Gerard Barron brandishes a small black rock — the size of the palm of his hand — and heralds it as the future: “It’s all right here, all the metals we need.”
The Australian entrepreneur believes these rocks, formed over millions of years at the bottom of the ocean, can help satisfy the growing demand for the metals used in batteries and clean energy technologies, and are therefore critical to the transition away from fossil fuels. Less than 20cm wide, the so-called nodules can contain nickel, manganese, copper and cobalt— all set to see a surge in demand over the next decade.
Mr Barron’s start-up, DeepGreen, which is backed by shipping group Maersk and Switzerland-based miner Glencore, plans to suck up thousands of tonnes of the nodules from the sea floor using harvesting vehicles, and send them up a pipe to a ship to be sorted. Mining in the deep sea (defined as below 200m) can avoid the problems of land mining, he says, such as deforestation, pollution and child labour, although critics say it produces a whole new raft of problems.
“There’s no point thinking you’re doing the planet a favour by driving an electric vehicle if those materials have been mined by the hands of children,” he says, “or you have had to deforest important rainforest assets.”
The US Geological Survey says the deep sea, which covers around half of the earth’s surface, contains more nickel, cobalt and possibly rare earth metals than all land-based reserves combined. Mining can be legal in a country’s coastal waters, but is not currently in international areas.
Rising demand for niche metals along with the increased difficulty of finding land-based deposits is prompting a quest to exploit the potentially rich resources on the sea floor. That could finally become a reality by the end of the decade under rules being formulated by the International Seabed Authority, a UN body founded in 1982 and made up of 168 countries that administers licences for deep sea mining.
Any move by the ISA to loosen the restrictions will trigger a contest to mine the deep sea. Companies ranging from China’s state-owned miner Minmetals to US defence contractor Lockheed Martin are positioning to exploit thousands of square kilometres of ocean. A host of smaller start-ups such as DeepGreen are following behind.
The miners argue that deep sea mining could help diversify supply — especially in the case of cobalt, a key metal for electric car batteries that is almost entirely reliant on the Democratic Republic of Congo, where child labour is common. The USGS expects deep sea mining of critical metals to reach around 5 per cent of global supply by 2030, and 15 per cent by 2050.
“We need the metals. Or we will have to stop doing practically everything we do — we have to stop the green technology, we have to stop having cell phones, electric cars,” says James Hein, a senior USGS scientist. “We have an opportunity right now to do something. Let’s be sure that when it is done, and it will be, that it’s done in an absolutely environmentally sound way as possible.”
But scientists and non-government groups warn that mining the seabed could set off an arms race that will not just disturb the habitat for marine life for decades but potentially destroy the deep oceans irreversibly. They suggest that smartphones and other electronic waste should be recycled rather than thrown away, and shared forms of transport such as ride sharing should be used more. Last year Apple pledged to make its iPhones and other devices entirely from recycled materials, a step towards a “closed-loop” model that could reduce soaring demand for natural resources.
“Millions and millions of phones just get discarded without ever reaching a recycling system, so I wonder if it’s necessary to keep searching for mining in the seas,” says Ann Dom, deputy director of Seas at Risk, a Brussels-based NGO. “There’s not one study that shows that deep sea [mining] will close down mines in the Congo — it won’t happen.”
The potential bounty at the bottom of the sea was first realised as early as 1873 when HMS Challenger, a British ship, hauled up “several peculiar black oval bodies which were composed of almost pure manganese oxide” while on a voyage to explore the Canary Islands in the North Atlantic. At the time manganese was used to bleach cotton for use in textiles, one of England’s largest industries.
“Though the bottom of the sea at present could never be made a paying source of supply,” the occurrence of manganese there “may turn out to be an important fact in geology,” the ship’s chemist wrote prophetically.
Yet because demand was easily met by land-based resources it took almost 100 years before the minerals started to receive serious attention. By the 1970s, several consortiums, including major mining companies such as Inco and Lockheed Martin, explored for mining sites in the Clarion-Clipperton Zone in the eastern Pacific, a 4.5m sq km area of the sea that is half as wide as the US mainland. The Lockheed-led consortium successfully tested mining for manganese using a seabed vehicle connected to a ship via a 5,000m steel pipe. But a lack of international regulations hampered these early efforts.
While mining in shallower waters for minerals has taken place since then and De Beers regularly uses special ships to suck up diamonds from the ocean floor off the coast of Namibia, no one has successfully started a commercial venture to mine the deep sea.
Mining the seabed is focused on three distinct terrains that each have different resources and characteristics: fields of polymetallic nodules that lie up to 6,000m down on the sea floor; so-called massive sulphides, which are deposits that form along ridges or near hydrothermal vents — outlets where hot water escapes from hot volcanic rocks; and cobalt-rich crusts, which lie on the flanks of old volcanoes.
“It’s still at an experimental stage,” says Andy Whitmore, of the Deep Sea Mining Campaign, a group that campaigns against deep sea activity. “Betting on small mining companies is often a bit of a punt but in this case it really is a full-on punt.”
Vancouver-based Nautilus Minerals is scheduled to begin mining extinct hydrothermal vents in Papua New Guinea’s coastal waters in 2019 for copper, gold zinc and silver. Nautilus says the Solwara I project will be able to produce copper at 80 cents a pound, which would make it competitive with some of the largest land-based copper sites. Chile’s Escondida mine has a cash cost of $1 a pound of copper.
But Nautilus has been beset by delays which have left its newly-built vessel languishing in a Chinese boatyard, following the inability of its contractor to pay the shipmaker.
