MARIBEbook04 Chapter 03

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Seabed Mining
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3
Seabed Mining
Marcel J. C. Rozemeijer1,* , Sander W. K. van den Burg1 ,

Robbert Jak1 , Laura E. Lallier2 and Karel van Craenenbroeck3
1 WUR, Droevendaalsesteeg 4, 6708 PB Wageningen,
the Netherlands
2 eCOAST, Esplanadestraat 1, 8400 Ostend; Maritime Institute,
Faculty of Law, University of Ghent, Universiteitstraat 4,

9000 Ghent, Belgium
3 GeoMarEx – Geological Marine Exploration – Luchterenstraat –
9031 Ghent, Belgium

∗ Corresponding Author
3.1 Introduction
3.1.1 Challenges for Offshore Mining
The surface of the planet is approximately 71% of water spread over five
oceans: the Arctic, Atlantic, Indian, Pacific and Southern ocean. In fact, it
represents the largest habitat for life on Earth1 . The deep ocean beyond the
continental shelf is the most difficult to access but also very promising in
available resources, like biodiversity and ores. These includes minerals like
gold, silver, nickel, cobalt, Rare Earth Elements (REEs), phosphorytes and
gas hydrates (Scott et al., 2008; SPC 2013a, b, c, d; SPC 2016; EPRS, 2015;
Rogers et al., 2015; Petersen et al., 2016).
Ores are currently being mined in coastal waters. Sand and gravel are
already in exploitation e.g. for use in coastal defence and use for infrastruc-
tural works such as roads and the production of concrete. Metal ore sands
and precious stones such as tin in Indonesia, gold in Alaska, or diamonds in
1
This diverse habitat is largely unknown. Biodiversity, general ecology, natural dynamics,
responses to natural and human drivers are hardly studied.
73
74 Seabed Mining
Namibia are exploited as well (Cronan, 2000; Baker et al., 2017; Hannington
et al., 2017).
Due to the nature of the deep ocean (the immense pressure, the hard to
reach bottom, the lack of data and the offshore character), the exploration
and especially the exploitation of the resources on the seabed pose immense
technical and environmental challenges. The initial euphoria of the 1970s was
generated by high prices combined with relatively easy access to minerals
available at that time. Then a collapse in world metal prices and new land-
based mines dampened interest in seabed mining. However, after decades ‘on
hold’, there is renewed interest in the potential for commercial exploitation
of marine minerals from the private sector and governments alike (SPC
2013a, b, c, d; Ecorys, 2014; Lange et al., 2014; Arezki et al., 2015; Rogers
et al., 2015; Worldbank, 2016).
Deep seabed mining (as a sector) must therefore be considered a sig-
nificant new and emerging use of the global ocean. It was included in the
project of MARIBE as a form of Blue Growth. To completely understand
its functioning and promote the development of seabed mining, this chapter
aims to provide an extensive overview of the social and economic drivers that
influence the performance of the industry (including industry lifecycle and
structure, socio-economic impact and regulatory framework, among others).
The purpose is that investors, governments, operators and other interested
stakeholders generate insights for future developments.
Numerous reports already exist on the analysis of the metallurgic ores
that are found subsea (e.g. SPC, 2013a, b, c, d; SPC 2016; Ecorys, 2014).
This study therefore aims at adding to this discussion by comparing met-
allurgic ores with the other major deep seabed resources phosphorites and
gas hydrates. Comparing the subsectors could yield additional insight and
information.
The considered subsectors face more or less similar challenges and tech-
nical demands. The challenges for a viable offshore mining industry are to
deliver products at competitive prices given a volatile market, high costs, low
levels of development, and anticipated major environmental impacts. A major
discussion point is to tackle an investment gap; is development of small-scale
innovations by adapting existing vessels and gear sufficient or are thorough
innovations needed?
3.1.2 Definitions and Demarcation

Major issues for mining of marine resources are depth and distance. The
general rule of thumb is the further away the deeper. And the deeper one
has to mine, the more complex the techniques. Some geological and practical
3.1 Introduction 75
definitions are introduced here as a general setting and to support the

definitions used.
• Limits of conventional dredging: the depth of –150 m is the theoretical
limit where the conventional dredging equipment like trailing suction
hopper dredgers (TSHDs) can still be used without major accommoda-
tion (‘business as usual’). In practice this depth appears to be –80 m.
Below that –80 m, a degree of innovation of the equipment is needed
or excessive amounts of energy need to be applied making the deeper
dredging a new business case. From –80 m till –200 m adapted regular
exploitation vessels can be used. E.g. in the diamond mining industry
the type of underground determines whether conventional techniques
(vertical mining with a rigid large diameter drill) or Remotely Operated
Vehicles (ROVs, horizontal mining) are used (Scott et al., 20082 ).
• An important limit is that of the continental shelf towards approx.
–200 m depth (SPC, 2013d; Rogers et al., 2015). Beyond that the depth
strongly increases from the continental slope to the abyssal plains at
approx. 4000 m and deeper: the deep sea.
• Potential of river deposits: The sea-level fluctuations due to ice ages
are normally till –130 m (±10 m; Liu et al., 2004; Cronan, 2000).
In general riverine deposits are measured and exploited till that depth
(Cronan, 2000). However, in southern Africa beach planes and riverine
deposits (like sand, diamonds and ore sands) can be found till at least
–500 m due to tectonic movements, lowering erosion ridges and former
beach planes to deeper regions. Possibly similar tectonic movements can
also be valid for Australia (Siesser & Dingle 1981; Gurney et al., 1991;
Cronan, 2000).
A distinction can be made between nearshore mining and offshore mining.
The words offshore and nearshore represent the distance component and
illustrate the differences between the business cases we describe. Taking these
limits and the aspects of depth and distance we define:
Nearshore mining, ranging from –0 till –200 m still on the continental shell
as a measure for both distance and a markedly chance in geology (from plane
to abyss). Typically riverine deposits can be found here.
Offshore mining starts from –200 m downwards. Till –500 m exploitations

could still be profitable with adaptation of existing ships and technologies,
2
https://www.debeersgroup.com/en/explore-de-beers/mining.html (d.d. 03-11-2015).
76 Seabed Mining
which implies low investment costs, and high exploitation costs with lower
economic revenues (using e.g. TSHD with a flexible trailing head and an
extended (and partially flexible) suction tube to dredge the nodules. Schulte,
20133 ). From –500 m and deeper more adaptions seem to be required.
The seabed offers a variety of resources like i) polymetallic manganese
nodules (nodules), ii) polymetallic seafloor massive sulphide (SMS) deposits,
iii) polymetallic cobalt crusts (cobalt crusts), iv) phosphorites, polyphos-
phates and phosphate sands, v) gas hydrates, vi) metal ore sands, vii) sand
and gravel, viii) precious stones ix) shells x) other chemicals (Baker et al.,
2017). Offshore mining encompass an elaborate scale of potential resources,
which differ from location to location. Some demarcation is necessary to limit
the scope of this study, as given in the following sections. The sector needs to
be a new developing business (Blue Growth), and not an established business
(Blue Economy). To limit the vast field of ores the following resources are
studied (defined as subsectors):
1. Nodules, SMS deposits and cobalt crusts because of their potential and
the fact that they are part of a developing economy (SPC, 2013a, b, c, d;
Ecorys 2014; Lange et al., 2014).
2. Phosphorites and polyphosphate sands are also an upcoming mineral and
a developing economy (USGS, 2017 and e.g.3 ).
3. Gas hydrates are considered interesting because the reserves are esti-
mated to exceed known petroleum reserves and governments are highly
interested for geopolitical reasons (Lange et al., 2014).
3.2 Market – Investigating Market Trends

In this section market trends are described for the different subsectors. As
dealt with in Section 3.3.2, the number of exploration licences issued by the
International Seabed Authority (ISA)4 or individual countries within their
Exclusive Economic Zone (EEZ) is limited5 . The number of licenses for
exploitation is even scarcer, if any. Despite the low number of licenses, the
claimed surfaces for exploration are rather large. Offshore mining demands
high technological development and high capital expenditures (CAPEX)
and operating expenses (OPEX) costs making it high-risk for commercial
exploitation (see Section 3.3). On the other hand there is a general feeling that
3
http://www.rockphosphate.co.nz/ (d.d. 16-07-2017).
4
Responsible for the international area of the deep seabed (the Area).
5
https://www.isa.org.jm/deep-seabed-minerals-contractors (d.d. 13-07-2017).
3.2 Market – Investigating Market Trends 77
despite all the draw backs on the economic and commercial domain, offshore
mining could be important in the future. Main pulling factors are cobalt and
REEs supply, excessive environmental impacts of land mining (Section 3.4)
and local needs and interests of countries lacking independent reserves or
other means of income such as the Pacific States for metals (SPC, 2013d;
Worldbank, 2016), Japan and Korea for gas (Lange et al., 2014).
Also having and demonstrating a leading position in dredging technology
and abilities could be a driving force to be first (EPRS, 2015; Worldbank,
2016).
The challenge is to find those spots where concentrations and availabili-
ties of ores are high enough to have commercially viable exploitation despite
the low TRLs and resulting high costs of equipment and techniques. This
results in a strong competition for suitable concessions.
Phosphorites can now be produced at normal market prices and are
thereby in competition with the land-based producers (Schilling et al., 2013).
When the distances are far between consumers and land-based operators,
local nearshore production is especially interesting (Don Diego, 2015). Gas
Hydrates are not yet commercially produced.
3.2.1 Market Trends, Product Demand, Prices

This section and its subsections give the general trends and interpretation of
the different resources.
3.2.1.1 Metals
Table 3.1 presents an overview of metal resources and reserves on land for
crusts and nodules and an example of SMS type deposits. Also the estimated
yearly world production is given in absolute figures and as a percentage
of the currently economically minable deposits today on land. The yearly
production is ranging between 0.005 and ∼6% of the currently economically
minable deposits on land. The three bulk metals manganese, copper and
nickel consume yearly ∼3% of the reserves (meaning enough reserves for
>30 years for most resources, not taking into account the sub-economic
deposits on land (Table 3.1). In a global observation, the economic minable
reserves are around 30 years for all metals. Thirty years is the normal financial
horizon used by banks and other financial institutions. Mining companies will
be reluctant to invest more in exploration beyond a 30-year stock/reserves
(Arndt et al., 2017). Hence, based on Table 3.1 and Arndt et al. (2017),
the economically minable reserves can be expected to be much larger than
a 30-year stock.
Table 3.1 Metal resources and reserves on land and seabed for crusts and nodules (millions of tonnes) and an example of sulphide type
deposits (data from Hein et al., 2013; Lange et al., 2014 unless stated differently). Also estimated amount of SMS deposits are given without
78 Seabed Mining
Atlantis II and the estimates from Sulphide rich sediments Atlantis II separately
Global Reserves Estimated Yearly
and Resources Estimated Worldwide
Global Reserves on Land Manganese Amount of Estimated Production in 2016 as
on Land (Economically Nodules in SMS Atlantis II Yearly a Percentage of the
Cobalt Crusts in (Economically Minable as Well the Clarion- Deposits Sulphide Worldwide Economically
Location the Prime Crust Minable as Sub Economic Clipperton without Rich Production Minable Deposits
Elements Zone (PCZ) Deposits Today) Deposits) Zone Atlantis IId Sedimentse in 2016f Today on Land
Manganese 1714 630 5200 5992 3.8–4.3 16.0 2.5
(Mn)
Copper (Cu) 7.4 690 1000+ 226 10 0.74–0.81 19.4 2.8
Titanium (Ti) 88 414 899 67
Rare earth 16 110 150 15
oxides
Nickel (Ni) 32 78f 130f 274 2.3 0.3
Vanadium (V) 4.8 19f 38 9.4 0.076 0.04
Molybdenum 3.5 10 19 12 0.0002 0.002
(Mo)
Lithium (Li) 0.02 13 14 2.8
Cobalt (Co) 50 7f 13 44 0.0053 0.123 0.16
Tungsten (W) 0.67 3.1 6.3 1.3
Niobium (Nb) 0.4 4.3f 4.3f 0.46 0.064 1.5
Arsenic (As) 2.9 1 1.6 1.4 0.0365 3.7
Thorium (Th) 0.09 1.2 1.2 0.32
Bismuth (Bi) 0.32 0.3 0.7 0.18
Yttrium (Y) 1.7 0.5 0.5 2 0.005–0.007 1–1.4
Platinum 0.004 0.07 0.08 0.003
group
Tellurium (Te) 0.45 0.025f 0.05 0.08 >0.000108 >0.4
Thallium (Tl) 1.2 0.0004 0.0007 4.2
Gold (Au) 0.05–0.057a,b,c,f 0.1157c 0.000095 0.00102 0.000046 0.0031 5.4–6.2
Silver (Ag) 0.57f 0.0036 0.069 0.0065 0.027 4.7
Zinc (Zn) 220–230b,f 1900b,f 13 20d 3–3.8 0.012 0.005
a Estimate based on booked reserves in mining companies http://www.bullionmark.com.au/how-much-gold-is-there (d.d. 09-09-2015).
b USGS (2015).
c http://www.visualcapitalist.com/global-gold-mine-and-deposit-rankings-2013/ (d.d. 09-09-2015).
d Hannington et al. (2010, 2011): estimated total 600 millions of tonnes. In Hannington et al. (2011) copper and zinc are presented summed together
30 millions of tonnes. Based on Hannington et al. (2010) a simplified 1:2 Cu: ZN ratio is presented here.
e Bertram et al. (2011); Lange et al. (2014); Laurila et al. (2015).
f USGS (2017).
3.2 Market – Investigating Market Trends
79
80 Seabed Mining
In general land-based mining is an inflexible economy. The investments

