Deep sea mining is the process of collecting minerals from the seabed deposits on the ocean bed, most commonly at a depth over 200m [1]. There are large deposits of rare earth metals on the seabed including copper, silver, gold, zinc, manganese, and cobalt [2]. As demand for these metals increases, more people are looking to the seabed floor to mitigate the increasingly high demand for these metals. A large issue with deep sea mining is that the environmental consequences are not known [3]. The impacts of deep-sea mining are understudied, with there being large gaps in our understanding and knowledge of its effects on the biodiversity and life of the seafloor [1].
The International Seabed Authority (ISA) is an autonomous international organization established by the UN. The ISA was established under the 1982 United Nations Convention on the Law of the Sea (UNCLOS). The organization consists of 169 members, including 168 member states. The ISA was established to “organize and control all mineral-resources-related activities in the Area for the benefit of humankind as a whole”. The ISA is ruled by the Secretary-General. The current Secretary General is Michael W. Lodge. A large role of the ISA is to approve exploration contracts for deep sea mining companies. Starting in 2010, the ISA began approving contracts for private companies to mine for polymetallic nodules, polymetallic sulphides, and cobalt-rich ferromanganese crusts. Currently, the ISA has 22 active contracts with mining companies [4].
Seabed mineral deposits
Since 2010, deep sea mining has seen a lot of attention. The latest reason being the sheer quantity and quality of deep sea ore deposits. In terms of quantity, 35-45% of the demand for rare earth and critical mining could be supplied by deep sea mining [5]. Another driver is the unparalleled purity of the deep sea ore deposits. On average, ore deposits mined on land have sub 1% metal purity. Due to the conditions of deep sea environments, ore deposits on the seabed are typically around 99% purity, making them an incredibly economically viable solution [6].
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Another benefit of deep-sea mining is that unlike ore deposits on land, deep sea ore deposits aren’t concentrated in individual spots. While most cobalt on land is mined in Africa, on the sea floor it can be mined in all oceans.
In July the ISA along with its 168 member countries will congregate to vote on the Secretary-General. This vote will be the most important event of the metals and mining sector for decades to come.
Within the ISA there are two schools of thought: Pro Deep-sea mining, and Anti-Deep-sea mining. The two individuals running for the Secretary-General of the ISA are Michael Lodge and Leticia Carvalho. Michael Lodge, the current secretary-general of the ISA, is running on a pro-mining, business-friendly platform that plans to further expand the infrastructure that allows companies to access deep sea mining certifications. Leticia Carvalho is running for the secretary-general on a green-friendly, pro-environmental standpoint, who believes there should be a better understanding of the effects of deep sea mining before it is done on a global scale [7]. Lodge’s election would lead to a large expansion and increase in the allocation of contracts for deep sea mining, while Carvalho’s would lead to an immediate decrease or halt of all deep sea mining operations.
The term will last for four years; however, considering the current exponential growth of deep sea mining, regardless of which candidate is elected, the 4-year term will have massive impacts that will still affect the industry decades down the line. Either the industry will expand so rapidly that it will be as if Pandora’s box was opened, or the industry will be halted and suffer due to the lack of permits and investments.
Michael W. Lodge
Policies and Stance:
Continuity and Business-Focused Approach: Lodge has been known for his business-friendly stance, emphasizing regulatory frameworks that support the interests of deep-sea mining contractors.
Criticism:
He has faced criticism for being perceived as too close to mining companies and for not giving enough consideration to environmental concerns.
Leticia Carvalho
Policies and Stance:
Environmental Focus: If elected, Carvalho is expected to push for a more environmentally conscious regulatory framework, addressing the ecological risks associated with deep-sea mining.
Sustainability and Conservation: Her approach is likely to include stricter environmental regulations to protect marine ecosystems from the potential negative impacts of mining activities.
These are two incredibly important outcomes to understand as, as it stands, the outcomes of the vote in uncertain with no clear likely winner [8].
Possible Outcome: Leticia Carvalho Wins
In the scenario that Leticia Carvalho wins, there is far less disruption within the metals and mining industry. As the economy is currently not dependent on deep sea mining, the outcome of the election is unlikely to affect the prices within the metals and mining sector. Deep sea mining exploration and projects will be phased out or halted, and any investment or stock prices of these companies will be decimated.
In summary, this outcome will lead to more of the same.
Possible Outcome: Michael Lodge Wins
In the scenario that Michael Lodge wins, there will be large disruption within the metals and mining industry in the years to come. As the economy is currently in a shortage of rare earth metals, the outcome of the election will lead to an increase in dependence on deep sea mining for rare earth metals. Deep sea mining exploration and projects will see an exponential increase in investments and exploration from both private companies and governments.
In summary, this outcome will lead to the ‘Pandora’s box’ of deep-sea mining being opened. The unknown environmental outcomes will become known, there will be great hope for rare earth metals as they are needed for green tech, and there will be no going back to a time before deep sea mining.
One of the largest disruptions caused by an increase in deep sea mining will be the massive geopolitical consequences that it has.
In recent years, the Chinese government has heavily invested in deep sea mining technology, to the point where China is the most advanced nation in the deep sea mining industry. Aside from investment, another driver of innovation within the sector is the lax regulation of the deep sea mining industry by the Chinese government.
China both currently and historically holds more deep sea mining contracts than any other country [2]. This threatens the world of trade and foreign policy as not only could China potentially hold a monopoly on the mining of rare earth minerals via deep sea mining, they also have export controls on critical metals that deep sea mining would yield [9].
The largest disruption posed by deep sea mining is its effect on the prices and valuations in the metals and mining industry. As deep sea deposits hold great quantities of high-grade rare earth metals, an increase in mining would lead to a very large increase in the supply of metals. While there are large quantities, the purity of the metals will make deep sea mining far more economically viable compared to on-land mining. As supply begins to exceed demand, metals will see a significant reduction in value. Furthermore, deep sea mining will put pressure on the valuation of land-based operations, especially for operations that extract metals abundant on the sea floor.
If deep sea mining rates increase, there should be an increase in volatility within the metals and mining sector, along with downward pressure on prices, except within the deep sea mining sector, which will undoubtedly trade higher.
Regardless of the outcome of the ISA vote, there are two incredibly polar consequences. On one hand, the shortage of rare earth metals needed for green technology will worsen, and a potential solution to the shortage will all but cease to exist. On the other hand, there will be a flood of cheap metals over the coming years, and the geopolitical power and bargaining powers of nations will greatly increase. No matter what happens, the July ISA Secretary-General vote will greatly affect the mining and metals industry, and beyond.
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