Metal Tech News - August 23, 2023
Loose legislation and tight deadlines have created a deep-sea mining rift that divides governments, electronics giants, vehicle manufacturers, banks, and scientists across unexpected lines.
The mining industry has found itself rapidly transforming into a vital participant in worldwide efforts to reverse climate change due to the new minerals wish list for electric vehicles, wind turbines, solar panels, and the rechargeable batteries that cut across the clean energy landscape.
Even as greener technologies are being employed as quickly as possible, the energy transition goals accelerated by government funding and ambitious new company pledges have created a materials scarcity that has to do more with how sustainable a resource is, as much as how much is available.
The mining industry is up against intense socioeconomic pressures and an unforgiving clock. The looming worldwide deadline outlined by scientists regarding global temperature increase casts doubt on whether we can access what we need quickly and cheaply enough.
Meanwhile, international interest in our largest untapped resources below the oceans that cover more than 70% of Earth's crust can no longer be tabled.
With the advent of the internet and social media, end users have established themselves as powerful voices for change. Driving government and corporate policy is a more informed, involved and socially active populace and a large enough body of scientific and environmental indicators to take seriously.
The deep sea outside national jurisdictions has been the longstanding subject of a tug-of-war between commercial interests and environmental protections since the 1970s.
With rocketing demand for clean energy metals, mining companies have again turned their attentions to the ocean – partly to sidestep the protracted timelines and constraints of mining laws on land, contradictory actions between departments within the current U.S. administration, and the costs and relative infancy of net-zero research and tech development.
Nickel, cobalt, and manganese deposits are found primarily in Indonesia, the Congo, and South Africa –countries with a lack of protections for the environment and human rights. Importing materials from these countries threatens to disqualify auto and battery manufacturers in the U.S. looking to take advantage of EV bonuses and subsidies such as those proposed by the Biden administration.
To close this gap, industry leaders and governments alike are scouring the planet seeking alternative resources, from constructing "urban mining" battery materials recycling complexes to expanding and converting existing mines to renewable energy production and extending the life of existing mines, and now prospecting ocean resources.
In 1994, the UN Convention on the Law of the Sea (UNCLOS) took effect upon passage of key amendments designed to spur commercial mining.
Member states also established the autonomous International Seabed Authority (ISA) tasked with establishing and regulating industrialization of the seabed beyond national jurisdictions and to "protect the marine environment from harmful effects" arising from those activities.
Also known as the Law of the Sea treaty, UNCLOS is the only international constitutional document governing mineral exploitation on the underwater commons, roughly 60% of the world's surface. The ISA has been developing that body of regulations – coined the Mining Code – ever since.
The most studied seabed of interest under the ISA's control is the Clarion-Clipperton Zone (CCZ), an abyssal plain in the Pacific between Mexico and Hawaii that is over 1.7 million square miles across, roughly half the size of Canada, and potentially containing more nickel, manganese and cobalt than all the combined deposits discovered on land to date.
"Polymetallic nodules" (better known as manganese nodules) are essentially concentric layers of iron and manganese, additionally formed with various amounts of nickel, copper and cobalt around a small core of ocean detritus. The combination is tailor-made for battery chemistry needs.
The nodules are formed by the slow accretion of minerals from seawater. Polymetallic nodules occur with the greatest abundance on vast, undisturbed seafloors and are estimated to have an incredibly slow growth rate of less than four millimeters per million years.
Deposits have been identified in the north-central Pacific Ocean, the Peruvian basin in the southeast Pacific, and the Indian Ocean – the most promising being between the Hawaii Islands and Central America in the equatorial Pacific Ocean.
Until regulations are agreed upon, full-scale mining is prohibited. But the rights to explore specific areas and reserve them for commercial exploitation are already being granted (over 30 contracts so far) by the ISA. These permits require companies to collect data for environmental analysis while exploring the potential for future extraction.
The Metals Company (TMC) has been the most publicly visible figure in debates on the profitability and feasibility of extracting minerals from the seabed. The Canada-based startup's license is sponsored by the island country of Nauru.
A former oil-drilling vessel called the Hidden Gem was retrofitted by TMC for a test of its new system to dredge for polymetallic nodules. By the end of last October's trial run, the process had delivered more than 3,000 tons of the nodules, the first time since the 1970s that any company had successfully trialed a complete harvesting system.