in and cost structure of the mining infrastructure is so huge that they cannot
flexibly react to market developments. This results in typical fluctuations
between a state of oversupply and supply shortage. In Figure 3.1 an example
is given of the price developments of the resources, showing largely stable
prices with a peak in prices in the 1970’s and another peak starting from
approximately 2005 and going down after 2011. For the recent past, three
trends can be distinguished:
1. An increase in demand of metals since the early 2000’s due to economic
development raising prices. Economic development of Brazil, Russia,
India and China (the BRIC countries) has led to a higher demand. China
is particularly consuming more and more metals. In addition, techno-
logical development (smartphones etc.) has increased the demand for
special metals like cobalt and rare earth elements (REEs) (Worldbank,
2012 and 2016; SPC, 2013d; Ecorys, 2014; Arezki et al., 2015).
2. The financial crises in 2008, which started with the bursting of the
United States housing bubble in 2004–2006 (Tully, 2006; Worldbank,
2012) and that lead to both raising and lowering of prices.
3. A decrease in the quality of ores by the end of the 1990, early 2000’s
leading to higher prices (Worldbank, 2012; Mudd et al., 2013; SPC,
2013d).
3.2.1.2 Phosphorite
The same patterns in price development and demand that occur for metal
ores occur for phosphorites as well. Prices remained stable around e30 to
e50 per metric tonne from 2000 till 2007 (Figure 3.1). Around the time
of the financial crises, prices rose sharply to almost e300 per metric tonne
and then descended till a fluctuation plateau of e70 to e150 per metric
tonne. In 2007–2008, world agriculture increased due to growing world
population and associated food demand, leading to a strong rise in demand
for phosphate-derived fertilizers. Currently economically minable deposits on
land are 68,000 Million metric tons with a yearly consumption of 261 Million
metric (0.4%). 74% of this reserve is located in Morocco and Western Sahara.
Large phosphate resources have been identified on the continental shelves
and on seamounts in the Atlantic Ocean and the Pacific Ocean. Total world
resources of phosphate rock are more than 300 billion tons. There are no
imminent shortages of phosphate rock (USGS, 2017).
Increasing concerns on both the supply market being dominated by a
few suppliers (especially Morocco) which seems to become more extreme
Figure 3.1 (A) Long term development of nickel https://theconversation.com/queensland-

nickels-demise-yabulu-a-relic-refinery-53368, (d.d. 10-02-2017). (B) Price development of
minerals, corrected for inflation, in Euro per ton till October 2012 (Schulte, 2012).
82 Seabed Mining
in the future and a need for phosphate rock with a lower cadmium content
(de Ridder et al., 2012), urge for new supply source where offshore mining
can offer options. Also the exploitation of local phosphorites can mean local
employment and export potential for the region and even reduce the carbon
footprint.
3.2.1.3 Natural gas

The price developments of gas depend on location (Figure 3.2) (BP, 2016).
In the US, which is self-sufficient in gas-supplies, prices remained relatively
stable (around $ 5 for a million British Thermal Units (mmBTU) except in
the period of the financial crises. In Europe and Japan prices tend to be higher
around $ 7–$ 10 for a mmBTU (probably reflecting the dependency of the
import) (ECB, 2014).
The prices of natural gas depend on many factors, including macroeco-
nomic growth rates and expected rates of resource recovery from natural gas
wells. Natural gas prices, as with other commodity prices, are mainly driven
by supply and demand fundamentals. However, natural gas prices may also
be linked to the price of crude oil and/or petroleum products, especially in
continental Europe. Higher rates of economic growth lead to increased con-
sumption of natural gas, primarily due to gas usage in housing, commercial
Figure 3.2 A long term overview of the price of natural gas (mostly methane) in $ per
million British Thermal Units (mmBTU) for different regions in the world (BP, 2016).
floor space, and industrial output. Also an event like the earthquake in Japan
leading to less nuclear energy and trust in nuclear energy can be noted in an
international context. Weather conditions can also have a major impact on
natural gas demand and supply. Cold temperatures in the winter increase the
demand for space heating with natural gas.
3.2.1.4 A general model

De Ridder et al. (2012) developed mathematical models to explain the price
development for phosphorites, which seem quite suitable for metals as well.
In general ore production was insufficient, causing greater derived demand
for ore. Meanwhile, supply tightened (ore degradation), with production
and transport costs going up. This resulted in a higher price. Eventually,
higher prices made more exploration and recycling activities economically
feasible. It therefore became possible to restore supply. As demand remained
stronger than before, new prices reached a slightly higher level than originally
(de Ridder et al., 2012).
3.2.2 A View of Future Supply and Demand

3.2.2.1 Metals
The previous section described price developments and the drivers on sup-
ply and demand. It emphasized the demand by economic developments
and the influence of price. Despite steadily increasing demand, the onshore
deposits will in most cases continue to satisfy our growing appetite for metals
and minerals (SPC, 2013d; Lange et al., 2014; Ecorys, 2014) (Figure 3.1,
Table 3.1). Indeed, with an increasing political stability worldwide new land-
based reserves are discovered in emerging market and developing economies
(Table 3.1) (Figure 3.3, Arezki et al., 2015). Section 3.6 performs a sensitivity
analysis for global prices and revenues. The analysis concludes that global
metal prices are currently low, making offshore mining of metal ores unlikely
in the short term. Metal prices will need to rise substantially before making
offshore mining commercially viable.
On the long run the combination of increased absolute and relative
demand combined with geopolitical issues can limit the availability of some
metal resources. New technological developments demand more and more of
special metals and REEs. A lot of these resources for new technology are
situated in a few countries only, often with a political instable climate making
it a geopolitical issue of availability. Geopolitical issues can make offshore
mining an interesting option despite the high costs. Examples of components
of geopolitical concern are the supply of cobalt (dominated by the Democratic
84 Seabed Mining
Figure 3.3 Number of metal deposit discoveries by region and decade (Arezki et al., 2015).
Republic of Congo), phosphorites (Morocco), as well as gas hydrates (Hein

et al., 2013; de Ridder et al., 2012; Lange et al., 2014; USGS, 2015 and 2017).
In addition, environmental concerns on land-based mining could turn the
table towards seabed mining (Section 3.4). Currently, China is considered the
only supplier of REEs. However, numerous large reserves have been discov-
ered and are available in Australia (Mount Weld), Greenland (Kvanefjeld),
Chili, Bolivia (Uyuni Salt Flats), and Afghanistan6 , as well as Brazil, India,
Russia and Vietnam (USGS, 2017). With fluctuating market prices these
mines open and close with profitability.
3.2.2.2 Phosphorites
With an increasing population, food production and phosphate demand will
increase. In addition a need has arisen for phosphate with less calcium
6
http://geology.com/usgs/ree-geology/, http://www.australianrareearths.com,
http://www.ggg.gl, https://www.masterresource.org/electric-vehicles/rare-earth-and-lithium-
supplies-cloud-renewables/, http://www.popsci.com/science/article/2010-06/us-
geologists-uncover-staggering-1-trillion-cache-unmined-mineral-resources-afghanistan,
(all d.d. 27-03-2017).
concentrations. World stocks can easily meet the demand on phosphate; the
calcium content is a different topic (USGS, 2017, De Ridder et al., 2012).
3.2.2.3 Gas hydrates

World consumption of gas is steadily increasing. Global proved natural gas
reserves in 2015 were estimated to be 186.9 trillion cubic metres, sufficient
to meet 52.8 years of current production (in most cases not taking shale
gas into account). Proven gas reserves were dominated by the Middle East
(43%). Also Russia holds large proven reserves (∼17%). Other countries
have substantial reserves. It appears that every ten years more proven reserves
are determined (BP, 2016). Reserve estimates change from year to year as
new discoveries are made, as existing fields are more thoroughly appraised,
as existing reserves are produced, and as prices and technologies evolve.
Sources also differ in actual estimates. It is estimated that there are about
900 trillion cubic metres of “unconventional” gas such as shale gas, of which
180 trillion cubic metres may be recoverable (another ∼50 years).
Recent estimates of worldwide amounts of gas hydrate, which attempt to
consider all of these aspects, are on the order of 5 to 15 times the land-based
reserves (Lange et al., 2014).
3.2.2.4 Potential influence of offshore mining ores

on global markets
The Ecorys study (2014) made some assumptions and calculations of the
potential influence of offshore mining ores on global markets. As mentioned
before, only a limited number of metals seem interesting and from those
copper, gold and silver are the targets for SMS deposits and copper, cobalt and
nickel for the crusts and nodules. The impact on the world market can only
be estimated with assumptions since there is no production at this moment.
Taking the target metals: for gold and silver a production by offshore
mining was estimated at ∼3% and ∼1% of the yearly terrestrial production
respectively (USGS, 2015; Ecorys, 2014). These volumes are very small. In
addition, metals like gold and silver are characterised by low production con-
centration and existing market exchanges, which however are only marginally
influenced by physical demand and supply. Therefore offshore mining is not
expected to have an influence on the price.
Currently, global annual production of copper is 18.7 million tonnes from
different sources (USGS, 2015). Looking into an initial reachable estimated
annual volume of 0.1 million tonnes of copper (∼0.5%) from a typical
offshore mining operation (Ecorys, 2014) it is unlikely to have a substantial
impact on global prices. The same is valid for nickel.
86 Seabed Mining
In the case of cobalt (8 thousand tonnes, Ecorys, 2014) the impact on

price may be more substantial as global annual production is around 112
thousand tonnes (USGS, 2015). An estimated annual output of ∼8% could
have an impact on market prices and price fluctuation, particularly in view of
cobalt’s supply risk due to geopolitical reasons. Congo (Kinshasa), a poten-
tially unstable country, has ∼50% of the world production. Any substantial
new source will influence the market. The same line could be valid for the
REEs as well (Ecorys, 2014; Worldbank, 2016).
Annually, 261 million tons of phosphate is produced. Namibia’s offshore
phosphorite mining aims at ±10% market share of the traded phosphate
market of 30 million tons a year7 . Taking into account the potential impact
of Don Diego (Mexico) and Chatham Rise (New Zealand) exploration, the
seabed mining of phosphorites can have a substantial impact on world prices.
For gas hydrates it can be expected that once in full operation it will have
a substantial impact on local and world prices (Lange et al., 2014).
3.3 Sector Industry Structure and Lifecycle

The polymetallic (manganese) nodules, cobalt crusts, SMS deposits, phos-
phorites and gas hydrates have different distributions over the world and in
depth. Moreover, different techniques are required to harvest them based on
depth and origin. This gives rise to distinct industries and sectors involved in
the development of offshore mining.
3.3.1 Worldwide Offshore Resource Distribution