In May, miner Anglo American sold its 4 per cent stake in the company and three months later Nautilus’ chief executive left. The company’s share price has slumped 94 per cent over the past seven years, valuing it at over $41m. In June it got a $34m loan from its biggest shareholders: Metalloinvest, Uzbek-Russian billionaire Alisher Usmanov’s metals group, and Omani conglomerate MB Holding Co. Nautilus says it still needs to raise $350m to start mining.
Environmental campaigners have slammed Nautilus’ project, which is proposing to use three robotic machines weighing up to 310 tonnes to cut and collect the material from the ocean floor. This year communities in Papua New Guinea also launched legal action to try to stop the project.
Rather than a bold new venture, Nautilus’ project echoes the problems of land-based mines. “They’ve hit so many problems, legal problems, problems with the social licence to operate — the local people are up in arms about the whole thing,” Mr Whitmore says.
Despite Nautilus’ experience, others are forging ahead with plans to mine the sea floor. Last summer, Japan mined a hydrothermal vent at a depth of about 1,600m off the coast of Okinawa, sucking minerals up to the surface.
Over the past decade, ISA has given out 15-year exploration contracts to 29 countries or companies, covering more than 1.4m square kilometres. Since the US has not ratified the Law of the Sea, Lockheed Martin operates in a partnership with the UK’s business, energy and industrial strategy department, and has two licences to explore 133,000 sq km in the Clarion Clipperton Zone. It expects to mine around 9,000 sq km of that area.
“Security of supply is something that’s of interest to the UK government for clean energy applications such as electric vehicles,” says Chris Williams, managing director of UK Seabed Resources, Lockheed’s deep sea mining subsidiary. “The risk of supply has registered [with governments].”
Unlike the deposits targeted by Nautilus, nodules can be harvested from the sea floor. Lockheed says it is deploying new technologies used in the offshore oil industry such as autonomous underwater vehicles.
“Pure economics tells you that deep sea mining should be viable,” Mr Williams says, though he declined to reveal the costs of the company’s planned deep sea mining efforts.
The economics of deep sea mining will depend on how ISA finalises the regulations and how the mining revenue is shared. But in a presentation earlier this year to ISA Richard Roth, director of the materials systems laboratory at MIT, estimated that deep sea mining for nodules could be in the lower third of the cost curve of current nickel and copper mined production — meaning it would be profitable at current prices. The operations could cost around $3.2bn to build with operating costs of around $800m a year, his calculations suggest.
That is likely to depend on the market. Prices for metals such as cobalt and nickel can be highly volatile and higher prices can quickly lead to additional supply from land-based mines. Rising prices for cobalt over the past two years due to growing demand for electric cars have already led to increased land-based production, with the cobalt market now set to be in a surplus over the next few years, according to consultancy CRU.
Companies could also face additional monitoring and environmental compliance costs under the ISA exploitation rules, which are due to be finalised by 2020.
“It really comes down to cost. If you can mine cheaper from the deep sea than you can mine on land, apart from considerations like security of supply, then it will be done,” says David Cronan, professor of marine geochemistry at Imperial College in London. “Deep sea mining will never put land mining out of business but I think the two will develop in tandem.”
Many scientists and NGOs remain concerned that the drive for deep sea mining is going too fast and will begin without a proper evaluation of its environmental impact. In July, more than 50 NGOs wrote to the ISA, saying they were “deeply concerned about the potentially irreversible losses of marine biodiversity” from deep sea mining.
“They’re trying to speed up the development of these rules as certain countries and companies are getting impatient,” says Ms Dom from Seas at Risk. The body also lacks sufficient environmental expertise and has not been entirely transparent about how it makes decisions, she says.
Mining for deep sea nodules requires a large surface area, at almost 80 sq km per million tonnes of ore mined, compared with 0.52 sq km on land, according to Seascape Consultants, an environmental consultancy. It will churn up plumes of sediment and cause sound, light and chemical pollution that could impact local ecosystems.
“Every sample we take tends to come up with some new species in it,” says Phil Weaver, the founder of Seascape.
Evidence shows that areas in the deep sea that were first explored in the 1970s have been slow to recover. Disturbance from experimental mining of nodules conducted in 1978 in the French area of the Clarion-Clipperton Zone at a depth of 5,000m is still visible, for example, with a lower density of tiny worms called nematodes at the site.
“Do you gamble with those uncertainties in favour of the mining operations or do you give the benefit of any doubt to the protection of marine ecosystems?” asks David Santillo, a Greenpeace scientist at the University of Exeter. “To me the latter is more important.”
Project Azorian Mining plan was cover for submarine rescue
While deep sea mining may soon become a reality, it actually began as fiction.
In 1974 the CIA carried out a plot to recover a sunken Soviet nuclear submarine under the guise of a fully planned deep sea mining expedition.
At the height of the cold war, IN 1968, the K-129 Soviet diesel-powered sub had sunk in the deep waters of the Pacific, losing all of its crew. While the Soviet Union failed to find the sub, the US managed to narrow down its location.
Former CIA director William Colby came up with a plan, which was code-named Project Azorian, that would give the Americans key insight into Soviet nuclear technology by lifting the 1,750 tonne sub from the seabed north-west of Hawaii.
The plan took years to implement and involved respected researchers who went on to play a role in deep sea mining. The ship, the Glomar Explorer, was built with money from US billionaire Howard Hughes and used equipment developed by Lockheed Martin.
On August 8 the submarine was lifted from the seabed with the help of an underwater vehicle fitted with a large claw. But on its way up, it snapped in two. Instead the bodies of Soviet sailors as well as nuclear torpedoes were recovered.
The expedition, however, helped inspire the first era of exploration of the seabed for minerals.
In 1975 Lockheed leased the ship and started to explore the deep sea as part of Ocean Minerals Co, alongside Amoco, Shell Billiton and Boskalis.
Copyright The Financial Times Limited 2018
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