- Deep-sea mining in international waters is a unique proposition, given that the seabed is considered a global commons, so any extraction should be justified for the benefit of all humankind.
- But given the likely environmental and social costs and the increasingly weak economic arguments for it, its proponents must address why there is a supposed urgency to begin commercial production.
- “The financial case for deep-sea mining is being dismantled one argument at a time. As a small number of actors attempt to rush toward seabed mining, it is only a matter of time until more financial institutions join the momentum against [it],” a new op-ed argues.
- This article is a commentary. The views expressed are those of the author, not necessarily of Mongabay.
Why do we need deep-sea mining? Given the potential consequences for the health and biodiversity of the ocean, that seems a vital question to answer before any commercial mining starts. The question is even more important as the economic case for deep-sea mining is being increasingly undermined by financial evidence, and is nowhere near strong enough to justify the risks to ecosystems we barely understand.
Deep-sea mining in international waters is a unique proposition given that the international seabed is not owned by any state. Instead, it is considered the ‘global commons,’ belonging to all of us, so that any extraction should be justified for the benefit of all humankind.
Given deep-sea mining companies also have financially-mandated deadlines, the arguments for it also have to address why there is a supposed urgency. This is especially true given that scientists stress the many unknowns, both about the deep-sea environment itself and the likely cumulative impact of the industry.
Over the years, those proposing deep-sea mining have come up with a number of reasons why such mining is necessary and urgent, beyond potential profit. The arguments have evolved to claim that minerals will primarily feed into the energy transition away from fossil fuels.
As covered by Mongabay, effective counter-arguments have questioned how necessary the specific minerals from deep-sea mining are for the energy transition, including whether ongoing changes in battery technology and demand will negate any estimated need. This point is emphasized in a recent report from Benchmark Mineral Intelligence, which concludes “shifting demand patterns … risk weakening the long-term outlooks for some key minerals such as cobalt. Taken together, these factors mean that deep-sea mining is currently not yet commercially viable at scale.”
More recently, deep-sea mining narratives have shifted toward national security and the control of ‘critical minerals’ supply chains, particularly as U.S. President Donald Trump has promoted mining in international waters, bypassing well-established international processes under the International Seabed Authority (ISA). These new narratives focus on opposing China, as well as reindustrializing the U.S.
Aside from issues over the legality of this move under international law, there are clear concerns when these minerals are supposed to be the common heritage of humankind actually supplying nationalism and militarization.
None of the above arguments effectively respond to the weakness of the economic case, but another narrative seeks to do that, arguing that developing states will be financially compensated by companies mining in international waters via benefit-sharing schemes. These proposals are being considered by the governing body of the area involved, the ISA, as part of a final set of regulations.
The first of three recent reports, focused on the financing of deep-sea mining, critiques the level of potential financial compensation. Written by two academics, Harvey Mpoto Bombaka and Ben Tippe, their report for Greenpeace concludes that based on current models, the projections of revenues are clearly insufficient to sustain or justify deep-sea mining. For instance, it is estimated that, even using industry’s optimistic predictions, that the average African country would receive less than $350,000 per year under proposed benefit-sharing schemes.
At the project level, the scrutiny is just as damning. The second of those reports conducted for my organization, the Deep Sea Mining Campaign (DSMC), by terrestrial mining expert Steve Emerman, analyzes the prefeasibility study produced last year by deep-sea mining firm The Metals Company (TMC). The report dissects the study in detail, questioning its level of independence and noting where it overestimates the potential benefits and underestimates the costs, including through claims over “zero waste.” It concludes that if TMC adheres to correct financial disclosure standards, the operation would fail to deliver any meaningful profit. The report lists 19 specific issues that need to be addressed, concluding that based on those issues, abandoning the project is the only responsible course of action.
The final of the three reports, conducted for Seas at Risk and DSMC, “Red Lines in the Abyss,” seeks to quantify growing concern among financiers over this controversial issue. It finds that 82 financial institutions, including banks, insurers, asset managers and public financial institutions, have adopted policies excluding, restricting or expressing concern about deep-sea mining.
Of these, 39 institutions have explicit policies that exclude, or place conditions on, financing such activities. These institutions represent approximately $27.5 trillion in combined assets under management, which equates with other industries that are restricted on ethical lines, such as tobacco and fossil fuels. Most importantly, nearly half of the exclusion policies have been adopted within the year of publication, indicating a rapidly growing momentum in the financial sector.
It is not surprising that an increasing number of financiers are responding to the risks around deep-sea mining, given there are so many unknowns, primarily around the environmental and social costs, but also financial risks. During a recent webinar hosted by DSMC, Storebrand Asset Management’s head of climate and environment, Emine Isciel, noted “If you’re serious about managing risk, this is not only about environmental risk, it’s financial risk for your portfolios and ultimately a systemic risk.”
The financial case for deep-sea mining is being dismantled one argument at a time. As a small number of actors attempt to rush toward seabed mining, it is only a matter of time until more financial institutions join the momentum against deep-sea mining. Proceeding with deep-sea mining while the economic case for it is being exposed as false isn’t just environmentally risky, it’s like doubling down on an already failing bet.
Andy Whitmore is the finance advocacy officer at the Deep Sea Mining Campaign (DSMC).
Banner image: The glass octopus is a nearly transparent deep sea species whose only visible features are its optic nerve, eyes and digestive tract. Image by Schmidt Ocean Institute (CC BY-NC-SA 4.0).
See related coverage:
US prepares to auction leases for seabed mining blocks in federal waters
Deep-sea wildernesses are more important than the promise of seafloor mining (analysis)