Resources for offshore mining are spread all over the world in both the deeper
national waters and the international seas and oceans. The most interesting
sites for exploration are not found in European waters. Below, information is
presented on the presence of the considered deposits worldwide.
3.3.1.1 Nodules
Nodules occur widely on the vast, sediment-covered, plains of the abyssal
ocean at depths of about 4,000 to 6,500 m (Hein et al., 2013; SPC 2013b). The
greatest concentrations of metal-rich nodules occur in the Clarion-Clipperton
Zone (CCZ), which extends from off the west coast of Mexico to as far west
as Hawaii (map B, Figure 3.4). Nodules are also concentrated in the Peru
7
http://www.namphos.com/project/sandpiper.html (d.d. 16-07-2017).
3.3 Sector Industry Structure and Lifecycle 87
Figure 3.4 (A) Locations of areas within the abyssal plains that are important for man-
ganese nodule formations based on seafloor classification, seafloor age (older than 10
My), sediment thickness (<1000 m), sedimentation rate (<1 cm/1000 years), and water
depth (between 3000 and 6000 m). Note the lack of data below 70◦ S and above 80◦ N.
(B) Areas with highest Mn-nodule potential based on seafloor morphology, age of crusts, and
metal input. Light blue areas delineate the EEZ. Abbreviations: CCZ = Clarion-Clipperton
Zone, PB = Peru Basin, PEN = Penrhyn Basin. (C) Location of manganese nodule samples in
the ISA database with Co concentrations above 0.5 wt% (N = 211). Note the large number of
Co-rich samples in the EEZ of the Cook Islands. (Petersen et al., 2016).
88 Seabed Mining
Basin, near the Cook Islands, and at abyssal depths in the Indian and Atlantic
oceans (Hein et al., 2013 and 2015). In the CCZ, the manganese nodules lie
on abyssal sediments covering an area of at least 9 million square kilometres
(Figure 3.4).
No relevant concentrations of polymetallic (manganese) nodules have
been found in basins within the scope of the MARIBE project (Atlantic,
Baltic/North Sea, Mediterranean, and Caribbean). However, some spots with
substantial amounts of nodules were discovered recently in the tropical
Atlantic (north of French Guyana and west of Africa (Devey, 20158 ). These
findings await publications or reports that putting them into perspective. In
addition in the Galicia Bank region (northwest Iberian margin, NE Atlantic),
a complete suite of mineral deposit types was encountered including
(1) phosphorite slabs and nodules, (2) Fe-Mn crusts and strata bound deposits,
(3) Co-rich Mn nodules, and (4) Fe-rich nodules. The Galicia Bank nod-
ules are exceptionally rich in cobalt (Gonzalez et al., 2016). Quantities for
commercial exploitation need to be assessed.
3.3.1.2 SMS deposits

SMS deposits are rich in copper, iron, zinc, silver and gold. The total
accumulation of sulphides is estimated to be on the order of 600 millions
of tonnes (Hannington et al., 2010 and 2011). As compared to nodules and
terrestrial reserves the amounts deposited in SMS are far less (Table 3.1,
Figure 3.5), although the amount of precious metals is substantial. Gold and
silver, together with copper, appear to be the commercially most interesting
metals (Boschen et al., 2013, Ecorys, 2014).
Deposits are found at tectonic plate boundaries along the mid-ocean
ridges, back-arc ridges and active volcanic arcs, typically at water depths of
around 2,000 m for mid-ocean ridges (Figure 3.5). These deposits formed
over thousands of years through hydrothermal activity, which is when metals
precipitate from water discharged from the Earth’s crust through hot springs
at temperatures of up to 400◦ C. Because of the black plumes formed by the
activity, these hydrothermal vents are often referred to as ‘black smokers’.
SMS deposits can potentially be found in the Mediterranean, near the
Azores (Marques & Scott 2011; Lange et al., 2014; Ortega, 2014) and in
Norwegian waters at the Mid Atlantic Ridge. Future exploration is needed to
get more indication of their values.
8
http://www.geomar.de/en/news/article/tiefseetiere-gesucht-manganknollen-gefunden/
(d.d. 15-07-2017).
Figure 3.5 (A) Locations of mid-ocean ridges and back-arc spreading centres impor-
tant for the formation of seafloor massive sulphides. Colours denote the spreading rate of
each segment. Dark blue = ultra-slow spreading <20 mm/yr); light blue = slow spreading
(20–40 mm/yr); green = intermediate spreading (40–60 mm/yr); orange = 1/4 fast spreading
(60–140 mm/yr); red = ultra-fast spreading (>140 mm/yr). (B) Location of high-temperature
seafloor hydrothermal systems and associated seafloor mineralization, where red colour
indicates occurrences with economically interesting metal concentrations (average grade of
the deposit is either 45 wt% Cu, 415 wt% Zn, or 45 ppm Au) and large symbols indicate
occurrences with size estimates above 1 million tonnes. Using these criteria, only a few
occurrences of economic interest have been identified. Note that geochemical analyses are
commonly only available for surface samples that are not representative for the entire occur-
rence. A quantitative resource assessment for seafloor massive sulphides is only available for
two occurrences (Solwara 1 and Solwara 12, both within the EEZ of Papua New Guinea).
Light blue areas delineate the EEZ. (Petersen et al., 2016).
90 Seabed Mining
3.3.1.3 Cobalt crusts

Cobalt crusts accumulate at water depths of between 400 and 7,000 m on
the flanks and tops of seamounts. They are formed through precipitation of
minerals from seawater. The crusts contain iron, manganese, nickel, cobalt,
copper and various rare metals, including rare earth elements (Table 3.1).
They vary in thickness from <1 to 260 mm and are generally thicker on older
seamounts. Because cobalt crusts are firmly attached to the rocky substrate,
they cannot simply be collected on the bottom like manganese nodules. They
will have to be laboriously separated and removed from the underlying rocks.
(Hein et al., 2013; Lange et al., 2014; Petersen et al., 2016).
Globally, it is estimated that there may be as many as 100,000 seamounts
higher than 1,000 m, although relatively few of these will be prospective for
cobalt crust extraction. As compared to the terrestrial reserves, cobalt crusts
represent a substantial portion. The commercially most important metals
seem to be copper, cobalt and nickel (Table 3.1) (Ecorys, 2014).
The world’s oldest seamounts are found in the western Pacific. Accord-
ingly, many metallic compounds were deposited here over a long period of
time to form comparatively thick crusts. This area, around 3000 kilometres
southwest of Japan, is called the Prime Crust Zone (PCZ) (Figure 3.6) (Hein
et al., 2013; SPC, 2013b; Petersen et al., 2016).
For Europe some potentially commercially exploitable crusts can be
found on seamounts near Madeira, the Canary and Azores islands, the Galicia
Bank, Iberian margin and one sample from the western Mediterranean Sea
(between –750 to –4,600 m). The resource potential of Fe-Mn crusts within
and adjacent to the Portuguese EEZ is evaluated to be comparable to that of
crusts in the central Pacific, indicating that these Atlantic deposits may be
an important future resource (Muiños et al., 2013; Conceição et al., 2014;
Gonzalez et al., 2016). The resources at the Galicia Bank, Iberian margin
need to be evaluated in a commercial perspective. They are not as enriched
in cobalt as the nodules from the Galicia Bank (Gonzalez et al., 2016; Hein
et al., 2013).
3.3.1.4 Phosphorites
Phosphates are found in areas of oceanic upwelling and riverine deposits.
They are most commonly formed off the western margin of continents and
on plateaus (zones of upwelling, Figure 3.7). In this sense they are the
result of marine and oceanographic processes and not (direct) land run off
and deposits. Europe has some deposits at the continental shelf of Portugal
Figure 3.6 (A) Locations of seamounts, guyots, and oceanic plateaus that are important
for the formation of ferromanganese crust based on seafloor classification, seafloor age (older
than 10 My), sediment thickness (<500 m), sedimentation rate (<2 cm/1000 years), and water
depth (peaks between 800 and 3000 m). Note the lack of data below 70◦ S and above 80◦ N.
See text for details. (B) Area with highest ferromanganese crust potential based on morphol-
ogy, age of the crust, and metal input. Light blue areas delineate the EEZ. Abbreviations:
PCZ = Prime Crust Zone. (C) Location of ferromanganese crust samples from the ISA
database with Co-concentrations above 0.5 wt% (N = 465). Note that most Co-rich
ferromanganese crust samples lie in the western Pacific (Petersen et al., 2016).
92 Seabed Mining
Figure 3.7 The presence of Phosphorites and other resources according to the status in 2008.
Dots: continental shelves; triangles: seamounts.
Source: Thiel et al., 1998.
(measured ∼–400 m till ∼–2000 m Gaspar, 1982) and Spain (Galicia Bank,
measured ∼–750 m till ∼–1900 m) (Gonzalez et al., 2016).
3.3.1.5 Gas hydrates

Methane is formed by the metabolisation and decomposition of dead biolog-
ical material by anaerobic bacteria or by chemical decomposition by earth
heat starting from –300 m to –3000 m. When gas molecules are trapped in a
lattice of water molecules at temperatures above 0◦ C and pressures above one
atmosphere, they can form a stable solid. These solids are gas hydrates which
are trapped in the pore of the sediments (Boswell & Collett, 2011; Lange
et al., 2014).
Methane hydrates develop in permafrost regions on land or beneath the
seafloor. They are usually covered by a layer of sediments. Their formation
under the seafloor requires an environment of sufficiently high pressure and
low temperature. Thus, in the Arctic, methane hydrates can be found below
water depths of around 300 metres, while in the tropics they can only occur
below 600 metres. Most methane hydrate occurrences worldwide lie at water
Figure 3.8 The occurrence of biogenic gas hydrates. Gas hydrate forms when methane
and water combine at pressure and temperature conditions that are common in the marine
sediments of continental margins and below about –200 m. The figure only shows biogenic
gas hydrates. The amounts of thermogenic methane are not taken into account (Fig. from
Lange et al., 2014).
depths between 500 and 3000 metres at the continental margins. According
to current estimates the largest deposits are located off Peru and the Arabian
Peninsula (Lange et al., 2014; Figure 3.8).
3.3.2 Centres of Offshore Activity

3.3.2.1 International areas
To date (20-07-2017), a number of contracts signed with the ISA for the
exploration for mineral deposits are currently into force: 17 for polymetallic
nodules, 6 for polymetallic sulphides, 4 for cobalt-rich crusts (Figure 3.9)5 .
Three States have notified the ISA of their prospecting activities (Fiji, Tuvalu,
Samoa). There is no application or contract for exploitation of minerals as of
yet in international areas.
3.3.2.2 National areas

Metallurgic deposits
In relation to metallurgic deposits, Nautilus Minerals Inc. holds a license
for exploration and exploitation of SMS deposits at the Solwara site in
94 Seabed Mining
Figure 3.9 Locations of global exploration licenses for manganese nodules (N), Co-rich
ferromanganese crusts (C) and seafloor massive sulfides (S) for licenses within “the Area”,
orange for licenses within EEZs. The locations of the only two seabed mining licenses
(Atlantis II Deep in the Red Sea and Solwara 1 in Papua New Guinea) are indicated by the
white squares. The location of the protected “Areas of Particular Environmental Interest” (size
of 400 km by 400 km each) in the CCZ is provided as rectangles with a green outline (Petersen
et al., 2016).
Papua New Guinea. For mining the Atlantis II Deep in the central Red
Sea, positioned in the common EEZ of the Kingdom of Saudi Arabia and
the Democratic Republic of the Sudan, the Diamond Fields Ltd. of Canada
and Manafa of Saudi Arabia consortium has received a 30-year license
for exploration and exploitation (Thiel et al., 2013; Petersen et al., 2016,
Figure 3.99 ).
Neptune Minerals10 , a company registered in the USA, is also conducting
exploration for SMS since 2005. The company holds (or has held) prospect-
ing and exploration licenses in Japan, Papua New Guinea, Solomon Islands,
Vanuatu, Fiji, Tonga and New Zealand.
9
http://www.diamondfields.com/s/AtlantisII.asp (d.d. 20-07-2017). Atlantis II Deep con-
tains hot brines with metallurgic content. The upper 10 metres of sediment in the Atlantis II
Deep at ∼2200 m, contains economically highly valuable metal deposits.
10
http://www.neptuneminerals.com/ (d.d. 20-07-2017).
Phosphorites
There is no phosphorite nor gas hydrates exploration going on in international
areas. Currently three regions are in various stages of exploitation: phosphate
rich sands in Namibia (–180 m to –300 m, two companies), nodules in
Chatham Rise (–250 to –450 m, New Zealand), and phosphate rich sands in
the Don Diego deposit (–50 m to –90 m, offshore Baja California, Mexico).
They are all currently on temporary hold due to environmental considerations.
Environmental impact estimates are questioned by stakeholders fearing the
impacts of large-scale exploitation (Sharma, 2017).
Offshore deposits located off Florida and Georgia in the south-eastern
U.S. have been drilled, fairly well characterized and seem promising for
exploitation (Scott et al., 2008).
Gas hydrates
Japan and South Korea are at the cutting edge of the exploration and exploita-
tion of gas hydrates. In the coming years these two countries will carry out
additional production tests on the seafloor. Significant efforts are also being
undertaken in Taiwan, China, India, Vietnam and New Zealand to develop
domestic gas hydrate reserves in the seafloor. A major technical barrier is
the development of methods best suited for production. For this reason large
amounts of money continue to be spent on research. To date, close to 1 billion
US dollars have been invested in gas hydrate research worldwide. The first
resource-grade gas hydrates in marine sands were discovered in the Nankai
Trough area off Japan in 1999. In 2013, methane was produced there for
the first time from a test well in the sea (Lange et al., 2014). This resource
exploitation is still in an experimental phase.
3.3.3 Ownership
In general most of the exploitation of offshore metallurgic and gas resources
is in the hands of governmental related companies5 . Commercially exploit-
able, high grade phosphorites concessions seem more in the hands of private
investors combined with national authorities, as further explained below.
3.3.3.1 Governmental companies

