Historic Decision Delays Deep-Sea Mining
Part 3 of a series of guest blog posts written by students in the Masters of the Environment Program at the University of Colorado, Boulder, as part of a capstone project in collaboration with the Inland Ocean Coalition. The project is tracking the potential decision to commence mining the deep sea, the complexities surrounding this monumental decision, and conveying the importance of this issue to the public. Stay tuned for the next post in this series!
On Friday, July 21st, the International Seabed Authority (ISA) decided to delay deep-sea mining and the harm it will cause the world's ocean by declaring that it will not adopt the mining code until at least 2025. This decision came after intense deliberations on the subject from July 10-28 in Kingston, Jamaica. Despite the delay, a legal loophole still allows countries to submit an application to the ISA to commence deep-sea mining. While there is a low probability of this happening, the ISA must consider applications it receives. Experts believe that interested countries like Nauru, Norway, China, and the UK will not apply for an extraction license before the ISA adopts the mining code.
As the international body responsible for protecting international waters from harmful activities, the ISA and its member states have spent the last decade attempting to develop a mining code for the possible extraction of rare earth metals from the deep sea—including nickel, cobalt, manganese, and copper—in the majority of the world’s ocean that falls outside of national jurisdictions.. The rush by some to start mining is multifaceted, as companies and countries have sunk millions of dollars into this potential industry and extracting minerals from the seabed would allow them to recoup their investments.
Advocates believe that the minerals found on the seabed can supply the metals required for a global renewable energy transition. Opponents maintain that the deep sea is a vastly unknown and yet-to-be discovered ecosystem that deep-sea mining will effectively destroy before scientists have even scratched the surface of understanding this most remote area of our planet. Scientists also do not understand what the impacts of deep-sea mining will be on the ocean as a whole or on marine wildlife. Collecting and processing scientific data from the deep sea takes time, so opponents worry that a few select countries and corporations are pressuring the ISA to allow commercial extraction of minerals and that profit-driven corporations are deciding the fate of the deep sea.
Without adopting a mining code, miners are in a legal limbo where they cannot start selling the metals needed to recoup their investments. The triggering of an ISA provision known as the two-year rule required the mining code to be completed by July of 2023. However, indisputable evidence of irreversible environmental damage in the deep sea, concerns about the ISA's ability to effectively monitor and manage the environmental damage from deep-sea mining, and concerns over the ISA's capacity to develop the mining code have put a global spotlight on this formerly unknown agency and its designated role of protecting the deep sea. Check out the previous blog post in this series for a more in-depth explanation of the ISA’s Mining code and the Two-Year Rule.
While many countries are in favor of deep-sea mining, others are advocating for a moratorium or ban on the industry altogether, with France, Chile and Costa Rica being the strongest proponents of this. These countries and others want to begin discussions in 2024 about adopting a moratorium on deep sea mining,, but they will have to go against pro-deep sea mining China, which was vocally against scheduling a discussion about a moratorium in 2024.
The United States, anxious to reduce its reliance on China for critical metals, may join the pro-deep sea mining fray, although US support is divided. Some US military and political leaders are eager to involve the U.S. in nodule processing operations, as the Inflation Reduction Act has sparked a demand for critical metals as the United States seeks to transition to more renewable energy options and requires reliable trading partners for metals. However, US lawmakers have recently introduced the American Seabed Protection Act and the International Seabed Protection Act, the first of which would place a moratorium on mining in US waters, while the latter would mandate the US place a moratorium on international deep-sea mining. While the US could either become a leader in the deep-sea mining industry or a leader in ocean protection, countries like China will continue to push for the start of mining in upcoming 2024 ISA meetings.
Issues with the International Seabed Authority
There is a growing consensus that regulations for deep-sea mining are being developed too quickly by a regulatory body with unresolved issues. Recently, many critics have called out the ISA for its evident lack of transparency and significant conflicts of interest. These concerns stem from the secretive nature of the ISA’s Legal and Technical Commission meetings, the complete anonymity of mining contractors in applications, a lack of background checks on contractors to assess whether they are capable of mining responsibly, and massive funding allotments provided to the ISA from each mining application. Further, a mandate in the ISA's foundational documents requires the ISA to have a system for distributing a portion of profits from deep-sea mining to developing countries, called benefit sharing, which the ISA has yet to establish.
Critics have pointed out that the ISA is severely ill-equipped to regulate and monitor a massive extraction-based industry in Earth's most remote ecosystems. By delaying the finalization of the mining code until 2025, the ISA may have more time to develop procedures for increased transparency, resolve funding issues that lead to conflicts of interest, gather the resources needed for effective regulation and monitoring, and create a payment system for distributing the revenues from deep-sea mining. However, due to the complexity of these issues and how ingrained they are in the ISA, it is doubtful that the ISA will address these issues in the next two years.
