The Metals Company puts out controversial timeline for deep sea mining

on Aug5
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Gerard Barron, chairman and CEO of The Metals Company, hopes that his company will be able to mine the seafloor for nickel, cobalt, manganese in the Pacific Ocean.

Carolyn Cole | Los Angeles Times | Getty Images

The debate over whether companies should be permitted to collect metal nodules off the floor of the deep sea has been grinding slowly for years, with both sides deeply entrenched in their positions.

The debate got more intense this week when The Metals Company, a company looking to mine those nodules, on Tuesday stated an aggressive timeline for moving forward. The Metals Company was founded in 2011 and raised $400 million from a combination of strategic partners such as Allseas and Glencore, financial institutions, venture funds and family offices. It then went public in 2021 through a special purpose acquisition company, or SPAC, and is looking to establish deep sea mining as a business.

Opponents say the ocean floor contains sea life that does not exist elsewhere and should not be disturbed. Supporters counter that the metal nodules contain commodities needed for the transition to clean energy, and that collecting them is better than mining them on land in biodiverse territory or employing inhumane labor practices.

On Tuesday, The Metals Company said it intends to submit an application to mine the deep seafloor after the July 2024 meeting of the International Seabed Authority, an intergovernmental organization that issues rules governing 54% of the world’s oceans.

The company went further to say that it expects a one-year review process, leading to production in the fourth quarter of 2025.

Right now, however, there are no established regulations or environmental standards in place. The Metals Company says it’s leaving ample time for those rules to be finalized, but opponents say the company is bolting ahead of the collective efforts to come to a consensus about regulating the deep seas.

In one indication of the intensity of the debate, there were dueling interpretations of the relative progress made at the most recent ISA delegate meetings in July. The ISA press office sent out a statement saying it had made “significant” progress on mining regulations, and that they were expected to be completed at the authority’s next sessions in 2024. It then corrected that projection to the following year.

At the time the Metals Company said it “applauded” the ISA’s “consensus decision agreeing a roadmap towards adopting final rules, regulations, and procedures” to allow deep sea mining in international waters.

But Diva Amon, a deep sea marine biologist opposed to mining, disputed the characterization of the progress that was made.

Gerard Barron, chairman and CEO of The Metals Company, holds a nodule brought up from the seafloor, which he plans for his company to mine the seafloor for these nodules in the Clarion Clipperton Zone of the Pacific Ocean. The Maersk Launcher research ship recently returned to San Diego after conducting core sample from deep along the ocean floor in the Clarion Clipperton Zone.

Carolyn Cole | Los Angeles Times | Getty Images

“While there was progress on the deep sea mining code, I certainly wouldn’t say it was ‘significant’ as listed in the ISA’s press release,” Amon told CNBC. “I gather many states and observers were quite angry at the inaccurate reporting” as reflected in the corrected press release.

Activists at Greenpeace were even harsher in their assessment.

“This week, the ISA has been dominated by discussions of how to start deep sea mining thanks to a handful of delegations — namely Norway, Mexico, the United Kingdom and the desperate efforts of The Metals Company. That’s totally the wrong focus in a climate and nature emergency,” Louisa Casson, the deep sea mining campaign lead at Greenpeace, said in a statement released on July 24.

“Voices against deep sea mining have never been so loud — from the fishing sector to financiers, indigenous peoples, scientists and big business.”

Why the debate is so deeply polarized

Dump trucks seen at the nickel mine, operated by PT Vale Indonesia in Sorowako. U.S. Geological Survey shows that Indonesian nickel reserves ranked No. 1 in the world, reaching 21 million tons or equivalent to 22% of global reserves.

Sopa Images | Lightrocket | Getty Images

“The demand for land-based minerals outweighs supply by far, and even considering recycling, we will be in a deficit in cobalt and nickel as early as 2026 for cobalt and 2027 for nickel, according to the Benchmark Mineral’s risk-weighted supply forecast,” she said.

Benchmark’s analysis found that the deep sea mining model “resulted in a better environmental performance than analyzed traditional land processing routes in the majority of the impact categories,” Miller told CNBC. For example, the global warming potential of The Metal Company’s route is generally 54 to 70 percent lower than the conventional land-mining routes, Benchmark found.

But Miller also said the commissioned analysis by Benchmark does not analyze all environmental factors, such as biodiversity. In addition, the findings of the study do not mean that Benchmark is endorsing deep sea mining, she added.

Other environmental assessments call the value of the mining into question.

A report from the nonprofit Planet Tracker published in June found the cost of restoring the floor of the deep sea would be between $5.3 million to $5.7 million per square kilometer, which is about two times the cost of mining it, and more than the revenue that would be generated by selling the nodules, which Planet Tracker estimated to be $4.4 million per square kilometer.

Amon, the marine biologist, previously told CNBC that damage to the seafloor will be “irreversible” if mining does go forward. “This is a thriving ecosystem,” Amon said in March. “Sure, many of the animals are small in size, but that doesn’t make them any less important.”

But Gerard Barron, The Metals Company’s CEO, says the clock is ticking for climate action, and mining the deep seafloor is a less damaging alternative than either not getting access to the metals needed in the transition or continuing to extract them from land-based resources.

“We can’t be swayed by narrow views [of those] who just want to stop everything because that’s not going to lead us towards addressing global warming,” Barron told CNBC in a video conversation on Monday. Mining for metals in Indonesia causes deforestation and biodiversity loss and is displacing indigenous communities, Barron said. And mining for cobalt is infamously exploitative of child labor.

“That’s our reality. And we can change that,” Barron said. “Sometimes people say to me, ‘You’re not going to solve anything. You’re just adding another problem.’ But that’s not true. We can slow down the expansion of rainforest nickel.”

But this approach is unrealistic, Amon has previously told CNBC. Deep sea mining won’t replace land-based mining, but rather will simply add another source of minerals, she said in March.

A general view of artisanal miners working at the Shabara artisanal mine near Kolwezi on October 12, 2022. Some 20,000 people work at Shabara, in shifts of 5,000 at a time. Congo produced 72 percent of the worlds cobalt last year, according to Darton Commodities. And demand for the metal is exploding due to its use in the rechargeable batteries that power mobile phones and electric cars. But the countrys poorly regulated artisanal mines, which produce a small but not negligible percentage of its total output, have tarnished the image of Congolese cobalt.

Junior Kannah | Afp | Getty Images

What’s next?

The pilot nodule collector vehicle designed by Allseas for use by The Metals Company. Photo provided by The Metals Company.

Photo courtesy The Metals Company

“I would add that what the council did explicitly decide — thrice now since March — is that commercial exploitation should not commence in the absence of regulations,” Singh told CNBC.

Regardless, Singh says, there is a lot of work yet to be done by members of the council to establish regulations before any deep sea mining commences. 

“The message I would give to current and prospective investors of any deep sea mining company is that it’s still a long and winding road ahead with many uncertainties,” Singh told CNBC.

“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.”

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