In most of the projects in international waters, the main contractors are
governments (Korea, Russian Federation, India) or companies sponsored and
funded directly or indirectly by governments through public funding. It is the
case, for example, of KIOST (Korea), COMRA (China), JOGMEC102 and
96 Seabed Mining
DORD (both Japan) and the Federal Institute for Geosciences and Natural
Resources (BGR, Germany)5 . In the case of nodules, out of 16 contractors,
nine are directly or indirectly government related, three operators and a
science institute with potentially a strategic interest; only 3 private investors
are involved.
Depending on the country, governmental institutes perform a more sup-
porting task for a ministry (the final contract holder with ISA), or manages the
contracts with ISA itself. The distinction is the relationship of the contractor
with the governmental department, as well as the degree of (in)dependency.
3.3.3.2 Private companies

Private companies are encountered at two levels: operation and investment.
Typically in metals most private companies provide services in the value
chain (Figure 3.10). In the case of profitable phosphorites, private companies
are investors as well.
The value chain of mining operations includes exploration and resource
assessment, mining and extraction as well as processing (smelters) and dis-
tribution (Figure 3.10). The tendency for large aggregations is typical of
more mature land-based mining rather than seabed mining (Ecorys, 2014).
In offshore mining, smaller companies (as compared to the broader mining
industry) can conduct exploration activities. However, specialised companies
like Fugro and GSR (exploration) are bought by larger dredging firms like
Boskalis and DEME, demonstrating vertical integration and the aggregation
tendencies of maturing industries.
Figure 3.10 Value chain phases and activities of offshore mining (Ecorys, 2014).
The companies can be owned or are supported by investments of three

groups of investors:
1. Large mining firms acting as investors (e.g Nautilus).
2. Large generalist investors (like Levi Levine and Namibia Marine
Phosphate (NMP) for phosphorites).
3. Dredging companies and offshore construction companies.
3.3.4 Integration
Both vertical integration and horizontal integration takes place in the value
chain of nearshore and offshore mining. Integration of different types of
expertise also appear necessary to allow offshore mining to occur.
3.3.4.1 Vertical integration

A clear case of vertical integration is that of the Phosphorites mining compa-
nies in Namibia and Mexico. NMB and the Leviev group want to have their
own refinery factory to increase the ore grades to commercially interesting
grades (downstream) (Benkenstein, 2014). The Mexican Don Diego project
also foresees a form of local, on site, processing of the ore to a more refined
ore reduced in volume in order to reduce transport costs, e.g. a factory ship
that refines the raw ores working next to a TSHD.
3.3.4.2 Horizontal integration

Horizontal integration is shown in the fact that dredgers offer their service
to all kinds of marine resources: sand and gravel; phosphorites, metal ore
sands etc. Exploration companies like Odyssey explore the oceans of the
world locating valuable treasures and resources, archaeological sites and
shipwrecks. Bosch Rexroth designs materials for both offshore mining and
offshore oil and gas industry. Offshore knowledge, capacity and capability
is highly valuable and adapted for new purposes. The dredgers have rather
recently entered the offshore wind energy installation market. The key value
here is general offshore knowledge (Rozemeijer et al., 2015).
3.3.4.3 Highly specialised operators

Because offshore mining is located in open seas, it is by definition a capital-
intensive sector. All commercial activities on seas and oceans require high-
end knowledge, extensive experience and large investments. Offshore and
adapted nearshore mining represent an extremely demanding environment,
which has to deal with both the very harsh conditions and remoteness of
98 Seabed Mining
the open ocean and the extreme environment of the deep sea. In the role
of operators, only established companies with a long history of operation
can operate there, having developed a balanced view on investment, rev-
enues, logistics, innovation etc. (Ecorys, 2014; Lange et al., 2014; EPRS,
2015). These companies operate in an international, global setting. Europe
has some major players in the fields: renowned international dredgers and
offshore-installation producers.
3.3.4.4 Buying in knowledge and reducing risks

More often than not, major companies buy in extra technology or local market
knowledge of procedures with the local government and local stakeholders.
For Don Diego, Boskalis is investing in Odyssey Marine Explorations and
in a second Mexican company Dragamex, thereby getting access to knowl-
edge on exploration techniques as well as the local governance procedures
and stakeholders. Odyssey currently owns 54% of the outstanding shares
of its subsidiary, Oceanica Resources S. de. R.L. (Oceanica). Oceanica
itself owns Exploraciones Oceanicos, S. R.L. de CV, the Mexican operating
company with the mining concession containing the Don Diego phosphate
deposit. Next to buying in knowledge, it protects the mother company and
implies minimal investments for maximum influence (staged 54% majority
shareholding).
Similar combinations or networks of expertise also exist, e.g. around
Chatham rise Phosphorites projects. Odyssey Marine Exploration has minor-
ity ownership stakes in Chatham Rock Phosphate Ltd. Once more, Boskalis
is the operator for the Chatham rise concession. Odyssey Marine Exploration
also has minority ownership stakes in Neptune Minerals. They are all com-
panies controlling exclusive mineral licenses for areas believed to contain
high-value ocean floor mineral deposits.
Both Boskalis and DEME bought in exploration knowledge with the
smaller companies of respectively Fugro and GSR.
A network of interdependent investors and operators ensures the conser-
vation of investment and essential knowledge.
3.4 Working Environment

In this section, attention is given to the various factors impacting the lifetime
of a seabed mining project as well as the interactions of said project with the
surrounding environment in its widest sense. This includes the governance
3.4 Working Environment 99
and societal implications of project development, the employment aspects,

the economical context and ecological concerns.
3.4.1 Employment and Skills

Although the typical ores extracted through offshore mining are in general
not present within European waters, the interest of EU-based companies
in the sector is of primary importance. The relevant experience in specific
vessel design, construction and operations of extracting seafloor resources
are mostly of European origin and Europe-based until today. Indeed, it is the
European dredging and offshore construction industry – mainly concentrated
in the Netherlands, Belgium and the UK, which is particularly involved in
applying their knowledge and experience arising of nearshore dredging and
mining around the globe (Rozemeijer et al., 2015).
The long-term employment opportunities that should arise from offshore
mining are expected to be limited to a few hundred of high skilled positions
per project, which is relatively low when compared to the sectors of land-
based mining or recycling. This is explained by the need for technological
tools rather than workforce on board mining vessels, requiring expertise
from mainly crew, technicians, managers and other indirectly involved staff.
However, when looking at the entire value chain, treatment and processing
factories on land as well as commercial phases should open the door to a
greater need for labour supply. Even though, the EU offshore industry has
been qualified as marginal in terms of job creation by several studies (SRK
Consulting, 2010; EPRS, 2015).
Despite the low impact on employment, this type of activities also has the
potential to become an important driver for technological development and
innovation (EPRS, 2015; Worldbank, 2016). Universities, public-private part-
nerships in R&D, and EU funding programs like H202011 play a consequent
role in pushing and pulling this leading position in technology develop-
ment, engineering, and adjacent fields such as environmental optimization,
ecological impacts and sustainable governance.
Research on governance, policy and legal development is of particular
interest to future mining projects. Indeed, the assessment of their impact
on such projects, as well as the associated costs and liabilities, is rendered
challenging by the status of the legislation which is still, to date, under
development.
11
https://ec.europa.eu/programmes/horizon2020/en/draft-work-programmes-2016-17
(d.d. 13-07-2017).
100 Seabed Mining
3.4.2 Rules and Regulations

The deep seabed spreads both over areas within national jurisdiction (EEZ,
Continental shelf) and the Area. There are thus two different levels of
regulatory framework depending on the specific location of mining activities:
1. International law: Part XI of the United Nations Convention on the Law
of the Sea (LOSC, 1982), applicable to the Area and where the ISA
is responsible to administer and regulate mining activities through the
development of its Mining Code.
2. Domestic law: the legislation of the coastal State applicable to the seabed
within its national jurisdiction.
3.4.2.1 International law

The Area and its mineral resources are reserved for the Common Heritage of
Mankind, as provided in Part XI of the LOSC. The ISA is mandated by the
LOSC to adopt rules and regulations to ensure that prospecting, exploration
for and exploitation of minerals in the Area is conducted in accordance
with the economic and environmental principles set forth in the LOSC. To
this aim, the ISA has started drafting a Mining Code12 . Components of this
Mining Code on exploration have since then been adopted and implemented,
but the exploitation phase remains to be regulated. Since 2015, the ISA has
effectively begun the drafting process of exploitation regulations that will be
incorporated into the Mining Code13 . Their adoption is expected by 2018 or
2019. As it stands in its incompleteness, the current regime under which these
resources are administered may be described briefly as follows:
• While scientific research is largely free of restrictions, prospecting may
be conducted only after the ISA has received notification, accompanied
with a written undertaking that the proposed prospector will comply with
the LOSC and the ISA rules, regulations and procedures, and will accept
verification of compliance by the ISA. This solely implies requirements
on environmental and human safety considerations, and respect for other
activities taking place in international areas.
• Exploration and exploitation may only be carried out under a contract
with the ISA and are subject to its rules, regulations and procedures.
Contracts may be issued to both public and private mining enterprises
12
Available at (d.d. 13-07-2017): https://www.isa.org.jm/mining-code
13
Updates on the drafting process are available at (d.d. 13-07-2017): https://www.isa.org.jm/
legal-instruments/ongoing-development-regulations-exploitation-mineral-resources-area
provided that they are sponsored by a State Party to the LOSC (the Spon-
soring State) and meet certain standards of technological and financial
capacity. Although the contractual form allows for more flexibility than
permitting or licensing, which is the traditional mean of authorization
for land-based mining, most of the contract clauses are pre-set by the
Mining Code.
The ISA has also emphasized provisions relating to environmental protec-
tion and safeguards (Benkenstein, 2014), although the requirements for the
exploration phase are rather light. In March 2017, the Federal Institute for
Geosciences and Natural Resources (BGR) and the German Environment
Agency (UBA) held an expert workshop jointly organized with the ISA on
environmental standards for seabed mining. In the current context where the
ISA is still developing the Mining Code’s part on exploitation, international
experts participating in the workshop advocated for systematic environmental
protection in offshore seabed mining both at project and policy level14 .
Experts also recalled the compelling need for a comprehensive assessment
of both the chances and risks of future seabed mining, as well as the obli-
gation to apply a precautionary approach15 . Major, stricter and more detailed
requirements are hence expected with the coming regulations for exploitation.
Current requirements in the Mining Code for exploration include:
• Prevention, reduction and control of pollution and other hazards to the
marine environment, applying a precautionary approach. Ecosystem-
based management, monitoring and mitigating strategies, and more gen-
erally best environmental practices, even though part of the discussion
at policy level, remain to be set in further details and standards.
• Gathering of environmental baseline data against which to assess the
likely effects on the marine environment of a future seabed mining
project.
• Establishment of comprehensive programs for monitoring and evaluat-
ing environmental impact.
• Determining of ‘impact reference zones’ (areas that are sufficiently
representative to be used for assessment of impact on the marine
environment).
14
Workshop Towards an Environmental Management Strategy for the Area Berlin, 19
to 24 March 2017, the ISA Secretary-General’s opening statement (d.d. 13-07-2017):
https://www.isa.org.jm/sites/default/files/documents/EN/SG-Stats/remarks.pdf
15
http://www.umweltbundesamt.de/en/press/pressinformation/deep-sea-mining-germany-
lobbying-for-high (d.d. 13-07-2017).
102 Seabed Mining
• Determining of ‘preservation reference zones’ (areas in which no mining

shall occur to ensure representative and stable biota of the seabed in
order to assess any changes in marine biodiversity).
• Preparation of prior EIAs before any test mining such as large scale
extraction or equipment trials; small scale test mining is considered as
part of exploration activities and is hence included in the scope of an
exploration contract.
The role of the Sponsoring State is to guarantee that the contracting entity
will respect the ISA rules, regulations and procedures. In other words, the
sponsoring State ensures that the relevant rules of international law apply to
public and private entities that are not States. To achieve this, the Sponsoring
State has the obligation to adopt national measures, in the form of legally
binding instruments. The current state of legislation of EU states is summed
up in Table 3.2.
3.4.2.2 Domestic law