Some advocates are even calling for a structural overhaul of the ISA since it was created in an era where climate change was not an accepted fact and policy experts believed that the deep sea was devoid of life. Farah Obaidullah from Women4Oceans has called the ISA a dinosaur, because it does not reflect the values of the 21st century like the recently enacted agreement under the United Nations Convention on the Law of the Sea on the Conservation and Sustainable Use of Marine Biological Diversity of Areas beyond National Jurisdiction that is based on values like tackling climate change, protecting biodiversity, and protecting the ocean from harms like deep-sea mining.
Environmental Impacts
There has been growing concern over the environmental damage that would ensue if this industry is given the green light. Mining nodules from the deep seabed would eliminate a substance that has taken millions of years to form and is a habitat for countless species in the deep ocean, an area that represents 95% of the Earth’s habitable biosphere. Fauna and Flora, an international wildlife conservation nonprofit, says deep-sea mining could cause “extensive and irreversible, permanent and immitigable impacts.” These impacts vary from widespread deep-sea habitat removal, sediment plumes that could smother life on the deep-sea bed, to disruptions in the global carbon cycle.
Some advocates say that artificial nodules can be used to restore areas where mining has occurred and provide new habitat. Numerous critics have debunked this point, as the costs of such a project would not only be enormous, but it would be virtually impossible for humans to replicate the bacteria found in deep-sea nodules. According to a report from the nonprofit Planet Tracker, a project to replace nodules found in deep-sea abyssal plains would cost $5.3 - $5.7 million per square kilometer. The Clarion Clipperton Zone, where most of the polymetallic nodule collection would occur, is 4.5 million square kilometers. The costs of artificial habitat restoration would be larger than the profits made by any deep-sea mining company. According to the Planet Tracker report, “like crude oil, the polymetallic nodules at the centre of mining interests take tens of millions of years to form, but unlike crude oil, they are an essential habitat for life: over half of the species living in the Pacific abyssal plains depend on nodules. Much of the habitat and biodiversity loss caused by deep sea mining would therefore essentially be permanent.”
Critics of deep-sea mining have also voiced concerns over social impacts, such as harm to economically and culturally valuable ocean resources, including fisheries and other ecosystem services. For example, climate change has shifted tuna migration patterns towards areas in the Pacific Ocean where deep-sea mining impacts such as sediment plumes, noise, and light pollution would occur. While more research is needed, these impacts from deep-sea mining could have far-reaching consequences for tuna fisheries that countless individuals and many countries in the Pacific rely on.
Stemming from these environmental concerns, many companies, governments, and scientists have called for a delay or ban on deep-sea mining. As of July 2023, 21 countries, 34 companies, and 769 scientists have voiced opposition.
Industry Impacts
Many deep-sea mining companies may be in severe financial trouble as a result of the ISA’s decision. One such company is Canadian-based The Metals Company (TMC), which has been at the forefront of the push for deep-sea mining and a staunch supporter of the prospective industry. Without a mining code or approved plan of work, companies can collect nodules for research under an exploration license, but they cannot sell any nodules and make back their investments, causing financial difficulties and insecurity for deep-sea mining companies. According to the Wall Street Journal, since TMC went public in 2021, it has lost about 90% of its value and has had multiple delisting notices from Nasdaq due to share prices dropping below $1. Following the decision by the ISA to delay adoption of the mining code, TMC share prices dropped 20%.
The Metals Company CEO, Gerard Barron, responded to Friday’s decision with disappointment and support. While the delay creates another hurdle for the company, the new deadline comes with an ISA roadmap to finalizing a mining code. Although TMC’s subsidiary, Nauru Ocean Resources Inc (NORI), reserves the right to submit an application before the regulations are finished, Barron expressed plans to wait for the ISA to complete the mining code before submitting an exploitation application. It is currently unknown what would happen if NORI submitted an application although technically the ISA is required to give provisional approval.
The delay may also impact corporate and investor interest. Before the ISA’s decision, financial confidence in deep-sea mining seemed to be in decline. In March 2023, Lockheed Martin sold a subsidiary that held two ISA exploration contracts. In May 2023, the shipping group Maersk sold its shares in TMC amid growing concerns over environmental risks. A 2022 briefing paper from the UN Environment Programme Finance Initiative characterized deep-sea mining investment risks as high due to growing opposition by crucial financial players and regulatory uncertainty. Now that deep-sea mining companies will not be able to make a profit until at least 2025, investment may take an even greater downturn.
