Deep-sea mining, a murky business for the Global South

Controversies are rapidly unfurling in the mysterious depths of our oceans and the secretive confines of boardrooms. A furtive pursuit of precious metals in uncharted waters is now raising concerns among scientists and environmentalists. Recently, Norway made history as the first country to approve the controversial practice of deep-sea mining, further intensifying the debate.

More than 20 countries have called for a moratorium on international deep-sea mining. Additionally, over 800 marine scientists and experts have signed a petition highlighting the potential risks to environments, societies and economies. Critics argue that mining in international waters poses threats to pristine marine environments, privatizes shared resources, and exploits economically vulnerable countries in the Global South. “This covert privatization is only benefiting a small group of investors,” said Andrew Whitmore, a financial advisor to the Ocean Foundation.

Deep-sea mining primarily targets polymetallic nodules: potato-sized rocks found over 4,000 meters deep. These nodules are called “batteries in a rock” due to their high content of copper, cobalt, manganese and nickel — key components in smartphone and computer batteries. According to the International Energy Agency, demand for these raw materials generated by the global shift to green energy (electric car batteries, wind turbines, photovoltaic solar panels, etc.) will double by 2040, potentially leading to severe shortages of these “green metals.”

The International Seabed Authority (ISA), based in Kingston, Jamaica, holds the keys to the world’s marine treasures. Established almost 30 years ago, this autonomous institution is the U.N.’s authority on international seabed issues. Its purpose is to manage the resources in international waters in a sustainable and equitable manner.

ISA has issued over 30 exploration contracts since its inception. These contracts allow private and public companies to conduct environmental research and test machinery for mineral extraction. However, the minerals extracted under these contracts cannot be commercialized. The next step is to obtain a commercial contract, which grants exploitation rights for seabed resources in international waters. Despite lobbying by countries like Norway and Mexico, ISA has yet to grant any commercial licenses. A final vote on the matter may happen later this year. The Metals Company (TMC), a Canadian-based company, was one of the first to apply for a commercial contract, as did the Chinese government, which currently holds five exploration contracts.

“Reserved areas” for equitable access

So far, ISA has granted exploration contracts to eight companies and developing countries to operate in the Clarion-Clipperton Zone (CCZ) located in the Pacific Ocean between Hawaii and Mexico. The CCZ is one of the most resource-rich seabed areas and borders the Exclusive Economic Zones of the Cook Islands, Kiribati, Nauru and Tonga.

The CCZ is a deep trench about the size of the European Union, containing around 21 billion tons of polymetallic nodules. In the CCZ area between Nauru and Tonga, TMC estimates there is enough nickel, copper, cobalt and manganese to power 280 million vehicles, equivalent to all the passenger vehicles in the U.S. The Metals Company expects profits of over $30 billion during the 30-year extraction project.

To access these lucrative underwater resources, private companies must abide by the United Nations Convention on the Law of the Sea (UNCLOS). This convention established a system of “reserved areas” to ensure equitable access by developing countries to seabed mineral resources. The developing nations that own these minerals often face climate change impacts like sea level rise, coastal erosion and drought. They also have limited opportunities for economic diversification and rely heavily on external expertise, technology and financial support. “It’s a system that’s prone to abuse,” said Pradeep Singh, an expert on ocean governance and climate policy, and a fellow at the Research Institute for Sustainability in Potsdam, Germany.

To meet reserved-area requirements, TMC has partnered with three small Micronesian nations in the central Pacific Ocean: Kiribati (population 131,000), Tonga (population 107,000) and Nauru (population 13,000). They aim to explore and potentially exploit the seabed for metals. But the benefits for small countries of partnering in these mining ventures remain unclear. The details of these agreements have not been made public, and experts at the ISA meeting in July 2023 say revenue sharing between rich nations and small islands has not been a main topic of discussion.

“A long line of people reap the rewards of a resource that, inherently, should be acknowledged as a global public good. Instead, they created a system that effectively privatizes this resource.”

Andrew Whitmore, The Ocean Foundation

TMC plans to support local economies in sponsoring states like Nauru through royalties and investments, but the specific details are unclear due to private contracts. “We expect to be a major contributor to Nauru’s economy once production begins,” said TMC spokesperson Rory Usher.

Privatization of the seabed

Currently, over 60% of the contracts in the CCZ between private entities and developing countries have been allocated to two Western private companies. Governments can grant mining access to specific areas, expecting that their all of their citizens will benefit from the resulting revenue. But experts say this system is an artifice that effectively privatizes parts of the seabed. “A long line of people reap the rewards of a resource that, inherently, should be acknowledged as a global public good. Instead, they created a system that effectively privatizes this resource,” said Andrew Whitmore of the Ocean Foundation.

ISA has not yet determined the appropriate amount of revenue to be allocated as compensation to land-mining nations affected by deep-sea mining activities. Additionally, ISA has not specified the number of authorized operations. We reached out to ISA for clarification, but did not receive a response before publication.

“To ensure the ISA’s financial viability, approving numerous mining activities may be necessary. However, a large number of mining concessions could overwhelm the ocean’s capacity, which is undesirable,” said Pradeep Singh. “If deep-sea mining doesn’t make sense from a revenue-sharing perspective, then it doesn’t make sense to allow it at all.” Singh, with seven years of deep-sea mining policy research experience, participated in the most recent ISA meeting. “People need to understand that ISA’s mandate is to make seabed mining happen,” said one delegate at that meeting.

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