DEEP SEA MINING: OVERLOOKED CONSIDERATIONS OF A SUPPLY CHAIN RESHUFFLE

The mining industry, along with many other industries throughout the world, is in the throes of upheaval, as countries scramble to establish secure, reliable supply chains for critical minerals. To stay abreast of this demand, the industry is reassessing the way it looks at mining and is turning towards assessing different ways these minerals can be mined.

Critical minerals are those that are considered critical for the clean energy transition. To keep abreast of the impending increase in demand for these minerals, the mining and resources sector must branch out and expand its mining capabilities.

Dr Éléonore Lèbre from The University of Queensland’s Sustainable Minerals Institute is one individual who is directing the conversation, examining the potential of deep sea mining (DSM) to meet this mineral demand and demonstrating how it may cause more problems for the industry than it can solve.

In a speech delivered at the 26th World Mining Congress, Dr Lèbre discussed the somewhat controversial topic of DSM in international waters and explored some of the overlooked considerations that a reshuffling in the supply source might bring to light.1

Dr Lèbre opened with the disclaimer that she does not consider herself an expert in deep sea mining, and instead examines the issue as a professional with knowledge about the mining industry and addressing global trends, including the energy transition and the global demand for critical minerals.

The topic of DSM is considered by some to be controversial, with many holding strong opinions about it, which led to Dr Lèbre stressing the importance of clearly distinguishing between what is known and what is less known on the topic.

“A global energy transition is underway, and low-carbon energy technologies all require a wide range of minerals and metals that will initially have to be sourced through mining,” Dr Lèbre said.

When considering the methods for mining, many turn to terrestrial mining as the method to mine for these minerals and metals. However, some of these minerals and metals can be found in large quantities in the deep sea. Cobalt, copper, manganese, and nickel in particular, are found in high concentrations in potato-sized lumps called polymetallic nodules, which have been the main exploration targets in international waters.

Issues in the critical mineral supply race

According to Dr Lèbre, the nexus between the energy transition and the mining sector has given rise to a lot of concerns. More than 100 new policies have been designed to address the issue of sourcing the critical minerals required to facilitate the energy transition.

Decision makers are concerned about two big issues when it comes to sourcing these minerals; that supply will be disrupted, which would delay or even compromise the energy transition, and that transitioning to renewable energy would come with significant social and environmental impacts, induced by mining activities.

Proponents of DSM claim that the activity would be able to address both of these concerns.

In terms of the concern for supply risk, advocates say that DSM will contribute to energy security by diversifying supply and providing much needed metals at a low cost, thanks to increased competition between suppliers. These supporters also say that DSM would reduce reliance on countries like China that currently have an overly strong influence on supply and in some cases a near monopoly.

Supporters also claim that DSM may have the potential to be less harmful than conventional mining, citing human rights abuses in the Democratic Republic of the Congo around cobalt mining, and deforestation in Indonesia caused by nickel mining.

Risk of supply disruption: a reasonable concern?

Among the data spurring critical mineral mining on, Dr Lèbre said there were a few doomsday scenarios, both in academia and elsewhere, that predict that mineral resources are insufficient to meet the demand for critical minerals. Dr Lèbre said these scenarios are generally not supported by the rest of the scientific community.

“There definitely is a strong demand outlook. A recent study finds that deploying electric vehicles with 100 per cent penetration by 2050 can increase lithium, nickel, cobalt, and manganese demands by 75 times, 54 times, 27 times, and 28 times respectively (Zhang et al. 2023),” Dr Lèbre said.

The availability of these resources does not seem to be an issue, with Dr Lèbre referencing the International Energy Agency's (IEA) 2021 report, in which the IEA did not find any sign of resource shortages.

The real issue, however, appears to be access.

“Mining production is concentrated in a few countries, and accessing large quantities of minerals on time to meet net zero targets may be challenging.”

Dr Lèbre summarised that supply risk appears to be real, with the situation being unprecedented, and a lot of uncertainty in demand projections, which itself contributes to risk.

“As a result, manufacturers of renewable energy technologies are moving fast. Battery makers are moving away from cobalt. Tesla recently announced that they would be moving away from rare earth elements.

“Governments are making strategic moves to onshore production, or secure partnerships with producers, and diversify supply.”

Dr Lèbre said that overall, it seems decision makers are progressing to mitigate this supply risk, and perhaps DSM in international waters is not really needed despite the risk.

She also said that DSM might not really diversify the supply chain after all, and that polymetallic nodules would only supply four of more than 30 critical minerals.

“Besides, DSM might not help diversify supply away from China, given that the country currently holds the highest number of exploration contracts awarded by the International Seabed Authority (5 out of 31 contracts) and has shown strong interest in DSM development.”

The social and environmental cost

“We often hear that transitioning to low-carbon energy means more mining. And there are concerns about the land area that will be needed for mining these critical minerals. More mining means more land disturbance, which has both social and environmental implications.

“But that’s actually not quite right,” Dr Lèbre said.

She said that transitioning to low-carbon energy does not mean more mining, and that factoring in the reduced need for coal mining, and oil and natural gas extraction as the transition progresses, an overall decrease in extractive activities is evident.

In Figure 12 the mineral requirements of the transport and electricity sectors are displayed, with the graph itself a measure of “total material requirement”, and considering all extracted material including overburden, waste rock and tailings.

“The material intensity in the transport sector increases over time, even though fossil fuel consumption decreases. That’s because electric vehicles are particularly material intensive,” Dr Lèbre said.

When examining the total material requirement curve for the electricity sector (in light brown and grey in Figure 1), there is an evident decrease.

“When you put the two sectors together, there is an overall decrease in total material requirement over time.