Within national jurisdiction, Coastal States are sovereign and can regulate
seabed mining occurring on their continental shelf. However, in doing so,
they also have to respect the international obligations deriving from global
and regional treaty law, including the standards set or to be set by the ISA.
While there are thus a variety of different legislations and approach already
in place, they tend to be derived from the same principles. For example, the
Secretariat of the Pacific Community has developed a framework based on
sound legal principles and practice to aid Pacific States in adopting their own
legislation16 , while ensuring a high level of requirements and harmonization
of the law in the region (Makgill & Linhares, 2015).
In addition, EU member states also have to abide by the relevant and
applicable regional conventions and EU law. Environmental rules and pro-
cedure in Europe are particularly developed and might add to the ISA
requirements, even though EU law is often a form of implementation of
international obligations. For instance, the EIA directive (85/337/EEC) and
the environmental liability directive (2004/35/EC) can be applied, as well as
the EU maritime safety directives and regulations aimed at ensuring safety
and environmental protection by EU flag states17 . An overview of the status
of EU states’ laws both within and beyond national jurisdiction is provided
in Table 3.2.
16
http://dsm.gsd.spc.int/public/files/2014/RLRF2014.pdf (d.d. 13-07-2017).
17
https://ec.europa.eu/transport/modes/maritime/safety/actions en (d.d. 13-07-2017).
Table 3.2 Oversight of the national legislation for offshore mining in Europe. CS: Continen-
tal Shelf
Area
State Legislation Adopted – Relevant Acts Draft In Force EEZ/CS
EU Sponsoring States
Belgium Belgian Act related to prospecting, X
exploration and exploitation of the
resources of the deep seafloor and subsoil
thereof beyond national jurisdiction (17th
August 2013)
Czech Act No. 158/2000 on Prospecting, X
Republic exploration for, and exploitation of mineral
resources from the seabed beyond limits of
national jurisdiction (18th May 2000)
France Mining Code of 20th January 2011 X
Ordinance No. 2016-1687 of 8 December X X
2016 relating to the maritime areas under
the sovereignty or jurisdiction of the
Republic of France
Germany Seabed Mining Act (6th June 1995, X
amended in 2010)
UK Deep Sea Mining Act 2014, amending X X
Deep Sea Mining (Temporary provisions)
Act 1981 (14th May 2014)
Other EU Member States – Not Sponsoring
Denmark Mining Code Act of 24th September 2009 X
Malta Malta Resources Authority Act nr XXV of X
2000; Continental Shelf Act of 8th August
2014
Netherlands Mining Act of 2002 X
Note verbale dated 26 March 2013 from the X
Permanent Mission of the Netherlands to
the United Nations.
Portugal Decree-Law on research and exploitation of X X
minerals, 15th March 1990 (on-going
amendment)
Spain Law on Mines of 21st July 1973 (last X
amendment 2014)
3.4.3 Societal Impacts and Concerns

Exploration and exploitation of offshore resources could also have serious
societal impacts, such as consequences for the livelihoods and well-being of
coastal communities in particular for nearshore mining projects. So far no
exploitation activities have taken place, which poses uncertainty with respect
to the actual impacts of offshore mining.
104 Seabed Mining
3.4.3.1 Possible societal impacts

When it comes to offshore mining, the most relevant social impacts will
likely be associated with several key changes during mining life cycle, which
is likely to be relatively long (20–30 years) and may apply to different
stakeholder groups at household, local, regional, national, and international
level. Exploration is already occurring in different regions where the absence
of conservation areas to protect the unique and little known ecosystems of
the deep-sea, and sometimes the lack of an adequate regulatory regime, is
striking. Public and local communities participation is also frequently lacking
from the project’s process and the authorities’ decision-making (Franks,
2011; SPC, 2013d; EPRS, 2015, Baker et al., 2017), although trends in
legal developments around the globe seem to be heading towards more
transparency.
Table 3.3 below presents the potential societal impacts due to offshore
mining built upon examples from terrestrial mining as a proxy (EPRS, 2015).
Table 3.3 Overview of potential societal impacts of offshore mining (EPRS, 2015, adapted
from SPC, 2013d)
Category Benefits Disadvantages
Socio-Political • Health and safety, • Social inequalities at local
• Working conditions, scale
• Remuneration ... • Political and strategic
• Opportunities for other conflicts or inequalities:
development options, land-based mining vs
• Strategic position of metal offshore mining policies.
providers in the global arena
Economic • Employment,
• Flow of money, • Change in industrial
• Training, landscape and composition,
• Local business expansion, • Dominance of foreign entities
• Community development and
social programs,
• Equitable distribution
Socio- • Compensatory measures in • Access to Marine Resources
environmental favour of local communities and competition between
• Compensatory measures in users of the sea
favour of the scientific world • Fisheries
• Increased knowledge of • Cultural practices,
habitat and ecosystem • Environmental damage
through data, surveys and
trials’ results
Table 3.3 solely lists the societal impacts applicable to offshore mining that
are considered likely to have a significant effect as things currently stand. It
is an attempt at balancing positive and negative effects.
From a socio-political point of view, impacts can be both positive and neg-
ative. For example, labour features as described in Section 3.4.1 may increase
remuneration in a given locality because of the higher skilled workforce, as
well as ensure good working conditions and health and safety standards.
However, this may also increase the social inequalities especially when a
project happens in a developing state where communities depend on lower
skilled jobs. In Papua New Guinea, one of the main concerns of local com-
munities was the impact that the Solwara 1 project would have on fisheries.
On a bigger political and strategic scale, seabed mining represents oppor-
tunities for states or regions in terms of direct growth, but also indirectly
through the development of other industries and sectors (e.g. development
of industries using the produced metals, service providers, R&D ...). For the
reasons earlier explained in Section 3.2, this could also help global strategies
and alliances between states or regions. On the other hand, the rise of big and
small, new offshore players might affect the economy and political stability
of players depending on land-based mining, potentially creating tensions or
conflicts.
Economically speaking, while there are a number of benefits directly aris-
ing from the sector’s growth (e.g. employment, cash flow, community devel-
opment ...), it might also bring some challenges requiring adaptation. The rise
of seabed mining in a state that may be new to the sector, or that already has
land-based mining activities occurring on its territory to balance it with, will
change the industrial organisation of its system. Inevitably, this will require
an adaptation phase, potentially with a new organisation of the sector or even
the broader economical balance. In developing states, one of these changes
will most likely occur from the arrival or increase in foreign entities joining
an economical system, potentially disrupting a pre-established balance.
The socio-environmental impacts of seabed mining are perhaps more
difficult to balance. It appears rather obvious what ecological concerns might
mean for people worldwide and even so for local communities: lesser access
to marine resources for those competing users of the seas (shipping routes,
cables, scientific campaigns ...), impact on fisheries, or more generally,
the environmental damage undeniably arising out of seabed mining (see
Section 3.4.4 for more details). However, as compensatory measures, the
sector has the potential to offset those impacts by bringing value back
to society, through scientific opportunities on-site, the gathering of data
106 Seabed Mining
and knowledge on these poorly known environments, or direct benefits to

local communities through funding of local infrastructures, training opportu-
nities, etc.
3.4.3.2 Societal impact relevant for the EU

Due to the increasing importance of the topic in the immediate future
and the necessity for the EU yet to define a policy on this matter, the
European Commission launched a Stakeholder Consultation (including civil
society, NGOs, Member States and some private and public consultancies) on
offshore mining. The main outcomes of this consultation showed that18 :
• Commercial mining is not an option unless regulations are in place.
• The drafting and adoption of regulations must be transparent and
participatory and any benefits widely shared.
• More emphasis on reuse and recycling of materials rather than on
offshore mining is required.
On the other hand, the interviews with industry stakeholders point out the
fact that before making any conclusions, the opponents of offshore mining,
scientists and governments should look at the overall risk and impact of
offshore mining vis-à-vis terrestrial mining, and allow things to go forward.
As further explained in Section 3.4.5, the land, nearshore and offshore
mining impacts can be compared and they also diverge for clear reasons.
High risk and actual damages already occur on land, and the sole recycling
and reuse of metals will not satisfy the increasing need for mineral resources.
Hence, it is important to weigh the pros and the cons and to balance environ-
mental risks with the potential for benefits, all the while making sure that the
right framework is in place to enable sustainability (EPRS, 2015).
3.4.3.3 Mitigation of societal impacts

Lessons learnt from terrestrial and nearshore mining are provided below
together with past relationships between mining companies and Pacific Island
communities that have been characterized by complexities, tensions and
contradictions (Franks, 2010; SKR Consulting, 2010; EPRS, 2015):
• Use ecological (systematic) approach.
• Be aware that legal limits and scientific data may not be aligned with
community expectations.
18
http://ec.europa.eu/dgs/maritimeaffairs fisheries/consultations/seabed-mining/index en.
htm (d.d. 13-07-2017).
• Societal changes can be indirect, often of economic/political in nature.

• Socio-environmental concerns are very important (use of coastlines,
deep-water pollution and disturbance).
• Access to, use of and ownership of land are also important (e.g. issues
of fishing or cultural practices).
• Government institutions are crucial to balance environmental preserva-
tion against economic gain.
• Corporate governance, corporate social responsibility and transparent
procedures need to be established before mining takes place.
• Social scientific research is needed to understand communities’
positions.
3.4.3.4 Safeguarding financial revenues for the future

An offshore resource (like any other resource) only has a limited stock and
has an end to exploitation at a given time point. After exploitation ends, so
does the source of substantial income. As far as international seabed mining in
the Area is concerned, the LOSC provides that all mining activities (whether
at the exploration or the exploitation phase) shall be carried out for the benefit
of mankind as a whole. Hence, some of the provisions in Part XI of the LOSC
ensure benefit-sharing in several forms, including non-monetary, particularly
in favour of developing States. The sharing of financial and other economic
benefits is one of them, although it has not really been implemented yet
since exploitation has not started. The LOSC does not give much detail as
to how this benefit-sharing should be operationalized, but it does prescribe
that a contractor’s payment to the ISA shall not be higher than the rates
in land-based mining in order to avoid inequalities in the sector. Major
discussions are currently talking about rates of 4–6% of the potential revenues
(ISA, 2016).
Before granting exploitation concessions, mineral funds should be con-
sidered and set up, especially considering that the Area represents the
Common Heritage of Mankind and thereby of all nations. Countries like
Alaska, East Timor, Norway and São Tomé et Prı́ncipe offer examples and
inspiration for their structure and organisation (SPC, 2013d).
3.4.3.5 Safeguarding scientific revenues for the future

Other than financial benefits, the LOSC also provides for the dissemination
of marine scientific research results, cooperation with developing states in
research programs and training, technology transfer, access to reserved areas
108 Seabed Mining
of exploration reserved for developing States at lesser costs. During the Berlin
workshop in 201715,16 , it was urged to combine all ecological and physical
non-sensitive data and to make it publicly available. This is a matter that
should be, and that is to a certain extent, regulated, but more importantly that
should be effectively implemented in the future.
3.4.4 Ecological Concerns

3.4.4.1 Potential direct ecological impacts
Various studies emphasize that the ecological impacts of offshore mining are
a point of major concern. Amongst others, SPC (2013a, b, c), Ortega (2014),
and Sharma (2017) concluded that the impact of offshore mining is expected
to be in the various forms of:
• loss of substrate,
• loss of benthic communities,
• loss of biodiversity,
• sediment plumes on the seafloor,
• increased turbidity in the water column, and
• addition of bottom sediments to the surface.
Such impacts would result in changes to the food chain and thus to the marine
ecosystem, but impacts on the surface as well, owing to collection, separation,
lifting, transportation, processing and discharge of effluents should not be
overlooked. Oebius et al. (2001), Ramirez-Llodra et al. (2015) and others
described the impact of sediment clouds as a result of other human activities,
providing clues and background knowledge from which the impact of seabed
mining plumes could be extrapolated. Boschen et al. (2013) describe more
specifically the impact on a range of habitats and time scales for SMS
deposits.
Mining nodule areas seem especially sensitive, since these deep areas
are cold and hardly receive energy input: a standstill world with high and
complex biodiversity. The nodules themselves harbour an epiphytic biota
distinct from the surrounding sediments. In one CCZ locality, roughly
10 per cent of exposed nodule surfaces were recorded as being covered by
sessile, eukaryotic organisms (mostly foraminiferan protozoans) carrying an
unique mini-ecosystem themselves (SPC, 2013b; Vanreusel et al., 2016).
The seamount areas of cobalt-rich crusts host biodiversity rich habi-
tats such as deep water coral reefs. Water currents are enhanced around
seamounts, delivering nutrients that promote primary productivity in surface
waters, which in turn may promote the growth of fish and animals such as
corals, anemones, stars and sponges, but also creates an oxygen-minimum
zone that inhibits the growth of some organisms (SPC, 2013c). FAO desig-
nates seamounts as Vulnerable Marine Ecosystems, a protective status for
fishing activities19 .
Hydrothermal vents and SMS deposits are associated ecosystems com-
posed of an extraordinary array of animal life. Chemosynthetic bacteria,
which use hydrogen sulphide as their energy source, form the basis of the vent
food web, which is comprised of a variety of giant tubeworms, crustaceans,
molluscs and other species, with composition depending on the location of
the vent sites. Many vent species are considered endemic to vent sites and
hydrothermal vent habitats are thus considered to hold intrinsic scientific
value (Van Dover, 2008; SPC, 2013a).
Technical and scientific studies have found that there is a general lack
of data to make thorough environmental impact assessments (SPC 2013a,
b, c, d; Lange et al., 2014; Ecorys, 2014; Rogers et al., 2015). Phosphorite
mining examples show how uncertainties and gaps in knowledge and data
actually lead to major delays in project development (Baker et al., 2017),
in particular due to major discussion on EIAs, potential economic impacts,
government shares and social acceptance. Societal protest is due to the fact
that phosphorite mining can be nearshore, within the range of fisheries and
rich biodiversity (see e.g. Benkenstein, 2014; EPRS, 2015; Baker et al., 2017;
Sharma, 2017).
3.4.4.2 Potential indirect ecological impacts