"The nodules' composition happens to be remarkably well-aligned with the needs of electric vehicle makers," said Gerard Barron, outspoken CEO of TMC, "Carmakers will need a great deal more of these metals in order to make battery cathodes and electrical connectors for an electric vehicle fleet of around a billion cars and trucks by mid-century."
Representing 167 member nations today, the ISA's 50 or so employees work on a small annual appropriation of $10 million out of offices in Jamaica's capital Kingston. The agency has, at times, been in conflict with itself, as seen in documentation and interviews with employees calling out the secretary general's spending and alerting media to ethical red flags, including a revolving door of consultants and staff lawyers who have worked for companies with matters put before the agency.
ISA member states are eligible to apply for exploration contracts that govern data gathering, sampling, prospecting, testing, and reporting. The ISA's latest granted permits represent partnerships between companies and those governments to explore enormous swaths of the Pacific, Atlantic, and Indian Ocean seabeds.
The three choicest parcels in Barron's company have the potential yield of $31 billion in metals within an industry that could be worth trillions.
Under ISA rules, companies like TMC have 15 years to explore the areas of their claims. They must submit a baseline survey of the nodules and environment to the ISA's Legal and Technical Commission as part of their exploitation application. The content and focus of surveys, however, are still loosely left up to the want-to-be ocean mining companies, another regulatory aspect still under debate by the organization.
The only remaining issue holding mining concerns back is that the standing international law still blanketly forbids deep-sea mining. However, the ban has a loophole – a section of the treaty known as "Paragraph 15" states that if any ISA member country formally announces that it wants to start mining in international waters, the organization has two years to adopt full regulations.
Failing to make that deadline, the treaty says the ISA shall "consider and provisionally approve such plan of work," a statement whose common interpretation implies that mining must be allowed to go ahead, even in the absence of full regulations.
"Paragraph 15 was appallingly drafted," says Duncan Currie, a lawyer for the Deep Sea Conservation Coalition. "Several countries dispute the idea that it means they need to automatically approve a plan of work."
In the summer of 2021, the president of Nauru formally notified the ISA that TMC's subsidiary, Nauru Ocean Resources, planned to begin a mining trial. The ISA approved the application without fanfare, taking opponents by surprise as the first such authorization amidst years of unresolved debate.
Policy discussions have since acquired a sense of extreme urgency, and the ISA has subsequently scheduled meetings to accelerate the development of mining regulations, as it has yet to formulate complete policy on environmental, financial, reporting, and regulatory obligations for contractors and itself.
Barron has insisted that his company is committed to getting the science right and points out that it has funded 18 ISA-required research expeditions.
"The lack of full scientific knowledge should not be used as an excuse not to proceed when the known impacts of the alternative – land-based mining – are there for us all to see," he said.
However, TMC's own registration filing with the US Securities and Exchange Commission notes that "the return of the CCZ to its pre-impact state after removal of nodules from the mined areas is not likely to occur within any foreseeable timeframe, given that nodule formation is believed to be in millions of years."
Barron is personally adamant that getting metals from the seafloor is less damaging than getting them from land and finds the resistance frustrating.
"I want to save the oceans, but I also want to save the planet," he said.
As evidenced by weekly headlines on the subject, conservationists and a surprising number of top industry representatives aren't convinced those concepts are mutually exclusive.
As of this summer, the two-year deadline has come and gone.
The ISA's adoption of regulations has been further delayed until 2025. Still, now that the two-year rule's embargo date has passed, TMC could technically begin mining without finalized regulations, as long as there is no veto from ISA member nations indicating a need to wait for those guidelines.
Assuming TMC gets the go-ahead, the company is on track to start harvesting commercially by late 2024. The company's goal for its first year is 1.3 million tons, scaling up to 10 times that amount in the next decade.
"It's definitely not the case that the council is inviting applications; rather, I believe the message the council, and many member states, is trying to send is one seeking to strongly dissuade any applications under the two-year rule," says Pradeep Singh, an expert in ocean governance and a member of the International Union for Conservation of Nature delegation to the ISA.
"There is a very high chance of applications submitted before 2025 being rejected or being subject to extremely stringent and unfavorable conditions," Singh said. "States were quite clear in that they are not prepared to be rushed or cornered into allowing deep sea mining to start anytime soon, especially where the risks far outweigh any potential benefits at this point in time. Current and prospective investors should bear that in mind."
More than 700 marine science and policy experts from 44 countries have signed a petition calling for a halt to seabed mining until robust scientific evidence can back it up.
