with their land mass, however, believe there is a sustainable way to mine these minerals and provide a steady source of revenue for their economies.

The Cook Islands, for instance, an island nation 2,000 miles from the coast of New Zealand and located south of the Clarion Clipperton Zone, is among the few countries already exploring the idea of scraping the ocean bottom for metals, intent on using the resources to boost its economic health. The Cook Islands, with a population of 17,000 people, is a member of the ISA but in theory its territorial waters sit outside of the authority’s jurisdiction.

“We’ve known about these nodules for decades and we’ve known about this potential," said Alex Herman, Seabed Minerals Commissioner for the Cook Islands Seabed Minerals Authority. “We want to be able to realize the potential [of the nodules], but we want to realize it our way."

The Cook Islands economic zone is estimated to contain 12 billion tons of nodules especially rich in cobalt.

Earlier this year, the nation handed out three exploration licenses to private companies—CIC Ltd., CIIC Seabed Resources Ltd. in a joint venture with Belgium’s Global Sea Mineral Resources NV, and Moana Minerals Inc.—to explore the seabed within its territorial waters and determine the feasibility of sustainable mining over the next five years. The exploration alone is expected to raise NZ$200 million, equivalent to $128 million, over the five-year period, which Ms. Herman described as “huge" for a developing nation.

Ms. Herman said it was important the companies understood the island nation’s values to ensure confidence that licensees “could develop the sector without serious harm to the marine environment and with benefits to the owners of those minerals, which is our people," Ms Herman said, adding “the onus is on them to demonstrate that."

The Cook Islands had previously relied heavily on tourism to fuel its economy, which like most nations in the region, was heavily decimated by the pandemic. Tourism accounted for about 65% of the nation’s nominal GDP prior to the pandemic, according to the Cook Islands Statistics Office.

Tonga, the Republic of Kiribati and Nauru are other South Pacific countries that support mining.

Palau, another Pacific island nation, announced its opposition to deep-sea mining in June, months after the Cook Islands’ move, calling for a moratorium on the issue, warning about the damage to marine environments and “threatening one of the world’s largest carbon sinks."

Other island nations, including Fiji and Vanuatu, have previously voiced opposition as well.

For now, the ISA is firm in saying that “deep-seabed mining will not start until the necessary regulatory framework is in place." The rules are intended to protect the integrity of ocean life while allowing commercial use, the ISA says.

Many members, environmental organizations and lawyers familiar with the regulations say that in theory a pending application, such as the one from Nauru and Metals Co., can be approved even in the absence of finalized regulations. Companies and nonprofits suggest that the ISA is being forced to confirm deep-sea mining rules, spelling out what is and isn’t allowed, after more than 20 years of discussion on the issue.

“If you structure this right you provide the right kind of incentives for companies to innovate and that’s really what needs to happen," Duncan Wood, vice president for strategy and new initiatives at the Washington-based Wilson Center.

“That’s why regulation is there is to try to minimize harm, increase efficiency and to try to make the market work better and corporations respond by being innovative," Mr. Wood added