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April 20, 2015
Future of Mining: Race to the bottom
By: Adrienne Ratmansky

Deep-sea mining could level out the mining playing field for those countries traditionally considered resource poor and those seeking strategic access to Rare Earth Elements (REE).

Resources Below
Deep-sea miners are primarily looking for either of the two deposit types: Sea-floor Massive Sulphide (SMS) or Polymetallic Nodule (PN).

SMS Deposits
SMS deposits develop around old underwater volcanoes which developed from convergent tectonic plates. There the mineral rich hydrothermal fluids escaping from the earth’s core are solidify as they hit the cold surrounding water and precipitate onto the ocean floor. SMS deposits often carry high concentrations of copper, zinc, and lead, plus some gold and silver.1

PN Deposits
Potato sized rocks, known as PNs, developed over millions of years through the slow precipitation of sediments from divergent plates; they collect into pockets on the sea floor known as Placer deposits. These pockets can be large, containing several millions tonnes of ore, sitting on the floor of the sea or partially buried. These sites often contain oil reserves that developed from the decomposition of plants and animals.

PNs tend to be high in manganese, and also contain copper, cobalt and nickel. The estimated global reserves of deep-sea manganese nodules are in the order of 10 billion tonnes.2

REE

REE are also known to be present in these deep sea nodules and in higher concentration than on land.3

Why Deep-sea Mining
Easy to mine land reserves have been depleted and exploration is moving to more remote and unconsidered areas; increasing the price of traditional mining methods. New mines are being opened in more remote areas, like the Arctic or Peruvian mountain tops; but at higher production costs. Though underwater deposits have been known to researchers since the 1960, recent technological advances and resource price increases have changed the economics and made Deep-sea mining more feasible.4

REE’s are essential for the manufacturing of everything from mobile phones, laptop computers, LCD TVs, wind and wave turbines, motors and batteries in hybrid cars. Due to their economic importance, REE’s are of particular interest to deep sea miners.5

Starting in the early 1990’s, China had sold REE’s to the global market at low prices; forcing the closure of international competitors and increasing the world’s dependence on their supply. Although export quotas were announced to be lifted in the first quarter of 2015, there was a global scare in 2010 when, with approximately 95% of the global REE market, the Chinese government announced that they would restrict REE exports.6, 7 This move, if held long-term, would have encouraged companies that use REE’s to relocate their manufacturing facilities to China to ensure adequate supply of REE’s at a reasonable price.

The political move has resulted in the reopening international REE mines, investigation into REE alternatives and exploration for new REE reserves. China’s share of the global REE market has since dropped to approximately 90%.8

The United States Geological Survey estimates that China holds about 50% of the world's reserves of REE’s and deep sea reserves provide a large opportunity to diversify away from reliance on China.9

How
Traditional mining requires exploration drilling, construction of building, power and processing infrastructure, additional roadways, overburden management and operation of heavy operation equipment, leading to a large operational footprint.

By contrast, due to the nature of their formation, under water deposits have no or minimal overburden that needs to be removed, indigenous people are not displaced, extensive infrastructure is not required, and less heavy equipment is required for material collection and transportation, resulting in lower CO2 emissions than traditional mining.

To mine underwater, the ocean floor can be dredged with a bucket, or sucked up with an air lift system to the mining ship, then sorted for the desirable resources.10

As underwater drones and sensors improve, an intelligent suction drone may be sent to the ocean floor to presort and return a higher concentration of target mineral through an air lift system for further processing.

Where
Currently operational deep-sea mining includes diamonds off the shore of Namibia, tin from Southeast Asia and gold off the shore of Alaska. Pockets have been identified to exist around other parts of Africa, North America and Central America.11

Computer modelling of ocean swells are being used to predict reserve areas that are most likely to be economical for mining.

Risks Ecological
Mining the ocean floor may remove key organism, destroy their habitat, or blanket either with material from the mining process, which could destroy the local ecology. There may also be risks to releasing post-processed water off-shore.

Economical
Potential risk of over-supply to the market weighs on the future of deepsea mining. In 2015, the industry is projected to produce 300,000 more tonnes of copper than required.12

Safety
Ocean floor volcanic activity or unexpected ocean swells could interfere significantly with mining operations and increases the risk personnel.

Governance
The International Seabed Authority (ISA) is an intergovernmental body, with 164 member countries, established under the United Nations (UN), to organize and control all mineral-related activities in the international seabed area, which is just beyond the limits of national jurisdiction (NJ).

The NJ of a country is defined as a twelve-nautical-mile territorial sea plus an exclusive economic zone (EEZ) of up to 200 nautical miles from the baseline of their territorial sea. Within this zone they have exclusive rights to the continental shelf. Areas beyond this limit can be mined upon approval from the ISA.13

Who
According to the ISA, every country has the right mine their territorial sea and EEZ or to issue permits for royalties.14

Companies and countries that are already running sea mining operations in shallow waters (30 meters or less) include:

Table 1: Shallow sea mining15, 16, 17, 18, 19

Some of the companies exploring deep-sea mining include:20

  • Neptune Minerals in the Western Pacific

  • De Beers (Anglo American has 45% ownership) in Namibia

  • Nautilus Minerals (Anglo American owns 11%) in Papua New Guinea

Seven new exploration permits were issued by the ISA in 2014, in addition to the 30 that had been previously issued.

