The debate around deep seabed mining has been gaining attention as concerns mount about its potential impacts on ocean ecosystems. The ocean is host to countless species yet to be discovered, some of which could hold the key to breakthroughs in medicine.
The impacts of deep seabed mining on ocean biodiversity are still uncertain. At worst, we face losing species without ever knowing them. For instance, one type of mining targets hydrothermal mounds, which are known to be unique ecosystems filled with extremophiles — sea life that has adapted to extreme conditions of heat and toxicity to thrive.
It has long been known, then, that deep seabed mining is potentially bad news for ocean life. But deep seabed mining proponents use the language of “necessary sacrifice” to argue that the energy transition “will require trade-offs” for access to the necessary metals. This juxtaposition of biodiversity and the energy transition is a half-truth.
While the climate and biodiversity crises are intertwined, we should beware of pitting one against the other. Yet this is exactly what proponents of deep seabed mining are doing.
Into this fray come two recent studies published by Planet Tracker, a non-profit think tank focused on sustainable finance. In Race to the Bottom, Planet Tracker concludes that countries would receive minimal financial benefits from deep seabed mining. Mining for Trouble cautions that deep seabed mining would entail huge losses for mining economies.
Before delving into the economics of deep seabed mining, it would be useful to understand where the demand is coming from.
Energy transition 101
The basic building blocks of the energy transition are critical minerals. These are also known as critical energy transition minerals or critical raw materials. Battery metals such as nickel, cobalt, copper and manganese are particularly important, as they are used to power electric vehicles.
With electric vehicle adoption expected to surge by 2040, demand for battery metals is projected to rise dramatically, which will likely lead to an increase in mining.
According to the International Energy Agency, clean energy technology minerals are set to triple by 2030 and quadruple by 2040 in a net-zero energy scenario.
But the accessible ores of many metals have already been mined. As a result, land-based mining is becoming more technically complex, geographically remote or complicated for other reasons.
‘Battery in a rock’
(Shutterstock)
On the abyssal plains of the deep seabed, there are billions of tons of polymetalic nodules — metal-dense nodes containing nickel, cobalt, copper and manganese.
Deep seabed mining organization The Metals Company has dubbed them “a battery in a rock” and plans to begin mining operations in the Clarion Clipperton Zone of the Pacific Ocean in June 2025.
To date, issues raised about deep seabed mining mostly concern the lack of a governing regulatory framework, as well as uncertainties about its environmental, ecological and biodiversity impacts.
Economic and social risk estimates have mainly focused on impacts to coastal communities who depend on fishing for their livelihoods. The recent Planet Tracker studies change this by highlighting the economic impacts of deep seabed mining.
Economic impacts of deep seabed mining
Deep seabed mining presents a number of financial challenges. One concern is the potential impact on metal prices. Flooding the metals markets with ocean-mined metals would likely drive down the price of the metals, which would impact the financial viability of the land-based mines that are currently producing them.
There are also doubts about the demand for these metals in the quantities predicted. Battery technology is advancing rapidly, with alternatives like lithium iron phosphate batteries — used in 40 per cent of electric vehicles sold in 2023 — eliminating the need for cobalt and nickel. Emerging sodium-ion batteries are set to remove the need for copper.
(AP Photo/Sam McNeil)
The financial benefits to the International Seabed Authority — an international organization that regulates mining in most of the world’s oceans — would also be marginal. Projections estimate that annual royalties distributed among member countries to the United Nations Convention on the Law of the Sea (UNCLOS) would range from US$42,000 to US$7.35 million. This amount reflects both deep seabed mining corporate income tax and royalties.
In comparison, mining economies would lose more than US$560 billion annually in export earnings. This discrepancy arises because deep seabed minerals don’t belong to any jurisdiction and thus cannot be similarly taxed.
Regulatory hurdles
To obtain exploration licences for deep seabed mining, UNCLOS requires member states to sponsor a mining operator.
While sponsoring states can impose royalties on operators, some arrangements, such as those involving The Metals Company and Nauru, are part of agreements that include no corporate income tax. This, Planet Tracker cautions, can give rise to a “race to the bottom” where member states vie to give operators the most favourable terms.
Sponsoring states also face financial risks and can find themselves liable for large amounts when they can least afford it. Papua New Guinea, for example, was left to cover AU$157 million when Nautilus Minerals collapsed.
Finally, the financial viability of deep seabed mining itself is questionable. Even if profitable, the environmental remediation costs for deep seabed mining could exceed the value of any metals mined — and the damage may not even be reversible.
These financial and ecological concerns paint a bleak picture. Our oceans fulfil an important planetary role, both in terms of climate and in terms of biodiversity. Should we really disturb this balance with deep seabed mining when the numbers don’t even add up?