The imperative to ban seabed mining

The imperative to ban seabed mining

by Nostromo Research

25th May 2006

The United Nations Convention on the Law of the Sea allows coastal states to explore resources within a 200-nautical mile EEZ (Exclusive Economic Zone). This is largely the result of a political compromise, hammered out over many years between rich nations and "lesser developed" states. The fact that most economic polymetallic sulphide nodules are to be found in the South, served to heighten the debate.

Contrary to widespread impressions (including those in the article below) commercial "scientific" investigation of minerals on, or close to, the ocean floor started even before the Convention was signed in 1982, with BHPBilliton and Rio Tinto/Kennecott heading up deepsea mining consortiums .

The First Convention on the Law of the Sea established that the resources of the seabed were beyond the limits of national jurisdiction and thus "the common heritage of mankind"

No sooner had those noble words been broadcast than the tussles began. As the United Nations puts it: "The developed countries took the view that the resources should be commercially exploited by mining companies in consortia and that an international authority should grant licenses to those companies.

"The developing countries objected to this view on the grounds... that the most appropriate way to benefit...was for the international community to establish a public enterprise to mine the international seabed area.

"Thus, the gamut of proposals ran from a 'weak' international authority, noting claims and collecting fees, to a "strong" one with exclusive rights to mine the common heritage area, involving States or private groups only as it saw fit." The "solution" was to make possible both the public and private enterprises on one hand and the collective mining on the other - the so-called "parallel system", administered by the Internatinal Seabed Authority. [see: http://www.un.org/depts/los/convention_agreements/convention_overview_convention.htm]

In fact, the system is barely working and the pretended "solution" is being challenged anew. The Northern states of Canada, Denmark and Russia are now vying for control of a huge underwater mountain ridge in the High Arctic.

In theory there is nothing to prevent a country like Papua New Guinea permitting a company like Nautilus and its joint venture sponsor, Placer (so-called "Pioneer Investors"), from digging up a significant amount of manganese, copper, gold, nickel, from within the state's EEZ - all under the guise of "investigation". At a later stage, Papua New Guinea can gain permission for commercial exploitation from the International Seabed Authority - though of course, that is by no means the same as enabling Papua New Guinean citizens to profit from eventual sales, any more than they do when mining takes place on land.

Numerous questions beset any move from oceanbed exploration to exploitation. It's not only the location and economic value of seabed minerals which are at issue, but the technology which might be employed to extract them. Suction, scooping, bucket dredging, all carry environmental liabilities, and depend on a surface vessel - often contending with choppy seas - for processing. As usual, waste disposal is the key issue. Advocates of seabed mining contend that it generates less waste than comparable extraction on land . Insofar as the recovered minerals are higher grade than their terrestrial equivalent, this may be true.

But this is an also argument which was heavily employed to justify submarine tailings disposal (STD) - a practice now widely condemned, including by some in the mining industry. Indeed, the prospect of potentially acid-generating sulphide wastes toppling back into the sea from an insecure ship - or worse, deliberately being spread on the ocean floor where they then "upwell" towards the surface - may be even greater.

If ever there was an opportunity for "mankind" to take,at more than face value the rhetoric about its "common heritage", not to mention the precautionary principle, then it has surely arrived.

Banning all seabed mining is not an extreme position: it is an absolute imperative.
[Comment by Nostromo Research, London, May 25 2006]

Riches are calling from deep under the ocean

Toronto Globe and Mail

24th May 2006

Nautilus Minerals says it's ready to take the plunge on deep sea mining, OMAR EL AKKAD writes

OMAR EL AKKAD

A small Australian mining company believes it's on the ground floor of the biggest mining revolution in almost a century. The only catch: The ground floor is two kilometres below sea level.

Nautilus Minerals Inc. CEO David Heydon successfully completed his private, Sydney-based company's reverse takeover of Orca Petroleum Inc. this month, giving Nautilus a berth on the TSX Venture Exchange as of May 10. His company's investors are, in effect, betting $25-million in two-dollar shares on the concept of deep sea mining. The idea of pulling volcanic deposits -- believed to contain significant concentrations of high-grade copper and gold, among other metals -- from the ocean floor is so outside the mining mainstream that only two companies in the world are working on it. The process has also been traditionally considered unprofitable, leading to a dearth of research dollars.