Countries or government associated agencies that have received exploration permits include: China, France, Germany, India, Japan, Russia, South Korea and an east European consortium.21

Over the next few years, many will be keeping a close eye on who is winning the race to successfully mine the sea floor, especially when it comes to REE recovery.


1 “Polymetallic Sulphides,” ISA, (March 2008), http://www.isa.org.jm/files/documents/EN/Brochures/ENG8.pdf (accessed March 30, 2014).
2 “Polymetallic Nodules,” ISA (ND), http://www.isa.org.jm/files/documents/EN/Brochures/ENG7.pdf (accessed March 30, 2014).
3 ”Rare Earth Elements: Deep Sea Mining and the Law of the Sea,” Mayer Brown, (ND), http://www.mayerbrown.com/Files/Publication/856c8826-2823-425a-b4df-b4603e4585b1/Presentation/PublicationAttachment/e45fc80e-0207-4e7a-8c13-b6a394ee776f/rare_earth_elements.pdf (accessed March 30, 2014).
4 International Seabed Authority.(ND) http://www.isa.org.jm/files/documents/EN/Pubs/ISA-Daolos.pdf (accessed August ‎27, ‎2014).
5 “Deep dilemma”, C&I Magazine (June 18, 2014) http://www.soci.org/Chemistry-and-Industry/CnI-Data/2014/6/Deep-dilemma.
6 “REE - Rare Earth Elements and their Uses”, Geology.com (ND) http://geology.com/articles/rare-earth- elements/.
7 Jamasmie Cecilia, “China to soon lift restrictions on rare earth exports,” Mining.com, (December 29, 2014) http://www.mining.com/china-in-no-hurry-to-lift-restrictions-on-rare-earth-exports-92539/ (accessed March 30, 2015).
8 Rutledge, Cheryl, “Rare Earths: China still holding 90% of Global Market,” Miningfacts.org (February 3, 2015), http://www.miningfacts.org/Blog/Mining-News/Rare-Earths--China-still-holding-90--of-Global-Market/ (accessed March 30, 2015).
9 “REE - Rare Earth Elements and their Uses”, Geology.com (ND) http://geology.com/articles/rare-earth- elements/.
10 “REE - Rare Earth Elements and their Uses”, Geology.com (ND) http://geology.com/articles/rare-earth- elements/.
11 Rutledge, Cheryl, Rona, Peter A., “ORE Geology Reviews: Journal for Comprehensive Studies of Ore Genesis and Ore Exploration,” (June 2008) https://marine.rutgers.edu/pubs/private/Rona_Marine_Minerals_OREGEO_2008.pdf (accessed March 25, 2015).
12 Ragan, James, “METALS-Copper futures drop, oversupply worries drag,” CNBC.com, (December 21, 2014) http://www.cnbc.com/id/102287766 (accessed March 30, 2015).
13 International Seabed Authority.(ND) http://www.isa.org.jm/files/documents/EN/Pubs/ISA-Daolos.pdf (accessed August ‎27, ‎2014).
14 International Seabed Authority.(ND) http://www.isa.org.jm/files/documents/EN/Pubs/ISA-Daolos.pdf (accessed August ‎27, ‎2014).
15 Rona, Peter A., “ORE Geology Reviews: Journal for Comprehensive Studies of Ore Genesis and Ore Exploration,” (June 2008) https://marine.rutgers.edu/pubs/private/Rona_Marine_Minerals_OREGEO_2008.pdf (accessed March 25, 2015).
16De Beers Deal With Firestone Diamonds At Groen River Pinpoints Effectiveness Of Firestone’s Geological Model,”Minesite.com, (June 29, 2005) http://www.minesite.com/2005/06/29/de-beers-deal-with-firestone-diamonds-at-groen-river-pinpoints- effectiveness-of-firestones-geological-model/ (accessed March 25, 2015).
17 “Southern African Institute for Environmental Assessment: Diamond Mining of Pocket Beach in the Sperrgebiet, Namibia,” http://www.saiea.com/case_studies09/18%20PocketBeachMining.pdf (accessed March 25, 2015).
18 “Minerals other than polymetallic nodules of the international seabed area,” International Seabed Authority.(ND) http://www.isa.org.jm/files/documents/EN/Pubs/2000-OtherMins.pdf (accessed August ‎27, ‎2014).
19 Hatcher, Jessica, “The White Stuff: Mining Giant Rio Tinto Unearths Unrest in Madagascar,” Time.com, (February 8, 2013), http://world.time.com/2013/02/08/the-white-stuff-mining-giant-rio-tinto-unearths-unrest-in-madagascar/ (accessed March 25, 2015).
20 “The unplumbed riches of the deep: and why they’ll wait a while longer before being disturbed,” The Economist, (May 14, 2009) http://www.economist.com/node/13649273 (accessed August ‎27, ‎2014).
21 “Seven new exploration licences for deep sea mining,” im-mining.com (July 25, 2014), http://im-mining.com/2014/07/25/seven-new-exploration-licenses-for-deep-sea-mining/ (accessed March 30, 2014).

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