The Legal Fight Over Deep-Sea Resources Enters a New and Uncertain Phase

The past month was a flashpoint in the future of deep-sea exploitation – a future inexorably linked to the transition to a decarbonized economy. Deep-sea exploitation is governed by the International Seabed Authority (the ISA), an intergovernmental organization established by the United Nations Convention on the Law of the Sea (UNCLOS). The ISA’s authority covers a large swath of the ocean floor known as “the Area,” which UNCLOS Article IX delineates as “the seabed and ocean floor and subsoil thereof, beyond the limits of national jurisdiction.” The ISA previously adopted regulations for prospecting and exploration of the Area, but despite years of trying, has never finalized a Code for seabed exploitation. Consensus has remained elusive – and now time seems to have run out.

In July 2021, the Pacific Island State of Nauru triggered Section 1(15) of the UNCLOS Implementation Agreement, a provision that establishes a two-year window for the finalization of a set of rules, regulations, and procedures to govern seabed exploitation. If, by 9 July 2023, a Mining Code was not finalized, then Section 1(15) dictates that the ISA was required to begin considering and provisionally approving deep-sea mining contracts without overarching regulations. Nauru triggered the two-year rule in part because of a contract with The Metals Company, a resource extraction company with plans to begin exploitation in the Clarion-Clipperton Zone with Nauru as its sponsor in as early as 2024. The Clarion-Clipperton Zone is a vast abyssal plain in the Pacific Ocean that is of particular interest to miners, as it is rich in valuable and rare heavy metals.

Despite years of intensive ISA discussions, July of 2023 came and went without a finalized Mining Code. Though the member States of the ISA agreed to continue negotiating with an “indicative target” of adopting a Code by 2025,  this agreement is not legally binding, and by the letter of UNCLOS and Section 1(15) of the Implementation Agreement, the ISA must “none the less consider and provisionally approve such plan[s] of work based on the provisions of the Convention and any rules, regulations and procedures that the Council may have adopted provisionally, or on the basis of the norms contained in the Convention.” The Metals Company has announced plans to submit an application for exploitation to the ISA in 2024.

The consequences of the failure to finalize a Mining Code are murky. The Implementation Agreement directs the ISA to provisionally consider mining applications based on provisional rules, regulations, procedures and norms – but those are provisional for a reason. In 2018, the ISA published Draft Regulations on Exploitation of Mineral Resources in the Area, a document that has repeatedly been revised in the intervening years. While the Draft Regulations show consensus on basic aspects of exploitation, like baseline pollution control and contracting, provisions concerning the permitted quantity of mining and the collection of mining royalties remain contested. For instance, the process for calculating ore grade for royalty purposes and whether to assess royalties based upon wet or dry ore remain unsettled five years after the last Draft Regulations were published. Even if the Draft Regulations are finalized, the ISA does not have submersibles or ocean-going vessels at its disposal for enforcement, suggesting that the Draft Regulations could be a paper tiger without more financial resources.

 Deep-Sea Mining and the Green Economy

Deep-sea mining is a hot topic because the seafloor is littered with rare earth metals that are the backbone of renewable technologies. Cobalt, nickel, and magnesium are particularly essential in the batteries that power the vehicles of the future; they are also rare, and current terrestrial supply chains are precarious and fraught with human rights abuses. (For a complete treatment of the depravity of the cobalt supply chain, see Siddharth Kara, Cobalt Red: How the Blood of the Congo Powers our Lives (2023)). The Democratic Republic of the Congo, for instance, accounts for sixty to eighty percent of worldwide cobalt supply, and instability and profiteering within the country has undermined the possible expansion of green technology. Human rights and corruption concerns in rare earth metal supply chains thus limit the feasibility of rapid increases in production volume of things like batteries and wind turbines. Accordingly, as demand for electric vehicles and renewable power generation grows, the need for rare earth elements is outstripping the supply.

