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The Commercial Challenges
Of Deep-Seabed Mining
The potential mineral resource base of the deep sea is huge, reflecting the fact that this is the largest landform on the planet. Just like on dry land, the mineral deposits vary in quality, but unlike on dry land, the best, highest-grade deposits remain untouched, available to those who can meet the challenges of their discovery and development.
Shallow-water mining of commodities such as alluvial tin and gold has been done for decades, and if diamonds and sand and gravel are included, it adds up to a massive industry with billions of tonnes moved yearly. Deep-sea mining has been seriously considered since the late 1960s, but commercial production has not yet started. Five fundamental aspects remain in need of alignment and management.
Fist, the resource base: Deep-seabed mineral discoveries are classified as seafloor massive sulphides, polymetallic nodules and cobalt-rich crusts. Each type of deposit is radically different in terms of location, water depth, distribution and, most importantly, quality. A large mineral resource that can be feasibly mined with an estimated long mine life is needed to support capital investment. Today, many explorers for seafloor massive sulphides and cobalt-rich crusts have mineralized systems but have not yet publicly demonstrated a formal mineral resource to would-be investors.
Second, mining is sensitive to the macroeconomic environment. As mines usually contain up to decades of reserves, they can cut development costs deeply in a downturn, then replenish aggressively in a subsequent upturn. This “boom and bust” cycle is experienced by the mining industry typically every 8 to 12 years. Deep-sea mining for polymetallic nodules had a massive investment in the early 1970s, when commodity prices rapidly rose with the Western and Japanese economies, but interest waned by the late 1980s, due to lower commodities prices and pessimistic outlook. The recent commodity boom related to China’s industrialization has restimulated investment, but the more recent market correction has not. To get into production, aspirants need to skillfully manage their development schedule and funding requirements through the cycle.
Third, ongoing technological development allows us to work more easily at great depths subsea, but care needs to be taken in managing risk and unnecessary complexity, especially in the elaborate materials flow-sheets that typify a minerals mine. Each type of deep-sea deposit will likely need a different approach.
Fourth, both regulators and developers have environmental concerns that need to be addressed for commercial mining permits. So far, two main environmental impact assessments are known have been published for deep-sea mining. In 1981, NOAA published the “Draft Programmatic Environmental Impact Statement” for polymetallic nodules in the CCZ in the Pacific Ocean, and in 2008 Coffey Natural Systems published the “Environmental Impact Statement” for Nautilus’s Solwara 1 project in Papua New Guinea. A key challenge for developers and regulators is compiling, then expressing, large volumes of scientific data to stakeholders.
Fifth, there are domestic and international regulations to consider. Within territorial waters, regulators can apply dry land-based mining regulations to deep-sea mining. Recently, aid organizations helped fund the drafting of deep-sea mining regulations for developing countries. For international waters, drafting of the UN Convention on the Law of the Sea took from 1972 to 1982, with ratification not until 1994; a delay that helped stop several commercial development plans begun in the 1970s. Since 1994 however, the International Seabed Authority has made steady progress in implementing a modern mining code with environmental and exploration guidelines and regulations, and an anticipated set of exploitation regulations.
Deep-sea mining is a burgeoning industry with its own challenges and risks that are manageable, but it’s not an easy job. Progress has not always been steady, but our deepening understanding of the above factors is, without exception, encouraging.