Deep sea mining for battery metals could finally make a big splash this year

The International Seabed Authority to release exploitation regulations by July
TMC is ready to sell 3,000 tonnes of polymetallic nodules upon green light
Environmentalists and some automakers not so keen on deep sea supply chains

Deep-sea mining could become a reality this year with the International Seabed Authority (ISA) targeting exploitation regulations by July.

It’s a contentious new supplementary mining industry that could supply key metals for the energy transition, with cobalt, nickel and manganese found in great reserves on the sea floor in the form of polymetallic nodules contain sufficient battery metal resources to build millions of electric vehicles.

But environmentalists – and some member nations of the ISA like Germany, Costa Rica and Panama – have called for a delay in issuing new rules until the environmental impact of hoovering up the sea floor for battery metals is better understood.

When it comes to seabed mining, more nations agree:

We simply don’t have the science or regulations to protect deep-sea habitats right now.

And no mining should take place until we do, implores our @Allatsea4. https://t.co/3M2Pvv9Qxo

— Pew Environment (@pewenvironment) January 8, 2023

Enough to power 280 million electric vehicles

Few companies had attempted to make a commercial operation out of deep-sea mining until 2021, when the tiny Pacific Island nation of Nauru said its sponsored entity, The Metals Co. Inc (TMC) subsidiary Nauru Ocean Resources Inc (NORI) would apply for an exploitation contract in 2023.

In November, a subsidiary of TMC lifted 3,000 tonnes of nodules from the Clarion–Clipperton Zone, a valuable stretch of ocean floor between Mexico and Hawaii.

But the company can’t use a single nodule for commissioning their pilot processing plant until they receive an exploitation contract from the ISA – a bit awkward considering it was their plan to apply for an exploitation permit which kicked off the ISA’s two-year regulatory development process in the first place.

TMC’s two exploration contracts in the Clarion–Clipperton Zonecomprise enough in situ metal for 280 million electric vehicles.

And at a time when securing battery metal supply chains are front of mind, you can see why the company is chomping at the bit to get up and running.

TMC CEO and chairman Gerard Barron told S&P Global Commodity Insights that complaints by the scientific community fail to consider the environmental harm created by land mining and noted that investors are excited about the company.

Investors and consumers are chasing those ESG credentials though, and maybe deep sea mining represents a shift away from chasing cobalt supplies from the Congo where child labor issues abound.

Well, maybe apart from the USA who signed a memorandum of understanding in which the it will support the DRC and Zambia in developing an electric vehicle value chain last month…

But with projected demand set to soar in 2026, countries are scrambling to secure supply.

No regulations might be no problem

Adopting exploitation regulations will require a consensus from all 167 member states in the ISA council, but if that doesn’t happen by the deadline, the project application submitted by TMC would likely be considered and approved provisionally – despite the absence of regulations.

But it might be harder than expected to make offtake deals, with automakers including BMW Group and AB Volvo signing a World Wildlife Fund petition to pause deep-sea mining.

At the time, BMW head of Supply Chain Sustainability and Indirect Purchasing Raw Materials Management Patrick Hudde said the procurement of raw materials requires particular care and that “there are currently insufficient scientific findings to be able to assess the environmental risks of deep-sea mining.”

“For this reason, raw materials from deep-sea mining are not an option for the BMW Group at the present time,” he said.

But that was in 2021, and with supply soaring it remains to be seen whether or not companies like TMC will get their permit and be able to secure their slice of the battery metals supply chain.