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Seabed mining may 'revolutionize' sector

A new regulatory framework is due to be in place by 2020 for seabed mining, which Vale SA unit Vale Australia Pty. Ltd.'s former general counsel Robert Milbourne says has the potential to "revolutionize" the sector across various commodities. However, other experts are divided about its necessity and impact.

In 2017, Milbourne founded Mining Standards International, which is advising International Seabed Authority member governments and companies on the emerging regulatory framework for deep seabed mining, which he said would be a "transformational revolution" as it could "entirely disrupt the global nickel, copper and cobalt industries."

Barrick Gold Corp. chief innovation officer Michelle Ash re-ignited interest in seabed mining in the World Gold Council's recently released Gold 2048 report, saying that miners would likely turn their attention to marine-based projects, given two-thirds of the world's surface is under the ocean.

She said that while this presents a number of challenges, "they can almost certainly be overcome in the next 30 years or so."

Ash said the impact could also benefit gold mining, but industry first needs to develop suitable drill rigs and sensor technology for exploration, combined with big data analytics and machine learning, to pinpoint deposits before considering extraction methods.

High-grade seafloor massive sulfide (SMS) systems and polymetallic nodules generally contain copper in addition to significant concentrations of gold and other metals.

"Although it is still at an early stage, if successful this technology, or technologies that follow from it, could be scalable, as there are estimated to be in the region of 5,000 SMS systems worldwide," she said, citing a Nautilus Minerals Inc. report from 2017.

Seabed opportunities from Japan to Africa

DeepGreen Resources Inc., founded by David Heydon having previously started Nautilus, has also partnered with Glencore PLC, Maersk Supply Service A/S and Fiore Group to recover polymetallic nodules from the Pacific Ocean's Clarion Clipperton Zone, spanning 4.5 million square kilometers between Hawaii and Mexico, which Milbourne said is " absolutely full" of the nodules Ash was talking about.

Milbourne said significant rare earth deposits also exist in Japan's Exclusive Economic Zone, while diamonds have been found offshore in Namibia and Angola.

"The impact will be dramatic because you're virtually able to get very limited social and environmental harm in essentially a limitless resource for nickel, cobalt and manganese, which is just not possible anywhere else," he said.

Ash added that if industry can "find a way to start the tunneling process, dewater it and create an airlock, it would be possible to develop an underground mine in the same way as on land. We could then use small processing facilities close to the face to send up a concentrated slurry form of the mineral."

"Technology will have to improve but this scenario is certainly feasible when we look at the future of gold mining."

The WGC's report said global gold production faces "secular decline" in the longer-term, and Ash said rising environmental concerns on land, water, waste and dust were pushing mining underground, which MinEx Consulting strategist, mining economist John Sykes, agreed with.

Land-based mining is evolving too

Sykes said that as a high-value metal that generally came in smaller deposits, gold is more amenable to underground mines, so "maybe gold is teaching us all a lesson." However, he added that the seabed technology Ash described could actually assist in land-based mining.

"If you can do that like [exploiting] oil [resources], you can also do that on land, and you've still got about 85% of Australia which is under deep soil cover which, in some cases, is kilometers deep," he said.

"So it's actually more applicable as a technology there than it is out to sea. If you have that skill set, it opens up a whole lot of land to you."

Ash noted an existing example of marine-based mining in China where the mine is 700 meters below the seabed, with 200 meters of water cover.

"I believe sub-ocean mining is considerably more practical than alluvial mining, dredging river deltas and such to extract gold," Ash said.

She said alluvial gold mining creates many more environmental issues than "appropriately conceived" marine mining as the mineralization is invariably close to land and shallow areas so it is more likely to overlap with spots where there are significant fish life, seaweed, fishing and other people-based activities.

Gold miner St Barbara Ltd.'s CEO Bob Vassie said seabed mining was a longer-term option given the abundance of gold under cover yet to be extracted from land-based geology.

While a few years ago geologists could "chip the rocks on the surface, get the anomalies, follow up with the drill and be into deposits," the ore bodies miners are trying to find now can be under 30 meters of transported cover which needs to be drilled through just to hit the top of the hard rock basement to sample.

"Whatever you do, you're impacting the environment in some way. It comes down to how well you mine, rehabilitate, follow world standards and involve the community. If you did seabed mining and you're not very good at it, it's going to cause a problem," he told S&P Global Market Intelligence.