Deep Sea Mining Poses Risks to Terrestrial Mining and Global Economies, Report Warns
Deep sea mining is anticipated to have a significant negative impact on terrestrial mining, potentially risking over $560 billion in annual export earnings, according to a new report from financial think tank Planet Tracker. The study, titled "Race to the Bottom," argues that the financial benefits of seafloor mining are negligible and calls on governments and investors to prioritize environmental preservation and improvements in land-based mining practices.
The findings follow U.S. President-elect Donald Trump's recent nomination of Elise Stefanik as the country's ambassador to the United Nations. Stefanik has been a vocal supporter of securing critical minerals from polymetallic nodules—potato-sized rocks found on the ocean floor. These nodules, abundant at depths of 4 to 6 kilometers in regions such as the Clarion-Clipperton Zone (CCZ), are already being explored by companies like Canada’s The Metals Company (NASDAQ: TMC), which holds two exploration contracts.
The Planet Tracker report comes shortly after the International Union for Conservation of Nature (IUCN) warned that over 40% of coral species are at risk of extinction due to human activities, including deep sea mining, bottom trawling, and drilling for oil and gas. These concerns coincide with ongoing discussions by the International Seabed Authority (ISA) regarding the finalization of a Mining Code to govern deep sea mining, which is expected to be adopted in 2025.
According to Planet Tracker, even under optimistic scenarios, countries engaged in deep sea mining may only see an annual corporate income tax revenue of approximately $6.25 million, a figure that pales in comparison to the potential environmental costs. Emma Amadi, an investment analyst at Planet Tracker, stated that the minimal financial returns make deep sea mining economically questionable. She noted, "Countries do not own the mineral resources in international waters, and companies can choose sponsorship from any ISA member state, leading to a 'race to the bottom' in corporate tax rates."
The report also estimates that royalties from deep sea mining, another potential source of revenue for nations, could range from $42,000 to $1.1 million annually—an insignificant amount for most economies. Furthermore, these royalties could be subject to arbitrary reductions by the ISA, reducing the likelihood of significant payouts to member states.
The Metals Company, a key player in the deep sea mining sector, has disputed Planet Tracker's findings. A spokesperson for TMC described the report's projections as overly simplistic, stating that the estimates fail to capture the complexities of the industry. The spokesperson emphasized that TMC’s comprehensive SEC-compliant Initial Assessment for its NORI-D project projects $7 billion in life-of-mine royalties for Nauru and ISA members, along with $9 billion in life-of-mine taxes.
Another report by Planet Tracker, titled "Mining for Trouble," highlights the broader economic risks associated with deep sea mining. It estimates that terrestrial mining countries, particularly those mining minerals like copper, cobalt, nickel, and manganese, could lose a combined $560 billion in annual export revenue if deep sea mining disrupts established industries. Additionally, previous research suggests that deep sea mining could cause up to $500 billion in damages to global biodiversity, with ecological impacts up to 25 times greater than those of land-based mining.
Despite these risks, proponents of deep sea mining argue that extracting minerals from the seabed could help meet the increasing global demand for key resources like copper and rare earth metals. According to the International Energy Agency, demand for copper and rare earths is expected to grow by 40%, while demand for nickel, cobalt, and lithium for clean energy technologies alone is projected to grow by 60%, 70%, and 90%, respectively.