“This study shows that there actually is a decrease in extraction rates over time. That’s because, in the current system, fossil fuels need to be constantly fed into the system.

“Whereas in the future renewable system, metals are needed for the production of a solar panel, let’s say, but then this panel can be used for 20 years or so. No need for more metals during that time.”

Dr Lèbre said this is good news as it signifies that transitioning to renewable energy can potentially facilitate the decoupling of growth from material consumption.

“Overall, we can anticipate a net decline in extraction rates over time. This does not mean there is no reason for concern, however. There will still be an increase in critical mineral extraction, and the increasing demand for critical minerals will require opening new mines. At the same time, coal mines will need to be retired, which generates closure challenges.”

Dr Lèbre concluded that the second concern, about social and environmental costs, is justified, but not as much as one may think.

Proponents believe DSM can help alleviate some of the social and environmental impacts induced by conventional mining, and that it will be less harmful than mining on land.

Dr Lèbre referred to a recent scoping study for a social impact assessment for a DSM project.

“The document cites research articles on the negative social and environmental impacts of mining as an argument for exploring alternatives, namely DSM,” she said.

“It says that DSM will not require tailings storage facilities, hence there won’t be a risk of storage failure like the catastrophic ones that happened in Brazil recently. It also claims that DSM will have virtually no social impacts, since nobody lives nearby deep-sea deposits.

“A scientific paper sponsored by a deep-sea mining company also claims that terrestrial mining impacts could be relieved by DSM, ‘in effect trading loss of abyssal biodiversity for maintenance of terrestrial biodiversity’.”

"I am not a biologist, so I won't go into the biodiversity question."

Dr Lèbre .reflected on the impact a rise of DSM would potentially have on the mining sector, referring to a recent paper from the World Economic Forum (WEF).

Dr Lèbre said experts interviewed by the WEF predict that DSM would result in lower revenue flows from terrestrial mining, existing high-cost terrestrial mines would become less commercially viable, and there would be reduced commercial incentives to explore for new mineral deposits on land.

“The increased availability of metals found in the deep sea would affect global commodity markets in the form of decline in metal prices and tougher competition between different market participants.”

The WEF results stress that these effects are highly uncertain. DSM having an effect on the terrestrial mining sector is a conceivable scenario that depends on a range of parameters that are currently unknown. The WEF results introduced the possibility that DSM could generate an economic downturn for terrestrial suppliers, at least the ones producing cobalt, copper, manganese, and nickel.

Triggering a potential economic downturn

When discussing a potential economic downturn for the mining sector, Dr Lèbre said it would be bad news for the current active social and environmental footprint of the sector as the mining sector needs to be financially healthy so that it can share benefits and mitigate its negative impacts.

“Mining-dependent developing countries may get negatively impacted. In these countries, mining has negative impacts, but it also contributes to economic development, including creating opportunities for decent employment, business development, increased fiscal revenues and infrastructure linkages,” she said.

Low commodity prices directly translate into lower mining revenues and therefore lower benefit sharing. In times of economic downturns, the industry will seek to maintain profit levels and minimise financial risk.

“At the local mine site level, this can translate into mine abandonment, resulting in premature and unplanned mine closure; care and maintenance of the project, where operations are halted and staff presence is at a minimum number; and divestment, where the project is sold to another company.

In the case of mine abandonment, Dr Lèbre said site rehabilitation can be compromised, with environmental legacies getting transferred to the state and leaving local communities in limbo. In care and maintenance periods, she said social and environmental programs are frequently cut, and in ownership changes sometimes ‘inherited’ social and environmental commitments are not carried over by the new owner.

Can DSM solve mining problems?

“I don’t see why DSM would solve any of our issues,” Dr Lèbre said.

"Unlike DSM, the impacts of conventional mining are well known. And we know how they can be mitigated.

“There have been decades of research on the social and environmental impacts of mining, some of which has been carried out by the Sustainable Minerals Institute.

“We also know what good practice can look like, and we know that the industry has the potential to greatly improve, provided it is given enough incentive for it. We need investors and governments to nudge the industry in the right direction.”

Dr Lèbre outlined a series of recommendations for the sector and stakeholders to consider when it comes to the future and potential DSM mining.

Assess your vulnerability to a rise in DSM

Dr Lèbre encouraged mining companies and jurisdictions to assess their vulnerability to a rise in DSM production, with assets located high in the cost curve potentially being particularly vulnerable. She also recommended assessing the vulnerability of the communities in which these assets are located.

Invest in innovation to stay competitive

Dr Lèbre said that miners often focus on technical innovation and that social and environmental innovation often gets overlooked. There is an increasing demand for this kind of innovation, so it will become a competitive advantage.

Make careful decisions about where to invest in new mining projects

Placing emphasis on “where”, Dr Lèbre said there is a lot of spatial data available that can be used to better understand the local, regional and national context in which a mining project is located. Context knowledge is the first step in social and environmental innovation.

Invest in recycling

There is untapped potential for recycling at mine sites. Cobalt, for example could potentially be sourced from mining waste instead of th e deep sea.

It is unclear when DSM will commence but pressure is growing for the activity to start. The International Seabed Authority is still due to release a regulatory framework for DSM, which will influence the pace and scale of this activity, and thus its effect on global commodity markets. Dr Lèbre said that people need to look to the future and anticipate what will come next.

Footnotes:

1. Éléonore Lèbre, Anthony Kung, Ekaterina Savinova, Rick K. Valenta, Mining on land or in the deep sea? Overlooked considerations of a reshuffling in the supply source mix, Resources, Conservation and Recycling 191 (2023), 106898