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About Commodity Insights
03 Jul 2023 | 16:58 UTC
By Euan Sadden
Highlights
Companies able to apply for deep-sea mining permits from July 9
Unclear how ISA will process and review applications
ISA member states remain divided on how to proceed
The International Seabed Authority (ISA), the UN-backed organization tasked with regulating ocean floor exploration and mining activities in international waters, is poised to receive applications for commercial deep-sea mining permits when the two-year period stipulated for the adoption of a deep-sea mining code expires on July 9.
If no regulations are agreed before the deadline, private companies will be able to apply for permits to mine parts of "the international seabed area", the seabed and ocean floor beyond the limits of national jurisdiction.
But despite the pending deadline, it remains unclear exactly how the ISA will review these applications and whether approval could be delayed once received.
Deep-sea mining has been the subject of intense debate in recent years due to the discovery of huge undersea mineral resources containing battery metals, such as copper, cobalt and nickel, which are in high demand in line with the global energy transition and surging battery production.
Most of the commercial interest in deep-sea mining has focused on polymetallic nodules, found on the surface of the ocean floor at depths of around 4,000-6,000 meters. These potato-sized mineral concentrations contain a combination of metals including cobalt, copper, nickel and manganese, with estimated undersea reserves dwarfing those found on land.
However, environmental groups and academic institutions warn that the areas earmarked for exploitation contain fragile ecosystems that will be irreparably harmed by undersea mining, resulting in a permanent loss of biodiversity.
The 36 member ISA council has been negotiating adoption of a mining code that would allow commercial-scale extraction of deep-sea minerals since 2012.
After circulating several draft iterations of the mining code, the final regulations were due to be completed by the end of 2020 but were delayed by the COVID-19 pandemic.
In June 2021, the South Pacific Island nation of Nauru and its sponsored entity Nauru Ocean Resources (NORI) triggered a legal clause notifying the ISA of plans to begin mining the ocean floor in its 74,830 km2 exploration area of the Clarion-Clipperton Fracture Zone (CCZ), a mineral rich area of sea floor spanning 4.5 million km2 across the northeastern equatorial Pacific Ocean.
NORI is a wholly owned subsidiary of The Metals Company (TMC), a Canada-registered corporation that has expressed its intent to apply for an exploitation license later this year and begin extracting polymetallic nodules from the sea floor in the Pacific Ocean in 2024. It initially plans to focus on its first project, NORI-D, which accounts around 22% of the total resource across its two CCZ exploration areas.
The provision -- known as the "two-year rule" -- obligates the ISA to allow mining to proceed within two years whether or not decision-makers have agreed upon a final set of mining regulations.
Without a final version to specify the rules and procedures for prospecting, exploring and exploiting marine minerals from the seabed within this timeframe the ISA council may be required to consider and provisionally approve applications for exploitation permits.
However, it remains unclear what will transpire when the deadline expires on July 9, 2023.
On June 8, the European Academies' Science Advisory Council, a regional association of National Academies of science, announced its support for a moratorium on deep-sea mining, saying it would cause irreparable harm to marine ecosystems.
In its report, "Deep-Sea Mining: Assessing evidence on future needs and environmental impacts", the EASAC challenged the claim that deep-sea mining is needed to secure the critical minerals to support the global energy transition. Although individual scientists have previously called for a moratorium, this is the first such call by a major scientific panel.
"Deep-sea mining would not provide many of the critical materials needed for the green transition and other high-tech sectors," EASAC Environment Director Michael Norton said. "In addition, recycling rates can be vastly improved, and future technological innovation has not been adequately considered in forecasts."
Another key problem is that member states within the ISA remain divided on the issue of deep-sea mining and the process for receiving applications.
ISA Council members calling for a pause or moratorium on mining the ocean floor include Palau, Fiji, Samoa, Micronesia, New Zealand, Costa Rica, Spain, Germany, Finland, Panama and Chile. In November 2022, at the UN's COP27 climate change conference in Egypt, French President Emanuel Macron called for a total ban on deep-sea mining.
At the meeting of the ISA Council in March 2023, Brazil, the Netherlands, Portugal, Singapore, Ecuador, Italy and Switzerland indicated they would not approve mining contracts until enough environmental protections are in place.
Portugal stressed that "the effects of deep-sea mining on biodiversity must be sufficiently researched, risks must be understood and technology must show that the environment would not be significantly harmed in line with the precautionary principle."
On June 26, Switzerland said its representatives to the ISA Council and Assembly will argue that a moratorium on deep-sea mining should be applied until the potential adverse effects are better understood and the protection of the marine environment can be guaranteed.
Chile, elected to the council for a six-year term from 2021 to 2026, has proposed a pause of 15 years, while two other council members -- Britain and Norway -- have argued that adoption of a mining code by July 2023 remains feasible.
Away from the ISA, the Norwegian government recently announced plans to open up an area of its continental shelf for commercial deep-sea mining, leaving no doubt about its position on the practice.
With deep-sea miners preparing to submit permit applications and the ISA still undecided on how these applications will be reviewed and decided upon, a meeting of the ISA Assembly in Kingston, beginning on July 10, will represent a pivotal moment in determining the future of deep-sea mining as well as the outlook for the supply of critical minerals and the global energy transition.