On a more general level, one could state that offshore mining hampers the
evolution towards a circular economy (recycling, eco-design, sharing, repair-
ing, etc.), since new resources are reclaimed instead of recycling discarded
products. On the other hand, Ecorys (2014) indicated that recycled contents
remain rather low, not fulfilling the needs. It also shows that offshore mining
can provide a part of the additional new ores that will be needed on the
market.
Gas hydrates are thought to influence ocean carbon cycling, global cli-
mate change, and coastal sediment stability (issue under serious debate, e.g.
Bosswell & Collett, 2011; Lange et al., 2014). In addition the mobilization
of gas hydrates as a new, potentially cheap energy source will contribute to
19
http://www.fao.org/in-action/vulnerable-marine-ecosystems/en/ (accessed 13 July 2017).
110 Seabed Mining
additional CO2 in the atmosphere, a cheap new source can also hamper the
development of renewable techniques.
3.4.4.3 Mitigation of ecological impacts

Concerns about the ecological impact of offshore mining are recognized by
the ISA, who have subsequently taken various actions to describe and support
good practices. This includes training – including biodiversity monitoring and
development of environmental management systems.
Integrated governance based on the ecosystem approach will be nec-
essary in developing deep-sea mineral policies. Ecosystem-based oceans
management strategies, laws, and regulation for seabed mining would include
provisions for (SPC, 2013d, ISA):
• Collecting adequate baseline information on the marine environment
where mining could potentially occur.
• Establishing protected areas where there are vulnerable marine ecosys-
tems, ecologically or biologically significant areas, depleted, threat-
ened, or endangered species, and representative examples of deep sea
ecosystems.
• Adopting a precautionary approach that, in the absence of compelling
evidence to the contrary, assumes offshore mining will have adverse
ecological impact and that proportionate precautions should be taken
to minimize the risks.
• Applying adaptive management in which different hypotheses on
exploitation and impacts are formulated and tested during exploitation
in order to switch to different management strategies.
Processes at the deep seafloor require lots of energy, e.g. for transport of raw
material to the surface and for processing and transport on board of vessels
and platforms. Therefore, the use of on-site renewable energy sources may
be considered to reduce the supply and costs of fuels, and emissions of CO2 .
Especially when combined with floating or fixed platforms, wave energy and
wind farms could possibly be used. To this end, innovation and R&D in the
seabed mining sector is a crucial and on-going step.
3.4.5 Comparing the Impacts of Land-based Mining versus

Offshore Mining
Aside from sediment plumes being dispersed in the water column at different
depths with different consequences, seabed mining will also undoubtedly
destroy the habitats and biodiversity locally and in the case of nodules most
likely permanently, on the sites where the mining occurs. However, these
two impacts (plumes and habitat destruction) need to be relativized when
compared to land-based mining’s social and environmental footprint.
On land, mining tailings could be the equivalent of sediment plumes.
Mining tailings are often dumped directly in the surrounding environment,
may it be grounds or rivers, and are more often than not charged with chemi-
cal and heavy metals remaining from minerals processing into commercially
exploitable metals. While the dumping of sediment tailings has significant
effects on the surrounding environment comparable to the ones of underwater
plumes, contaminated tailings flowing into the water cycle – groundwater,
watercourses and eventually the sea – is quite worrisome, to say the least
(Hein et al., 2013; Ramirez-Llodra et al., 2015; Rogers et al., 2015).
With seabed mining, contaminated sediments plumes in the water column
are not only unlikely because on-board processing methods differ, but they are
also legally forbidden. Not only the LOSC and ISA standards do not and will
not allow it, but maritime practice and customary rules built upon the relevant
IMO conventions have long been applied, monitored and effective (IMO,
1972; IMO, 1996). Even though to date IMO conventions are not directly
applicable to seabed mining, the ISA, following the International Tribunal
for the Law of the Sea’s advice, is taking steps to avoid the emergence of
“sponsoring States of convenience” in the seabed mining sector, meaning that
States will be treated equally irrespective of their status or capacity when it
will come to compliance with Part XI of the LOSC and the ISA Mining Code
(ITLOS, 2011). This is also of relevance considering that land-based mining
often occurs in places where, even when environmental safeguards are in
place, their effective application is often lacking. Indeed, major extracting
activities happen on the territory of developing States that are at best, unable
to monitor and enforce and at worse unstable and corrupted (e.g. China,
Congo).
Hence, even though the geographical scope of sediment plumes is likely
to be larger than onshore mining due to the size of exploitation areas and
oceanic currents and dynamics, measures to maintain turbidity at an accept-
able level and to prevent the use of contaminants will be effectively applied
and monitored by several levels of authorities (sponsoring States, ISA, IMO).
A major concern is still the definition of what is acceptable and what is
harmful impact in this offshore environment8 .
Comparison of habitat destruction onshore and offshore bears different
concerns. Seabed mining is likely to occur on areas much larger than typical
land-based mine sites. The exploration area of GSR is three times the size of
112 Seabed Mining
Belgium5 . Even if they are likely to actually exploit only a small proportion
of it, that could represent up to a third of said country. However, the direct
impact of extraction will have a superficial impact on the seafloor (Hein et al.,
2013). Indeed, whichever mineral is targeted (nodules, sulphides or crusts)
will not require deep-cutting excavation methods. Because of the formation
of such minerals either from superjacent water deposit or subsoil volcanic and
geologic activity which are specific to their oceanic environment, mineral
extraction does not require much more than scraping the seafloor’s surface
of a few meters deep only (Hein et al., 2013). When compared to land-
based mining, where entire mountains can be taken down or underground
mining can go too deep as to weaken stability and provoke slides (e.g. Chile),
seabed mining’s negative impact on the seafloor habitat may appear minor
from a geological point of view. From an ecological point of view, habi-
tat, biodiversity, genetic information and ecosystems concerns are not fully
addressed and compared yet (SPC, 2013a, b, c, 2016; Ecorys, 2014; Rogers
et al., 201520 ).
Last but not least, working conditions on board will without a doubt be a
lot better than conditions of onshore mine workers. Indeed, the technicality
of seabed mining operations and the restrictions of having to sail on the high
seas require limited and higher trained workers and seafarers, as opposed
to the potentially terrible conditions of miners’ populations often abused by
corporates and governments (e.g. Congo) in terms of salary, health and safety
rules21 .
In summary then, it is difficult to compare the environmental impacts
of land based mining with seabed mining because one is a mature, large
scale, destructive industry and the other has only limited information. As a
consequence in all individual cases decision makers would need to evaluate
independently – taking into consideration the market and environmental
conditions of the individual minerals at the moment of deciding and in the
future – whether the integrated economic, social and environmental footprint
of seabed mining is acceptable and preferable or that land-based mining
provides a better solution to meet the standards for the integrated economic,
social and environmental footprints.
20
http://dosi-project.org/ (d.d. 13-07-2017).
21
http://www.economist.com/news/middle-east-and-africa/21705860-can-ambitious-mine-
make-difference-eastern-congo-richest-riskiest (d.d. 13-07-2017).
3.5 Innovation 113
3.5 Innovation
Innovation needs are firstly introduced using the guiding principles of LCA
and the value chain and next described in more detail. The value chain for
offshore mining, irrespective of the specific resource, can be considered to
include six main stages (Figure 3.10; Ecorys, 2014):
1. Exploration;
2. Resource assessment, evaluation and mine planning;
3. Extraction, lifting and surface operations;
4. Offshore and onshore logistics;
5. Processing stage;
6. Distribution and sales (this stage is not included in this study’s analysis).
The current state of technology can be assessed on the basis of Technology
Readiness Levels (TRL). The TRL levels for offshore mining value chain
have recently been assessed and reported (Ecorys, 2014), and this section
builds on the results of this study that was commissioned by the EU, and by
the SPC study (2016).
3.5.1 Lifecycle Stages

The concept of business lifecycle considers how industries and firms were
not in a steady state and appeared to evolve over time. The general value
chain of nearshore and offshore mining is given Figure 3.10. For each sector
and segment information for the LCA is given throughout the document. Per
subsector more information on the most conspicuous features is given in the
next sections. The most dominating aspect at the moment is the interpretation
of exploration results, extraction and ore processing (steps 2, 3 and 5 in
Figure 3.10) where the TRL of most aspects is still fairly low.
3.5.1.1 LCA of nodules, SMS deposits and cobalt crusts

The LCAs of nodules, SMS deposits and cobalt crusts are discussed in
combination since they experience the same driving forces. The main drivers
of the interest in offshore mining of metals seems to be the high market prices
of the resources at stake at a certain moment in combination with the high
exploitation costs vs geopolitical concerns on flows of essential ores.
Typically, TRL levels are lower (range 1–4) for technologies required on
the seabed (collectors like cutters and scavengers) and for vertical transport
(lifters). The on-board processing of ores for metal extraction -in order to
reduce material loads to be transported- also needs to be improved. Technolo-
gies required at sea level (ship/platform and associated equipment, logistics)
114 Seabed Mining
and onshore are more mature as they have similarity to applications in

other sectors already existing. In addition the refined metals have their long
established markets (Ecorys, 2014).
Innovation is expected to reduce the exploitation costs. Since these prices
are highly dynamic and innovation costs are high and time consuming, major
developments in activities are not expected at the moment (except for a few
exceptions with high concentrations of resources).
3.5.1.2 LCA of phosphorites

A first remark is that extensive reviews are scarce on marine phosphorite
mining. Only limited information is available. Most informative are websites.
Given the high potential of this resource a more elaborate study is welcome.
Contrary to the metals, phosphorites can have valid business cases in the
three projects in Namibia (two companies), Don Diego, Mexico and Chatham
rise New Zealand. Several aspects make these business cases alive:
1. The large local demand for phosphates (Don Diego, 2015);
2. High global market prices (Figure 3.1);
3. Reasonable exploitation costs (Table 3.4);
4. Potential export and a share in the global market (Benkenstein, 2014).
Whereas they are imported now, rich relative shallow concessions are avail-
able and investors are willing to make the necessary high start-up investments.
Amongst other reasons, problems with land-based ore qualities, increased
demands, and geopolitical concerns (de Ridder et al., 2012), a more stabilized
higher price and presumably technological developments will have altered the
business case.
For phosphorites the business case seems more viable: large concessions
can be found in the easily reachable nearshore and the shallow offshore. This
enables the use of standard equipment what only has to be adapted to a minor
extend (Schulte, 2013). As a result preparations have been made to exploit
the resources with substantial interest expected (like being able to deliver
10% of the global market for phosphates). Environmental considerations have
blocked the actual exploitation until further evaluations partly due to the fact
that this type of bottom destruction in this zone has not been attempted before
and e.g. impacts on bottom-life and associated fish communities are feared
(Benkenstein, 2014; Rogers et al., 2015; Baker et al., 2017, Sharma, 2017)22 .
22
See e.g. the continuing discussion on the Namibian NMP Sandpiper project (accessed
13-07-2017): https://southernafrican.news/2016/11/07/namibia-u-turn-on-phosphate-mining/
Table 3.4 CAPEX, OPEX costs and IRR of metal ores (Ecorys 2014) and an example phosphate project7 . The metals used for calculations
and the relative contribution to price: SMS: copper, gold, silver (70:28:2). Nodules: copper, cobalt, nickel (25:11:63). Including processing,
however assumed to exclude processing of manganese. Cobalt crusts: copper, cobalt, nickel (4:63:33). Including processing, however assumed
to exclude processing of manganese
SMS Deposits Polymetallic Nodules Cobalt Crust Phosphate
CAPEX ($) 1,000,000,000 1,200,000,000 600,000,000 400,000,000a
Years of operation: 15 20 20 20
Linear depreciation $/yr: 66,666,667 60,000,000 30,000,000
Yearly production (tonnes crude ore): 1,300,000 2,000,000 450,0001 3,000,000
CAPEX per tonne crude ore($): 51 30 37 7
OPEX Cost excluding processing $/tonne crude ore: 60
OPEX Cost including processing $/tonne crude ore: 70–100 85–300 95–310
Revenue (excluding manganese) $/tonne crude ore: 718 306 216
Total OPEX per project 3,315,000,000 7,000,000,000 3,200,000,000 3,600,000,000
Total Revenues per project 14,001,000,000 12,240,000,000 3,456,000,000 7,500,000,000
Net profit per project 9,686,000,000 4,040,000,000 –344,000,000 3,500,000,000b
IRR % (excluding manganese) 68 2 no positive cash 23.6
flow over period
IRR % (including manganese) 109 46
a
Estimated for total project.
b
at $125/tonne.
3.5 Innovation
115
116 Seabed Mining
3.5.1.3 LCA of gas hydrates

