Deep-sea mining policy negotiations forge ahead following UN body meeting

Negotiations from Oct. 30 to Nov. 8 by a UN-chartered body to advance rules on deep-sea mining produced a marked-up draft of regulations for members to pore over as they prep for the next meeting in March 2024.

Delegates present at the recent negotiations in Kingston, Jamaica, discussed a variety of potential modifications to the current draft mining code, including proposals out of intersessional working groups coordinated by different country members of the International Seabed Authority (ISA) council. The rules would govern whether and how companies could scrape the sea floor for crucial metals needed to supply the global energy transition away from fossil fuels.

The negotiations were overshadowed by growing calls for a moratorium on the granting of exploitation licenses. The UK, home to Loke Marine Minerals AS subsidiary UK Seabed Resources Ltd., became the latest country to back a moratorium on Oct. 30, joining 22 others.

"The agreement here is that, yes, we need strong regulations in place and [to secure] that there is minimum environmental impact or acceptable impact," Walter Sognnes, CEO of Loke Marine Minerals, told S&P Global Commodity Insights. "There is no discussion of a moratorium because [the ISA's] ... only task is to have exploration and production regulations in place."

The United Nations Convention on the Law of the Sea tasked the ISA with developing deep-sea mining regulations in 1994. Nauru Ocean Resources Inc., a The Metals Co. Inc. subsidiary that is sponsored by the Nauru government, activated a clause requiring regulation to be in place within two years, or by July 9, after it applied for an exploitation license in mid-2021. The Metals Company was formerly known as DeepGreen Metals Inc.

After the ISA missed the July deadline, the body set a new target of July 2025 for mining regulations. In the meantime, the ISA must consider mining companies' license applications, despite opposition from groups backing a moratorium.

High stakes for deep claims

Would-be deep-sea miners are targeting polymetallic nodules — particularly those located in a 5,000-km region of the Pacific Ocean called the Clarion-Clipperton Zone — that contain in-demand energy transition metals including nickel, cobalt, manganese and rare earth elements.

The Metals Company's NORI deep-sea mining project, for example, is estimated to have a net present value of approximately $10 billion using current metal prices, company CFO Craig Shesky said during an Aug. 14 earnings call. The company plans to submit an exploitation contract for the project in the second half of 2024.

The Metals Company welcomed the ISA's recent talks and looks forward to the establishment of a single mining code, a company spokesperson said in a Nov. 9 email.

However, the company took a firmer line a week earlier.

"We strongly believe that we're getting very close to the end," Corey McLachlan, head of stakeholder engagement for The Metals Company, said during a Nov. 2 press call on the Kingston talks. "We have a number of states and stakeholders that have the stated objective of delaying the adoption of the regulations indefinitely, but the overwhelming majority of states want to complete [the regulations], they understand their legal obligations, and they're working very hard towards that."

Opposition mounts

Although deep-sea mining regulation talks are continuing, the ISA is facing a growing chorus seeking a pause, moratorium or ban on the practice.

In early July, shortly after the ISA missed its regulatory deadline, more than 16 nations had called for at least one type of restriction on deep-sea mining. That number has since grown to 23 states, according to the Deep Sea Conservation Coalition, a group of nongovernmental organizations and think tanks. In addition to the UK, Canada and Switzerland have weighed in against deep-sea mining in recent months.

"As the meeting at the ISA comes to a close, it is becoming increasingly evident that the regulations under negotiation here have major gaps, and it will take many years before those gaps may be closed," Jessica Battle, global lead for the No Deep Seabed Mining initiative at the World Wide Fund for Nature, said in a Nov. 9 statement. "It is our shared responsibility to safeguard the ocean from the potentially destructive impact of this industry, preserving its natural beauty and renewable resources for generations to come."

The US has not formally signed on to United Nations Convention on the Law of the Sea, while China, the largest market for and producer of electric vehicles, has been a full- throated supporter of extracting metals from the sea floor.

The ISA council will hold its next meeting in March 2024, followed by another set of meetings in July 2024. The other organs of the ISA will also meet periodically through August 2024. A final rule is expected by July 2025.

The ISA did not immediately respond to a request for comment.

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