In 2022, a further 31 marine researchers published a paper that reviewed hundreds of studies on deep-sea mining. The authors also interviewed scientists, industry members, and policymakers, 90% of whom universally agreed the scientific community needed at least five more years to make evidence-based recommendations for industry regulations in order to reduce risks for the world's oceans already stressed by pollution, overfishing and climate change.
The European Parliament and countries including Germany, Chile, Spain, and several Pacific Island nations have also joined dozens of organizations in petitioning for a moratorium on deep-sea mining, including a halt on issuing further exploitation and exploration contracts.
Requisites of the moratorium include completion of rigorous and transparent impact assessments, implementation of the "precautionary principle" and "polluter pays principle," and policies supporting a transformation to a resource-efficient circular economy and responsible terrestrial mining practices have been implemented.
Corporations including Samsung SDI, Philips, BMW, Microsoft, Google, Volvo, and Volkswagen have pledged not to buy deep-sea metals until impacts are better understood.
Several financial institutions have also declared they won't loan to ocean-mining ventures.
For every concern there is a counterargument, to the point where scientists on both sides back up their assertions with the same line of reasoning – "too soon to tell" and "not enough data."
As the last frontier of the planet, much is still unknown about the deep ocean and its life. Gathering data hundreds of miles from the nearest body of land far beneath the water's surface is extraordinarily difficult and expensive.
One way or another, evidence has shown that the eyes of world leaders and industry moguls are open to cause and effect on a much grander scale than previous generations. The world has gotten smaller and more interconnected, making it much harder to justify short-sighted activities, and a growing percentage of global leaders have learned not to ignore environmental indicators, hoping they'll go away.
TMC concedes that mining anywhere will impact ecosystems, but the extent and types of impacts are worth considering.
"In sourcing the metals for the clean energy transition, there can be no free lunch and we must accept that difficult trade-offs must be made if we are to meet metal demand for the clean energy transition given the known constraints to expanding terrestrial supply," according to The Metals Company's FAQs webpage.
It may very well be that the best argument on this topic is to make the conflict irrelevant entirely.
Dredging the seafloor with giant vacuum pumps has been the mode of key players looking to harvest undersea minerals and is the common extraction technique at the center of most heated debates. This method may still risk runaway budgets and the disruption of unknown biodiversity. However, there are other extraction techniques being explored that produce less negative impact.
One promising design on the horizon is the Eureka prototype from Impossible Metals, an autonomously AI-driven robot roughly the size of a refrigerator, hovering just above the seafloor to carefully pluck up ideal nodules while minimally disturbing the surrounding biosphere.
This Pasadena, California-based company is the first to approach deep-sea mining from a more sustainable angle.
"We need to be able to ensure that the ecosystem on the seafloor remains intact," said Renee Grogan, the co-founder of Impossible Metals, who fully expects the less intrusive extraction fleet technology to be commercially deployable within five years.
Sporting 16 years of experience in the mining industry, Grogan has consulted for financial institutions, resources companies, intergovernmental agencies and more. As chief sustainability officer of her company, she maintains the belief that corporate transparency is paramount and that the mining industry must undergo a dramatic shift in the way it accesses and processes the energy transition's host of raw materials.
Whether the resource is man hours, clean water, or nickel, the finite nature of living on planet Earth isn't always intuitive for its human tenants.
"I think we've got plenty of options for how to supply the metals we need from land so I think we should really be focusing on making sure we do that right," said Professor Gavin Mudd from Melbourne's RMIT University, "I don't think we've really nailed how to monitor deep-sea mining, we don't understand how likely restoration success is going to be with deep-sea mining. They're still big, long-term questions that have not been answered sufficiently."
However, if they are perceived, and whether or not the results are full commercial production, Barron and his competitors' initial forays into deep-sea prospecting are being closely observed and will inevitably prove to be educational.
The next five years can potentially be used to develop the scientific understanding needed to formulate regulations to safely mine the seafloor as well as strengthen other options, namely greener practices of critical minerals extraction, processing, and recycling, to gain enough momentum to make seabed mining superfluous.
Alternative strategies are already being explored to reduce terrestrial mining's environmental footprint and minimize raw mineral demand.
Swift and comprehensive investment and support is needed for technologies that will negate these issues rather than compare payoffs. Legal assurances in the early days of the rush can keep from creating a bigger problem than the one the industry is trying to solve.
It's down to science, industrious startups, and conscientious lawmakers to develop holistic, scalable, and scientifically driven solutions, and couch them in the stakes of monetary risk and reward for governments and corporations.