Pacific mining slowed as international agency finalizes rules
The start of industrial-scale seabed mining to extract metals from car batteries from the bottom of the Pacific Ocean has been delayed after the international agency charged with overseeing the work concluded late last week that it needed more time to finalize mining regulations.
The action of the International Seabed Authoritywhich in July set a goal of finalizing rules on seabed mining came after pressure from environmentalists and countries opposed to the effort.
The decision will have the most immediate impact the metal company, a Canadian-based mining start-up partnering with the tiny island of Nauru to pursue the first permit to begin industrial-scale mining, perhaps as early as next year — a timeline that will now be delayed.
It is not known how long the delay will last. It is being maneuvered by both opponents of seabed mining, who want to stop mining completely, and supporters, who want to figure out how to get it going around 2025.
The attempt to delay the start was spearheaded by countries such as Costa Rica, Chile and France. The three countries have urged other countries on the Board of Directors of the Seabed Authority to agree that no licenses should be granted for mining in international waters until regulation is finalized. This is now likely to take place in 2025 at the earliest, the body agreed.
“We’re on the side of the ocean,” said Gina Guillén Grillo, Costa Rica’s representative to the Seabed Authority, who has helped lead the opposition to seabed mining. “We know there isn’t enough science. Starting now would be a disaster.”
Gerard Barron, the CEO of the Metals Company, said he remained optimistic that his company and its partner, Nauru, would get the approval they needed to launch the effort within the next few years.
As the Seabed Authority continues its work to set environmental standards, among other things, as well as a royalty rate that will be paid by the mining contractors, the Metals Company will continue to lobby other countries, Mr Barron said. The company will strive to convince them that mining on the ocean floor is better for the environment than surface mining in places like Indonesia or Congo, where battery metals such as nickel, cobalt and copper are now produced.
“Hopefully we can keep the schedule on track,” said Mr Barron.
The Metals Company and Nauru, along with the delegation from China, which is also aggressively pursuing seabed mining, unsuccessfully pressed the Seabed Authority at last week’s meeting to set a goal of finalizing regulation by 2024.
Mr Barron said that the Metals Company’s investors – including Allseas Groupa Swiss-based company that specializes in offshore oil pipelines and is looking for a way to transition into work that can support the electric vehicle industry, remained committed to the project.
As it stands, the Seabed Authority, which is based in Jamaica 31 exploratory work contracts issued in the Pacific, Indian and Atlantic Oceans. These agreements allow sponsor countries and their contractors to collect small amounts of seafloor rock or cobalt-rich crusts while collecting data on the environmental impact of the process, such as the risk sediment plumes may pose to other aquatic life when the rocks are lifted.
The area of most intense focus is the Clarion Clipperton Zone, a remote stretch between Mexico and Hawaii where seabed rocks contain the highest concentration of metals. The rocks sit 2.5 miles down, so deep that remote controlled machines are required to lift them to collection ships.
This is the region where the Metals Company wants to start its mining activities, it convinced generate $30 billion in after-tax net cash flow over the 25-year life of the original project. If successful, this small company that has never turned a profit would become one of the largest global suppliers of key metals needed for electric vehicle batteries.
One of the biggest questions now is when Nauru will apply to begin mining on an industrial scale. It can do this before the regulations are final, knowing that it will likely take at least a year for the application to be reviewed and then dealt with by the Seabed Authority.
If Nauru and the Metals Company have to wait for regulations to be finalized, seabed mining would not begin until 2026 amid continued opposition.
Environmentalists who are working with countries like Costa Rica and France to challenge seafloor mining have said the delay would give them more time to enlist additional countries that want to see a prolonged pause or even a moratorium on the practice. Nearly two dozen countries have now approved some form of withholding, up from just a handful a year ago.