This article is part of our series on metals and mining. You may also like our guide to investing in battery metals.
Underwater mining refers to the process of extracting valuable minerals and resources from the seabed or ocean floor. It involves using specialized equipment and technology to access and retrieve minerals like metals, ores, and even precious gems from beneath the waters. This practice has gained attention due to the increasing demand for resources and the depletion of easily accessible deposits on land.
Here we explore the emerging underwater mining sector, shedding light on the deep-sea mining companies, stocks, environmental impacts, and the treasures lying beneath the waves.
Deep-Sea Mining Companies and Stocks
In the heart of the ocean, where sunlight barely penetrates, lie vast reserves of minerals and metals that have intrigued deep-sea mining companies for decades. These enterprises have invested significant resources in developing cutting-edge technologies to extract valuable resources from the ocean floor.
Leading the charge are several prominent underwater mining companies. These enterprises, driven by a fusion of technological innovation and economic promise, are dedicated to exploring beneath the waves.
Although the industry is still in its early stages, investors have been keeping a keen eye on deep-sea mining stocks. As these companies strive to overcome technical and environmental challenges, they could potentially bring about a significant shift in the resource market.
Major players in the marine mining market include Anglo American plc (LON: AAL), state-owned China Minmetals Corporation, and Loke Marine Minerals, among others. These companies, along with various research institutes and national organizations, shape the industry's landscape.
Anglo American plc (LON: AAL) mines underwater at depths of 100-140 meters using specialized ships and technology. Its Debmarine Namibia fleet operates from Port Nolloth in South Africa and stays at sea for about two and a half years. The ships refuel at sea and make their own freshwater. A 60-person crew works in shifts, spending 28 days on duty and 28 days off.
Norway's Loke Marine Minerals acquired deep-sea mining firm UK Seabed Resources (UKSR) from U.S. weapons manufacturer Lockheed Martin (NYSE: LMT) in March 2023. Norway, already rich from oil and gas, is now taking a lead role in seeking to mine metals from the ocean floor. Loke plans to start mining by 2030 and the company CEO Walter Sognnes said Loke will invest about $100 million in surveys and technology.
TMC the metals company Inc (NASDAQ: TMC), a Canadian company, aims to initiate mining in 2024, awaiting approval from the International Seabed Authority (ISA), a UN-affiliated agency responsible for regulating deep-sea mining. However, concerns about environmental impacts and a lack of comprehensive scientific understanding have prompted calls for caution and further research.
Blue Minerals Jamaica is a subsidiary of the Swiss group Allseas, which specializes in underwater oil and gas pipelines. Allseas also invests in deep-sea mining and partners with The Metals Company. Allseas is creating a system to gather polymetallic nodules from the ocean floor and transport them onto a ship for seabed mining companies to use.
The European Union subsidizes Royal IHC, a Dutch company, to create systems for sustainable deep-sea metal harvesting.
On January 14, 2013, Global Sea Mineral Resources NV (GSR), a branch of Belgian’s DEME Group NV (EBR: DEME), signed a 15-year deal with the International Seabed Authority. This contract grants GSR the sole right to explore for polymetallic nodules in the eastern part of the Clarion Clipperton Zone.
Impossible Metals (Y Combinator Winter 2022) aims to facilitate the world's shift to sustainable energy by responsibly mining and refining critical battery metals from the seabed. The company is developing underwater robots to collect these metals while preserving marine ecosystems. With over $500 million in off-take Letters of Intent, Impossible Metals has also partnered with a global offshore logistics firm that holds a seabed mining exploration permit.
The Promise and Perils of Deep-Sea Mining
To carry out underwater mining, companies employ remotely operated vehicles (ROVs) and autonomous underwater vehicles (AUVs) equipped with cutting tools, suction systems, and various sensors.
These machines can reach significant depths and navigate the challenging underwater environment. They gather mineral-rich deposits, which are then brought to the surface for processing.
Underwater mining primarily targets areas with abundant deposits of minerals such as polymetallic nodules, polymetallic sulfides, and ferromanganese crusts. These formations occur over millions of years as minerals precipitate from seawater onto the ocean floor, creating valuable accumulations.
However, the environmental impact of underwater mining is a subject of concern, as the process can disrupt marine ecosystems and habitats.
Regulations surrounding underwater mining are still evolving, as the practice presents unique challenges compared to traditional land-based mining.