But Mr. Heydon is staking a lot, including his own money, on what he describes as a technique with the potential to satisfy the near-insatiable hunger for metal in India and China.

"This is the biggest change in mining in 80 years," Mr. Heydon says. "This is a whole new frontier."

But that frontier is not without history. For the past 50 years, countries have claimed control over parts of the world's oceans for reasons ranging from security concerns to fishing rights to potential oil and gas revenue. The United Nations Convention on the Law of the Sea currently covers seabed claims, but there's no shortage of nations competing for control of the same parts of oceans. For example, Canada, Denmark and Russia are all trying to prove they should control the same underwater mountain ridge in the High Arctic that may contain rich mineral deposits as well as oil and gas.

As an example of how legally touchy the work Nautilus does is, the exploration licences Papua New Guinea granted the company in 1997 for areas along the country's coastline were the first of their kind in the world.

"There are all kinds of issues of who owns what where going on right now," says Greg Baiden, a professor at Laurentian University who is involved in one of the first major deep sea mining research projects in the world.

So far, underwater mining has mainly been confined to a few gold and diamond deposits, but those tend to be only a few hundred metres deep. Until recently, the technology simply wasn't there to make the process worthwhile. The areas being explored by Nautilus are rich in polymetallic sulphides -- when superheated water rises from below the ocean floor, it carries with it dissolved minerals, which form undersea towers called black smokers. When those towers eventually collapse, they leave behind ore deposits. However, these deposits can be 1,600 metres below sea level.

But more powerful drills and better undersea communication equipment have brought commercial production within the realm of possibility. Canadian researchers have been at the forefront of several advances in the burgeoning field. In 1993, University of Toronto professor Steve Scott discovered the area Nautilus is exploring near Papua New Guinea.

The potential payoff from these projects may also extend beyond simple profit, Mr. Baiden says. For example, researchers found tubeworms near the Marianas fault with the natural ability to process harsh chemicals. If miners are able to duplicate that technology on land, he says, it could revolutionize the processing part of mining, lessening its environmental impact.

But even if the commercial possibilities of deep sea mining are real, Nautilus is still selling a project many consider untested and financially risky. The company doesn't expect to reach first-scale production until 2009. There's no comparable traditional mining business model, since many of the individual deposits underwater are too small to be economically viable if they were on land. But because offshore drilling operations can move, whereas mines on land are stuck, the combined value of deposits in a wider area makes the operation worthwhile.

"The most common spot on the planet is underwater," Mr. Heydon says. "There aren't too many places like the Andes left." And because the deposits are on the ocean floor, Nautilus isn't digging through two kilometres of rock to reach them. The copper it's pulling out of the seafloor is also of a high grade. Both these factors mean the project generates less waste than mining on land, he says. Still, some environmental groups claim the process could prove fatal to fragile underwater ecosystems.

But no one knows exactly how much impact the process will have. There's no history of commercial production to draw upon, and only time will tell if deep sea mining turns out to be the industry's saving grace or just an overly ambitious dream.

"I'm doing a lot of speculating with you right now," Mr. Baiden says, "but I think there's a lot of potential to underwater mining."

The underwater gold rush: the potential

The worth of the oil, gas and minerals in the world's oceans is estimated to be in the trillions of dollars. If Mr. Heydon's estimates are correct, deep sea mining could have the potential to supply the world's growing demand for gold, copper and silver, among other metals. The resulting revenue could be in the billions of dollars for deep sea mining companies, of which only two currently exist.

The market

The economies of China and India, among the fastest growing in the world, are boosting demand for metals such as copper and gold, raising prices in the process. By some estimates, the number of cars in the world is expected to double by 2030, and each one will need up to 19 kilograms of copper.

The risks

This is a new frontier for mining companies, one considered too far-fetched by some in the industry. With the current projects still in exploratory and testing stages, there's no proof deep sea mining will work when it comes to full-scale commercial production. Even though deep sea mining companies say the process is more environmentally friendly than traditional mining because they're not drilling through the ground, environmental groups claim it could destroy underwater ecosystems.

The legality

Disputes over who owns what in the ocean have been a fact of global politics for decades. For reasons of security, potential resources and sometimes just pride, countries are constantly claiming control over new chunks of underwater property. As an indicator of just how rare it is to be able to mine hassle-free in the ocean, the exploration licence Papua New Guinea granted Nautilus was a world first.