While some States and corporations believe the solution lies miles below the ocean surface, the cost of extracting metals embedded in the seafloor may be too great. The seabed harbors tons of  polymetallic nodules, small rock clusters with high concentrations of rare earth elements, but these nodules are submerged in tracts of biodiverse land that provides sustenance for much of the ocean ecosystem. The Clarion-Clipperton Zone alone has an estimated 21 billion tons of polymetallic nodules, clusters that are rich in cobalt, manganese, and nickel, among other rare earth elements. (James R. Hein et al., Deep-Ocean Polymetallic Nodules as a Resource for Critical Materials (2020)). By comparison, the total production of cobalt in the DRC in 2022 was 130,000 tons.

Though the technology is still experimental, the commonly proposed method of deep-sea extraction essentially involves dragging an undersea farming combine, which would unearth nodules from the seabed. Surface vessels then use hydraulic pumps to dredge up the unearthed nodules from the depths. This process, while effective at extraction, creates problems for the populations of flora and fauna that reside just below the sediment surface, known as the substratum. The primary issue is the creation of sediment plumes, or large clouds of dust and debris kicked up by the mining process. These plumes have high levels of metals and other toxic materials that can devastate surrounding ecology. Furthermore, because of the density of these plumes, the debris is often conveyed some distance by ocean currents and does not settle in the spot that it originated.

The science surrounding sediment plume effects is still unclear, but analysis from two test sites suggests that the ecological damage done by sediment plumes is diffuse and long-lasting. In 1989, Germany conducted an experimental simulation of deep-sea mining called the “Disturbance and Recolonization Experiment” (DISCOL). For nine years, researchers examined how an area rich in manganese nodules off the coast of Peru responded to mining operations, and how the ecology would experience and rebound from any negative effects. The project was abandoned in 1997, but resurgent interest in deep-sea mining sparked a return to the DISCOL site in the mid-2010s.

The return to the DISCOL site in 2018 found that the ecology of both mined plots and adjacent areas affected by sediment redeposition still have not recovered decades later. The area remains biologically barren. This aligns with the results of a several-year ecological investigation sponsored by an intergovernmental panel of European States. A scientific team accompanied an experimental mining vessel, the Patania II, to assess the impacts of a small-scale proof of concept on the seafloor. The team found that deep-sea mining had a noticeable effect on population density of seabed flora and fauna in both mined and adjacent areas. These expeditions demonstrate how sediment plumes kicked up by deep sea mining operations harm the ocean floor, an impact that reverberates throughout the entire aquatic biosphere.

The Pros and Cons of Mining without a Code

The biggest benefit to proceeding without a finalized Mining Code is time. The metals lying in the CCZ are vital to the clean energy transition, especially as States continue setting ambitious decarbonization goals. the United States announced a goal for 50 percent of car sales to be EVs by 2030; China is targeting 50 percent of sales to be EVs by 2035; France is planning to have seven million EVs on the road by 2030. Thus far, the ISA has entered into nineteen total contracts for the exploration of polymetallic nodules; if those alone were changed to exploitation contracts, the minerals would be enough to convert the entire global fleet of cars to EVs. Nauru’s partner, The Metals Company, estimates that its “exploration areas alone contain enough metal to potentially electrify over 250 million vehicles.” These are lofty numbers and short timelines, but they reflect urgency in the international community to move away from fossil fuel consumption.

Conversely, the true environmental cost of deep-sea mining may not become apparent until the damage is irreversible. The substratum is essential in the nutritional chain of the ocean, and the downstream effects of deep-sea mining may therefore entail far more environmental harm than good. Several of Nauru’s fellow Pacific Island States, like Samoa, Fiji, and Palau, have all called for a moratorium on deep-sea mining because of the potential environmental states. In the absence of an effective regulatory regime, the ISA will be limited in its ability to monitor and effectively vet potential mining operations – and island nations and the coastal communit, may be left with the bill. For now, the future remains uncertain, but the ISA’s failure to meet its deadline suggests seismic shifts in the rare earth metals market could be on the way.