According to current estimates, global hydrate deposits contain about 10
times more methane gas than conventional natural gas deposits. There is a
strong urge to make the exploitation of gas hydrates viable. In particular,
highly developed countries without their own sources of energy are investing
in this sector. The technology needs to be developed since it is a whole
new substance type for exploitation. There are some doubts whether it can
be exploited in a profitable approach. It remains to be seen whether hydrate
extraction at great depths is economically viable at all.
Continuing on the specific stages in the value chain (Figure 3.10):
3.5.2 Resource Assessment

During the last decade, stage 1 has been developed up to a reasonable level
to proceed with the actual exploitation phase. In stage 2 Planning, deep-sea
geotechnical site investigation and evaluation methods and procedures for
pit design, including slopes and ground conditions as well as for predicting
extraction efficiencies are the subject of current R&D projects23 . However,
the extraction methodology still needs to be validated in lab and real environ-
ments. Since offshore and onshore logistics are already well developed, the
critical stage in the value chain from a technology perspective is stage 3. It
will be considered here.
3.5.3 Extraction
No commercial offshore mining operations have taken place yet, and espe-
cially the extraction techniques required on the seabed are not operational yet
(Ecorys, 2014, SPC, 2016). The technology to be used depends mainly on the
type of deposit. The extraction process for deep-sea minerals starts with the
excavation. For nodules the proposed technique for excavation is by making
use of collectors, while for SMS deposits crusts cutters are being developed.
Some processing may also take place on the seabed. The TRL for proposed
extraction technologies is scored low, ranging from TRL2 (formulated con-
cept) to TRL 5 (technology validated in relevant environment). Hence, more
development should take place before exploitation from the deep-sea bed can
take place. In the summer 2017, GSR5 will test a nodule harvesting tool for
the first time in the Area, showing great improvements in the design and
23
See for instance the Blue Mining project www.bluemining.eu; or the Blue Nodules project
www.blue-nodules.euor MIDAS: www.eu-midas.net (d.d. 13-07-2017).
3.5 Innovation 117
preparation of a future exploitation project. Nautilus will also be undertaking

submerged trials in PNG24 .
The availability of the operational gear is a crucial aspect (SPC, 2016). At
the time of writing, the most advanced (and applied) technique to raise crude
ore from the seabed appears to be the technique as developed by the diamond
industry to recover eroded diamonds, deposited on the (nearshore) ocean floor
by land runoff and fluvial systems. The maximum reported commercial and
full-scale operative removal depth reported so far is limited to – 140 m (ROVs
and scraping & vertical lifting2 ). This basic technology – as developed for
this given mining environment – may amongst others also be applicable to the
environments under consideration in the present chapter, although we are here
dealing with depths ranging from a few hundred meters for seamount crusts
down to –4000 m for nodules. In addition, for the phosphorite concessions of
Don Diego and Chatham Rise, an adapted TSHD with trailing technique will
most likely be developed to remove ores till depths of –450 m3 . Cutters need
to be tested and optimised for SMS deposits and crusts.
3.5.4 Vertical Lifting

Vertical lifting is another critical part of the mining process. Air lift systems
and especially hydraulic systems seem most applicable for use in deep sea
mining operations. However, TRL levels for proposed lifting systems is at
5 at the highest, and therefore further development is required. Both require
high power input and are so far sensitive to unstable flows, which again given
the depths at stake is one of the most critical aspects from a technological and
technical point of view. Possibly, techniques being used in the offshore oil
and gas sector (transport of drill cuttings and mud) could be adjusted for use
in ore transport. For nodules the ROVs or AUVs seem the most promising
technique. These have to be tested for operation at depth of 6000 m (real
operating environment).
3.5.5 On Board Processing

Once raw material is transported to the surface, a working platform is
required for further handling. Support vessels or platforms are proposed
24
See http://www.tijd.be/nieuws/archief/Knollen-rapen-op-de-zeebodem/9854214?ckc=1&
ts=1491349056 and http://www.nautilusminerals.com/irm/PDF/1893 0/NautilusMineralsSea
floorProductionToolsarriveinPapuaNewGuinea (d.d. 13-07-2017).
118 Seabed Mining
as dispatching system, storage facility, dewatering and on-board processing

facility. Simple dewatering systems can easily be applied on board of vessels
and platforms, but further processing on board like concentrating ore and
application of metallurgical processing requires further development. Fixed
platforms offer better opportunities for processing than ships because com-
minution, the grinding to smaller particles, is performed by large and heavy
equipment.
For efficient use of ships and equipment, use of a platform in a central
place with respect to the mining locations should be envisaged. Platforms
are very stable, and instability issues like on ships are not important. The
technology for such platforms in deep sea is well established in the oil-
industry. In addition one can think of floating platforms, as well as of the
installation of renewable energy structures in order to reduce the energy costs
and carbon footprint.
A central platform located nearby the mining site or halfway to port,
and where most of the processing would be carried out, could be more
efficient than carrying-out processing on the ship. The ship could transport the
retrieved minerals to the platform rather than sailing all the way to port every
time, which is particularly relevant in remote cases like the high seas and the
Area. Processing of the ore can proceed on the platform and concentrates can
then be shipped to on-shore locations (Ecorys, 2014, SPC, 2016).
3.5.6 Final Processing

Due to the large quantities of ore, and – in some cases – complex chemical
process involved, the final processing will most likely take place on-shore in
dedicated facilities. In general two techniques have been tested: hydrometal-
lurgy, where the metals are separated with acids (hydrochloric or sulphuric)
or basic reagents (ammonia), and smelting. Some ores, especially manganese
and cobalt (to a lesser extent) still pose problems and require extensive energy
input or use of aggressive chemicals (by methods still in optimisation phase,
SPC, 2016).
However, most developments that are currently taking place focus on
adapting available techniques to deep-sea environments rather than devel-
oping novel techniques and processes specifically suitable for deep-sea
deployment. It seems therefore that higher operating expenses (OPEX) are
accepted to avoid higher capital expenditures (CAPEX), e.g. for lifting
(Schulte, 20123 ).
3.6 Business Economics and Investment 119
3.6 Business Economics and Investment

From a commercial perspective, seabed mining is a small sector, with only
few active companies. This section reviews available information on the
economic performance of seabed mining, addresses the current status of
investment and identifies key concerns among investors.
3.6.1 Economic Climate for Offshore Mining

Land-based mining was developed over a long period of time. Start-
ing with small-scale mining of easily accessible deposits, this sector
is gradually increasing in size of operations and targeted less acces-
sible depots. As a consequence, knowledge and investments increased
gradually. This development pathway is not foreseen for seabed min-
ing where – particularly for resources at depths exceeding 200 metres
– investors need to be fully committed with high initial CAPX
costs (near $1,000 million starting, Clark et al., 2013, Rozemeijer
et al., 2015, Table 3.4).
Despite of the availability of a lot of documents on the subject, it is hard
to dig into the details of the costs involved in offshore mining in order to
pinpoint a target for innovation on the basis of CAPEX or OPEX. This is due
to the lack of uniformity in the data provided by different authors concerning
CAPEX and OPEX. When considering the cost and revenues it is important
to remain cognizant of the fact that all costs are based on technology that
has been piloted but not proven at the commercial level of operation. Cost
estimates are highly uncertain and may change significantly depending on
the mining technology that is in place at the time of full-scale commercial
operation.
From the assessments described below, the following general picture
emerges. Phosphorites exploitation can be profitable at this time. Off-
shore mining of SMS deposits seem economically profitable, when enough
resources can be found clustered to support 15 years of continuous operations.
Nodules revenue estimates are subject to serious debate and exploitation
of crusts is far from profitable. Gas hydrates are even further from actual
exploitation (see Table 3.4).
3.6.1.1 Market price for key resources

It is interesting to study long-term trends of metal prices as the fluctuation in
price correlates to the interest in offshore mining. The first wave of offshore
mining development took place in the 1970s when resource prices where high
120 Seabed Mining
(Figure 3.1, Section 3.2). Likewise, interest in the first decade of the 21st
century can be related to high resource prices.
In the mid-2000s, prices for these metals rapidly increased, but then
started to decline around the year 2010 (Figure 3.1). Current prices are
somewhere in between pre-2000 prices and the highest recorded prices25 .
3.6.1.2 Costs and revenues of SMS deposit mining

SMS deposit mining requires a very high initial investment to start the oper-
ations. Initial investments (CAPEX) are estimated at around $300M–400M
for a typical seafloor SMS deposits operation (Birney et al., 2006; Yamazaki,
2008). However based on actual costs developments for the Nautilus Solwara
1 operation, actual CAPEX is likely to be much higher. In practice total
CAPEX, including exploration costs, is estimated to be closer to $1,000M
(Table 3.4; Ecorys, 2014; EPRS, 2015). The OPEX of seabed mining, includ-
ing transport to shore, are estimated to be between $70–140/tonne crude ore
based on the above sources. Necessary processing costs increase total OPEX
to $150–260/tonne crude ore.
Boschen et al. (2013), backed by the studies of Ecorys (2014) and SPC
(2016), estimated that SMS deposits will be profitable due to the high content
in currently highly priced copper, gold and silver (with copper contributing
the most ∼2/3). In addition REEs and other metals will contribute also to the
revenues. The Ecorys study calculated a potential internal rate of return (IRR)
of 68% of total investment. Total revenues are $14,001,000,000 and net profit
$9,686,000,000 (Table 3.4).
However, there is considerable uncertainty regarding SMS deposits as it
is assumed that an operation of 15 years is needed to generate returns on
investment, whereas most resources and proven reserves seem to point to
smaller sizes, and a strain of operations on different locations needs to be
established. The Solwara1 project seems to have only a limited amount of
deposits (2 years) (SRK Consulting, 2010; Ecorys, 2014; EPRS, 2015; SPC,
2016). In addition, when comparing all different sources, different values for
CAPEX and OPEX are encountered every time (Rozemeijer et al., 2015).
3.6.1.3 Costs and revenues of nodule mining

Nodules mining is expected to be more capital intensive than SMS deposit
mining due to the larger depths and more widespread distribution over the
seafloor. An initial estimated CAPEX of $1,200M seems realistic to start
25
www.infomine.com (d.d. 13-07-2017).
operations (Yamazaki, 2008, Clark et al., 2013). A more detailed estimate–

as described in EPRS’ study (2015) indicates a CAPEX cost of almost
$1,800M. Still according to ERPS, almost half of these capital investments
come from investments in a processing facility. Estimates of nodule mining
OPEX range between $85-500/tonne, of which costs related to processing
form an important component.
Considering copper, cobalt and nickel, Ecorys’ study estimated the IRR
at 2% (Table 3.4) with nickel being the main contributor (∼1/2). Manganese
was excluded from their calculations. Including manganese IRR increases
to 102%. For manganese no efficient extraction method is yet available.
The manganese residuals could of course be stored till further developments
enable costs effective isolation (SPC, 2016). The conclusion of Ecorys (2014)
is not consistent with other sources that consider nodules as the most attrac-
tive deposits economically (EPRS, 2015). According to SPC (2016), nodules
were profitable only in 60% of various scenarios with different CAPEX,
OPEX and revenues. Clark et al. (2013) give an IRR range of 6–38%.
Note that Martino & Parson (2012) propose that a lower IRR of 15–20%
could be advocated since seabed mining is less risky than onshore mining
(IRR > 30%).
Rozemeijer et al. (2015) calculated based on different scenarios with
copper, cobalt and nickel prices of 2015 and were not able to show profitable
exploitation. The assumptions taken on e.g. equipment efficiency and costs
are very important in the calculations and vary highly between authors
(Rozemeijer et al., 2015; SPC, 2016).
3.6.1.4 Costs and revenues of cobalt crust mining