International bodies are working to establish guidelines that balance the economic potential of underwater mining with the need to protect marine biodiversity and ecosystems.
Uncharted Terrain: Deep-Sea Mining Environmental Impacts
While the allure of underwater mining is undeniable, its environmental impacts have raised valid concerns. As these companies traverse the seabed in search of valuable resources, the ecosystem faces potential disruption. The process of seabed mining can disturb delicate underwater habitats and affect marine life.
However, proponents of underwater mining assert that advancements in technology and careful planning can help mitigate these concerns.
In a recent study, researchers found over 5,000 species living in the Clarion-Clipperton Zone (CCZ) of the North Pacific Ocean, between Mexico and Hawaii, where metals for EV batteries are targeted for mining. Surprisingly, most of these species are unknown to science.
This discovery coincides with the International Seabed Authority (ISA) considering mining in the area. About 438 species have been identified, with potentially up to 8,000 present. The CCZ, covered by valuable metal-rich rocks, is deep underwater.
Companies like The Metals Company want to mine these rocks, but the study has sparked debates about their impact on these enigmatic ecosystems. Clearly, more scientific insight is crucial before proceeding with mining plans in these delicate deep-sea environments.
Can You Mine Gold Underwater?
Ocean waters contain gold but in extremely low concentrations. Mining gold from the sea isn't practical due to the depth of the ocean and the challenges of extracting gold from rock on the seafloor. Currently, no profitable method exists for gold mining underwater.
Deep-Sea Mining Nodules
Polymetallic nodules, often referred to as the "potato of the sea," are a prime target of underwater mining companies. These mysterious formations are rich in valuable metals like nickel, copper, and cobalt.
Harvesting these nodules in remote and hostile environments, however, requires navigating both technical complexities and environmental considerations.
Beneath the Pacific Waves
One region that has garnered considerable attention in the realm of underwater mining is the Pacific Ocean.
Encompassing a significant portion of the world's oceans, the Pacific is a hotspot for deep-sea mining endeavors. Companies are setting their sights on underwater mining in the Pacific due to the presence of valuable resources such as polymetallic nodules and precious metals.
China vs. The World: The Deep-Sea Mining Battle
In a global face-off regarding deep-sea mining, China has taken a strong stance in favor of the industry, while other countries are advocating for caution and regulation.
International Showdown: The International Seabed Authority (ISA), a UN-affiliated organization that oversees deep-sea mining, recently concluded three weeks of intense meetings. Most nations represented at the ISA agreed not to approve mining applications until regulations are set in place. China, on the other hand, supports seabed mining and clashes with those calling for a moratorium or pause.
The Metals Company's Impact: The Canadian-registered firm, The Metals Company (TMC), sponsored by ISA member state Nauru, is most immediately affected by this decision. Nauru and TMC were pushing for firm regulations, as they planned to begin mining in 2024 for minerals used in EV batteries. TMC's significant projected earnings and close connections with ISA officials have raised eyebrows.
China's Influence: China holds the most mining contracts of any country and used its weight to block discussion on a proposal to prohibit the approval of mining licenses until regulations are in place. China's refusal created a deadlock in the Assembly, the ISA's supreme body. However, experts believe that China may not have the same leverage in 2024.
Growing Calls for Moratorium: Meanwhile, more countries are joining the call for a pause or outright ban on deep-sea mining, fearing the potential environmental impacts. Advocacy groups like Greenpeace International have also been active in pushing for a moratorium.
A De Facto Pause: Although mining contractors like TMC can still apply for mining licenses, the ISA Council is unlikely to approve them without proper regulations. The Council is looking to finalize those regulations by 2025, but nations remain divided on key issues, such as establishing a royalty rate. Thus, a de facto pause on deep-sea mining has arrived, with 20 nations supporting the pause and some even demanding a ban.
Significance: The international divide highlights the complex balance between the drive for valuable resources essential to modern technology and concerns over the unknown ecological consequences of deep-sea mining. With the seabed declared as the "common heritage" of humanity, the outcome of these negotiations will have far-reaching implications for both economic interests and environmental protection.
Underwater mining is a new industry that offers big rewards but also poses environmental risks. Companies in this field are exploring unknown territory, balancing the promise of profits with the need for safe methods. As the industry evolves, its progress and impacts will continue to be closely monitored, ultimately shaping the future of resource extraction in our ever-changing world.