Deep sea mining debate to ramp up in 2021

London — As the world gears up for the looming, and rapidly approaching, energy transition it is without doubt that of fundamental importance to the revolution are metals, and as a consequence mining of raw materials.

One of the key components of what some commentators call the "green revolution" will be the electrification of mobility. EVs are rapidly gaining market-share, albeit from a small base, but there is a feeling that consumers that can afford the higher price point will accept it and go tailpipe emissions free.

The race is heating up for key EV battery raw materials such as copper, lithium, cobalt and increasingly nickel.

"The funds community has been enthusiastic on copper given the macro tailwinds and the long-term bull narrative rooted in copper's increasing usage from electrification — tied to global decarbonisation and energy transition, Dutch bank ING said. "All of this won't happen overnight, but the message from all major economies, either through pledges or a scaling up of current targets, is clear and should offer support."

With increased raw material demand, comes increased mining demand.

It is no secret that more minerals will be needed to fuel a sustainable future. One idea is to remove elements from the sea bed and extract raw materials, with one argument that any carbon emissions will be absorbed by the water.

Emotive topic

The debate on the possibilities, and perceived consequences, of deep sea mining is ramping up and will be high on the agenda in 2021.

During an Responsible Mining Foundation webinar hosted Nov. 11, CEO Hélène de Villiers-Piaget said that until the full ramifications of deep-sea mining are understood a "moratorium" should be enacted.

John Howchin, secretary-general, council on ethics of the Swedish national pension funds, said he was "neutral" on deep-sea mining, noting that "it's coming whether we want it or not."

Earlier this year Daniele La Porta, senior mining specialist at the World Bank, said that the world doesn't yet know enough about the impacts of deep-sea mining.

She suggested that what is needed is "precaution, precaution, precaution" before jumping in with both feet.

One senior market source told S&P Global Platts that there is a lot of emotion around the subject, and that without healthy discussion things could sour before they have even got started.

Managing director and global head of ESG research and data at S&P Global Manjit Jus said: "As we've seen with the growing criticism around exploration and production activities of energy and mining companies in remote parts of the world, there's certainly growing concern from investors and other stakeholders...companies venturing into new methods of mining and extraction, especially in delicate ecosystems such as underwater, need to be prepared to show that the benefits outweigh the costs and potential risks, and that they can justify these practices to an increasingly aware investment community, not to mention the social resistance they are likely to face — impacting their reputation and social license to operate."

An outright ban on deep-sea mining would be more dangerous than carrying on with the research currently being conducted around its impacts, DeepGreen CEO Gerard Barron told S&P Global Platts.

The word ban alone can be dangerous, added the senior market source, who noted that there are various calls from a variety of different organizations looking to minimize the risk of the mining practice. They were quick to note that as the discussion evolves clearer definitions are needed to clarify meaning and avoid confusion.

Clarity of communication key

Barron said people need to delve more into the details, and really look at the research that is already out there on polymetallic nodules.

DeepGreen is aiming to collect polymetallic nodules [rocks] from the deep ocean floor and process them to create metals such as nickel and cobalt, essential for the electrification of mobility.

Barron noted the importance of differentiating between the three main types of deep-sea mineral deposits, which in addition to polymetallic nodules include sea floor massive sulphides and cobalt crusts. The latter two, said the CEO, require more invasive methods that mirror terrestrial mining methods.

He queried "what is responsible mining? Is it sticking with the same intensive mining practices we already have on land?"

The CEO is actively encouraging more discussions on the matter with NGOs, but feels like these talks hit a brick wall before they get properly started.

Many environmental, social and governance initiatives in mining require "much tougher policing" and the mandatory introduction of recognized standards, according to Eric Rasmussen, natural resources director of the European Bank for Reconstruction and Development.

Adam Matthews, director of ethics & engagement at The Church of England Pensions Board said earlier this year that "we're at the dawn of a new dynamic," as ESG concerns have become linked to the transition to a low-carbon future and a mainstream core expectation of investors, who are being encouraged to make interventions to bring about systemic changes.

It is looking increasingly likely that deep-sea exploration and extraction will play a role in that move to a net-zero future, how it's regulated and defined will be crucial.