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We know more about outer space than the ocean floor. Both are rich in natural resources. Miners plan to exploit them. Deep sea mining is closest to reality.
The Norwegian government pushed ahead with plans for mining in its waters in December. The International Seabed Authority, which regulates the seabed outside national boundaries, has issued more than 20 exploration contracts.
There are several hurdles to commercial production, which could begin in the second half of this decade. A heavy requirement for investment is one. Environmental objections are another. But rich deposits of minerals critical to the energy transition are likely to drive miners and regulators forward.
Almost all international exploration licences are in the Clarion-Clipperton Fracture Zone, in the Pacific Ocean near Hawaii. The geography of the region is rich in polymetallic nodules that sit on the seabed and contain cobalt, nickel, copper and manganese.
Extraction involves subsea collection vehicles that send materials up to a surface vessel for processing, avoiding the complications of drilling. Nodule collection is however damaging to seabeds and sea life due to sediments kicked up by mining. Germany and France are already backing a pause.
The Metals Company of Canada is the most advanced deep sea miner. It has been buying up permits and says it has 16mn tonnes of estimated nickel resources.
TMC is pursuing a capital-light approach. It has partnered with offshore energy group Allseas, which produces the technology and puts up capital investment. A test run collected 3,000 tonnes of nodules. The next stage is scaling up for commercial operation. This is expected in 2025, assuming regulatory and environmental approvals.
Shares in TMC have lost 90 per cent of their value since listing via a Spac deal in 2021. It managed to raise a fresh $23mn in August from existing investors but more funding will be needed.
TMC’s valuation is trading at a fraction of potential reserves compared to onshore metals resources. High costs and the prospect of environmental levies mean seabed mining is for intrepid and deep-pocketed investors only.
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