The Growth Of Deep-Sea Mining

An economic opportunity or an environmental disaster?

Matthew Averay
Jul 1 · 5 min read

As the global mining landscape changes, miners are increasingly looking toward new territories to operate in. Some of the recent more otherworldly suggestions for resource prospecting have been mining on the lunar surface and prospecting on asteroids. Further down to earth there are moves to license, prospect and commence mining operations in the depths of the sea. This trend has the potential to improve economic growth in some sectors but carries risks which need to be assessed and mitigated.

Given the previous mistakes in mining operations, perhaps the industry is caught between the devil and the deep blue sea?

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Numerous announcements for proposed deep-sea mining operations have raised serious environmental concerns that are being weighed against the economic benefits deep-sea mining could bring. The global trend seems to be leaning towards the miners but there is a strong need for regulation and monitoring the impacts on the world’s oceans. How these processes are handled could affect us all.

Deep-sea mining consists of prospecting for and then mining mineral deposits below a depth of 200 meters. It is this depth that lends some proponents of deep-sea mining to claim the environmental impact will be limited to the deep. There is a lot of ocean to potentially access through these processes. For example, the Pacific Ocean is larger than all the landmasses of the world combined and deep-sea areas are said to cover more than 65% of the Earth’s surface.

Commercial mining of deep-sea resources is being driven forward by a unique mix of rising global demand for resources, dwindling supplies and the maturing of technology to facilitate the process. This trident scenario has created an opportunity for return on investment that is the impetus for corporate interest in deep-sea mining. As the opportunities for return grow, the pressures on nations for licenses increases.

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The international body responsible for regulating areas beyond national jurisdictions is the International Seabed Authority (ISA). This organisation comprises 167 member states as well as the European Union. Mandated to control and regulate all the mineral-related activities on international seabeds for “the benefit of mankind as a whole”, it was set up under the UN Convention on the Law of the Sea.

By 2018 the ISA had already issued 29 contracts for the exploration of deep-sea mineral deposits. Currently, more than 1.5 million km2 of international seabeds in the Pacific and Indian oceans have been allocated for the exploration of minerals. This is an area roughly equivalent to the size of Mongolia. For an unelected global body, the ISA has high expectations to live up too “for the benefit of mankind as a whole”. Exploration is the first step but the quality of deep-sea mining regulation will be even more important.

Developments are happening rapidly in the deep-sea mining-sector. The world’s first license to operate a deep-sea mine was granted to a Canadian company, Nautilus Minerals, for seabeds off the coast of Papua New Guinea. There are concerns about what will happen to the ecosystem of the area as well as the impacts on local communities, as many of these mining techniques are still untested. The fact that the mining of resources in Papua New Guinea has historically been plagued with issues does not engender confidence in the integrity of the process.

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There is a strange convergence of economic factors at play with deep-sea mining. Many locations suitable for offshore mineral mining are in the vicinity of small islands. A large proportion of these territories are relatively impoverished and have hitherto generated a significant proportion of their GDP through tourism. During the current global lockdown, these places are feeling the economic strain caused by the lack of tourism. These factors combined amount to the growth of an economic climate conducive to granting licenses for deep-sea mining.

The tiny nation of the Cook Islands has justified their move to allow miners to prospect for deep-sea minerals with the need to reduce their country’s economic dependence on tourism. The economy of the Cook Islands has been significantly impacted by the global lockdown and the government will shortly allow miners to prospect for resources in the seas around the islands. Interestingly this seems to be a total about-face in policy from the 2017 designation of 2 million square kilometres as a marine protected area. Just two years later new legislation was passed to undercut the marine protection designation and allow the issuance of deep-sea mining permits. It has traditionally been the case that economic factors take precedence over environmental protection.

As the deep-sea mining industry grows it must be balanced with appropriate regulation and monitoring to accurately ascertain the impact of the process. There are opportunities to be leveraged in deep-sea operations but they should not take precedence over the health of our oceans. John F. Kennedy was prescient in his statement:

“All of us have in our veins the exact same percentage of salt in our blood that exists in the ocean, and, therefore, we have salt in our blood, in our sweat, in our tears. We are tied to the ocean. And when we go back to the sea — whether it is to sail or to watch it — we are going back from whence we came.”

The ocean deserves our respect because if the oceans die we die with it. The challenge is to balance the needs of society with the essential requirement to preserve our oceans.

Enegra Group Ltd (LL15959) is a commodity trading company focused on resources in Southeast Asia. Equity in Enegra has been tokenised via the EGX security token. For enquires related to the purchase of EGX please contact support@enegragroup.com.

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