Only the costs and revenues of a single cobalt crust source have been
assessed. Yamazaki (2008) has estimated the CAPEX and OPEX of cobalt
crusts based on nodule mining. CAPEX is expected to be some 50% of nodule
mining and OPEX stand at 45%. However, assumed production volumes (dry)
in these estimate for cobalt crusts stands at some 40% of manganese nodules
which makes the CAPEX and OPEX per tonne some 25% resp. 12.5%
higher than for manganese nodules. Based on calculations by Ecorys (2014),
Rozemeijer et al. (2015) and SPC (2016), it is concluded that under current
market prices, there is no viable business case for cobalt crusts mining.
3.6.1.5 Costs and revenues of phosphorites

Namibian Marine Phosphate (NMP) estimates the further CAPEX for a
whole project on phosphorite mining will amount to approximately $326M.
122 Seabed Mining
In addition, $50 million OPEX will be spent on the project. The mining
licence of NMP has been granted for an initial period of 20 years. Approxi-
mately 3 million tonnes of dry product for export are expected to be processed
starting from year three, at a price of $125 per tonne (Table 3.4). This is
approximately $7–7.5 billion for 20 years. It is claimed to be very profitable.
The IRR for Namibian Marine Phosphate project Sandpiper is estimated
at 24%7 .
Leviev’s private company LL Namibia Phosphate (LLNP) plans investing
$800 million in building a mining facility to produce about two million tons
annually from an estimated two billion tons at a depth of 300 meters. At
a selling price of an estimated $125/tonne, the revenues are about $250M
a year. Chatham Rock Phosphate expects yearly revenues of $280M and a
yearly profit of $60M (Schilling et al., 2013).
3.6.1.6 Concerns and uncertainty about economic viability

Doubts can be raised on the economic viability of offshore mining of metal
ores. Ecorys (2014) examined the estimated CAPEX, OPEX and market price
for metals of seabed mining and concluded that SMS deposits are likely to
have the highest commercial viability (to be treated with caution as no actual
operations have taken place yet). This is due to the fact that in SMS deposits,
copper can be extracted in large amounts from these resources at a moderate
market costs. Furthermore, it is possible to extract gold from these reserves
(Boschen et al., 2013).
In the calculations presented above, exploitation of nodules and crusts is
not commercially feasible. This finding is not consistent with the answers
given by some interviewees (EPRS, 2015), who mentioned nodules as the
most attractive deposits commercially. This can be due to the fact that mining
companies assume an operation of 15 years (20 years for nodules and cobalt
crusts) to generate returns on investment, while key uncertainties exist in case
of SMS deposits about the resources and reserves which seem to point to
smaller sizes (SRK Consulting, 2010; Ecorys 2014). This has been confirmed
by the industry stakeholders, mentioning that it is challenging to find and
extract SMS deposits as they are more difficult to spot and are relatively
small, while the operations are usually calculated with a proven resource for
20 years.
3.6.2 Government Support

Government support for development and commercialisation of offshore
mining can take different forms. In a basic form, governments can be catalysts
via their membership of the ISA, enabling their national companies to obtain
exploration and exploitation contracts with the ISA.
Funding can also stimulate innovation. Offshore mining could use a boost
in order to exploit at less energy costs (cheaper) and with less environmental
impact, making it economically viable. To this end, national and EU publicly
funded research projects related to offshore mining and offshore exploration
technologies are carried out. Research is often supported by engineering
firms and technology providers, which themselves work closely together with
research institutes and universities. Three important EU projects aiming at
deep-sea resource extraction are Blue Mining and MIDAS23 . Blue Mining
explores the needs for developing the technologies required for nodule and
SMS mining, while MIDAS focuses on environmental impacts from deep-
sea activities. Other research efforts are linked with seabed mining, but have
a wider scope.
An important programme is the European Innovation Partnerships (EIP).
The EIP aims to reduce the possibility that a shortage of raw materials may
undermine the EU industry’s capacity to produce strategic products for EU
society. The EIP on Raw Materials is not a new funding instrument. It aims
to bring stakeholders together to exchange ideas, create and join partnerships
in projects that produce concrete deliverables. In 2014, 80 commitments were
recognized as ‘Raw Material Commitments’, out of which, six are related to
seabed mining (Ecorys, 2014).
3.6.3 Status of Investment in Seabed Mining

The recent history of deep-sea mining is not a story of great commer-
cial success. A number of companies have succeeded in getting listed on
various stock markets, including well-known companies such as Nautilus
Minerals (Toronto Stock Exchange), Neptune Minerals, Chatham Rock Phos-
phate (New Zealand) and Odyssey Marine Exploration. However, where
common stock-market indexes have risen considerably in the last years,
the stock-market value of these companies has dropped sharply between
2013–2015 and is consistently low since then. Traded volumes are also low
(see Figure 3.11).
Research on identification of investors in seabed mining, and their
interests – carried out under the EU Maribe-project and reported in van den
Burg et al. (2017), is illustrative of the low interest of investors in seabed
mining.
The inventory of investors active in the various Blue Growth and Blue
Economy sectors (van den Burg et al., 2017) identifies 31 investors in seabed
124 Seabed Mining
Figure 3.11 Stock market price of Nautilus, listed on Toronto stock exchange https://
www.bloomberg.com/quote/NUS:CN (06022017).
mining (out of 244 total investors). The majority of these investors are so-
called internal investors; these are companies that invest in R&D in seabed
mining, as this can be a future market for their products or services. Exam-
ples include shipbuilding companies (Damen, Royal IHC), generic maritime
service companies (Kongsberg Maritime, Heerema) and dredging companies
(such as Boskalis). Notably absent are private equity investors, business
angels and banks. These investors are generally from the UK, USA or the
Netherlands, with a few exceptions.
In a survey, investors were asked how important the different Blue Growth
sectors are for them (see van den Burg et al., 2017). Seabed mining scores
considerable lower than the other sectors, with an average score of only 1.82
(1 = not important, 4 = highly important), see Figure 3.12.
3.6.4 Factors Hampering Further Investment

Research into investor behaviour (see van den Burg et al., 2017) pointed out
some of the main concerns of investors. The top 5 risks that stand in the
Figure 3.12 Importance of various Blue Growth sectors (from van den Burg et al., 2017).
way of investment in seabed mining are discussed from a seabed mining

perspective below.
3.6.4.1 Operational risks

Technologies for seabed mining are under development but in the absence of
large-scale mining activities, this remains experimental development. While
surveys of deep-sea resources have a long history, the actual mining of these
resources has hardly been done before. Uncertainty about the technology to
deploy, the risk and associated costs impede investment.
3.6.4.2 Financial risks

Low interest of investors is inextricably linked to doubts about the financial
performance of the sector. In Figure 3.1 it was shown that prices of the
resources fluctuate significantly over time. In the period 2000–2010, prices
for natural resources peaked, increasing interest in the exploitation of deep-
sea resources. As mentioned before, copper, gold and silver are the main
metals of interest for SMS deposits, cobalt, and nickel (and copper to a very
limited extend) for nodules. Crusts seem too costly at this moment. Apart
from the overall uncertainty within the assumptions, a specific uncertainty
exists regarding potential revenue streams for manganese (Section 3.5.6).
126 Seabed Mining
This directly points to the importance of further efficiency increases in mining

itself and in processing as well.
3.6.4.3 Regulatory risk

The recent history of seabed mining shows that the risk of (sudden) with-
drawal of governmental support is real. This also includes permitting.
Chatham Rock Phosphate lost 92% of its stock value in one trading day when
it was refused consent to mine from the Chatham rise in 2015. With continued
pressure from NGO’s and other interest groups to halt further development –
also witnessed e.g. in Papua New Guinea – regulatory risks are a key obstacle
to investment in seabed mining (Baker et al., 2017, Sharma 20173 ).
3.6.4.4 Environmental issues

Given the attention the offshore mining industry receives from stakeholders,
none of the companies would be willing to add risks to their investment by
developing environmentally harming techniques. Before licenses are issued,
environmental impact assessments need to be approved, including the tech-
niques and mitigating actions concerning the environment. Therefore, it
can be expected that the technologies being developed at the moment are
technologies that will mitigate environmental impacts as much as possible.
Acting in an environmentally friendly way is a prerequisite for economically
attractive operations, as the risk of refusal, suspension or withdrawal of
permits is too high. However, standards and protocols for environmentally
friendly seabed mining are still under development (sees Section 3.4).
3.6.4.5 Product market risk

Finally, scarcity and increasing prices will have a direct impact on the
commercial viability of offshore mining operations, although this will also
trigger further terrestrial (including recycling) developments. Offshore min-
ing operations themselves are not expected to directly influence global prices
of most metals, except for cobalt and phosphorites. This will limit the number
of operations that can be exploited in parallel to crust and nodules, to avoid
boom and bust developments.
3.7 Concluding Remarks

Offshore mining is seen as one of the Blue Growth sectors, with a potential
contribution to growing the (European) economies. This promise stems from
an idea of vast natural resources, available for human exploitation, that are in
3.7 Concluding Remarks 127
great demand. The reality is however less bright and shiny. There are not only
technological challenges to offshore mining; it is also trapped in a vicious
circle of uncertain operations, the need for high capital investments and
fluctuating prices for the resources. The target resources for offshore mining
are very scarce in the European basins. On a global level, the European sector
is of importance though, since the EU has some major operators.
A closer look at the sectors reveals the differences in status and poten-
tial. From an economic perspective, the polyphosphate sector is closest to
commercial take off, with high enough and stable prices for the products.
Offshore mining of metals is less promising, given low resource prices and
enormous costs for exploration. Also, the urgency for exploration of new
resources has decreased in recent years. Gas methane mining is in the early
stages of development and development of this sector is inextricably linked to
the development of global energy market. The gas hydrates initiatives are typ-
ically lead by governments. These subsectors seems driven by governmental
interests for control of strategic ore reserves. The polyphosphate sector seems
ready to take the next step in exploitation, licensing and actual exploitation.
However, its operations are now hampered by discussions and uncertanties
on environmental impact and on impacts on other economic sector activities
like fisheries and vulnerable areas like seamounts.
A new balance between sectors with at times conflicting interests has to
be found. Governments and international policy makers (such as ISA) will
need to develop protocols, guidelines and legislation to settle re-occurring
debates. But this is not only a governmental responsibility. In an era of social
corporate responsibility and social licences to produce, the nearshore and
offshore mining sector needs to justify why marine resources need to be
explored and bears responsibility for mitigation of social and environmental
impacts.
3.7.1 Moving Forward

Ore prices are the major incentive for market-driven development. When
especially nickel and cobalt prices will rise structurally, offshore mining on
nodules can be achievable. Further development of the technologies used for
mining can strengthen the sector (Figure 3.10, exploration, collecting, lifting,
on board handling, on land extraction of ores).
Market driven technological development is hampered by the large uncer-
tainties and ample availability of land-based ores and recycling. Today, most
of the exploitation of offshore metal and gas resources is in the hands of
128 Seabed Mining
governmental related companies. Some private enterprises can be found as

well for high grade concessions and for commercially exploitable phospho-
rites. In view of high investment, technological challenges and economic
considerations, private-public cooperation could be an effective means to
make offshore mining a success. The EU and individual governments can
step in here and stimulate the technological and governmental innovations
to achieve lower CAPEX and OPEX and at the same time lower environ-
mental impacts in the sensitive nearshore and offshore seabed and associated
systems.
Further support for the development of offshore mining can also be driven
by the desire to be front-runner in technological development. Extracting
some deposits now, getting acquainted with offshore mining in practice, helps
to develop techniques and earn a reputation in this uncertain field. It can be of
strategic importance to create a first-move advantage, useful when conditions
change and offshore mining becomes profitable.
3.7.1.1 Some considerations

Among the reasons for exploring offshore metal extraction, a potential short-
age of natural resources is often mentioned, due to geopolitical reasons or
limited availability on land. Resource prices are prone to speculation and not
a good indicator for worldwide availability. Various researchers have pointed
at the real danger that resources will be scarce in the future, for example for
phosphate (Gilbert, 2009), and highlighted different national strategies to deal
with future resource scarcity (Bartekova & Kemp, 2016). On the other hand
our analysis suggests the contrary, that there are ample land-based stocks of
economically minable deposits today for at least 30 years and large stocks
which one can expect to become economically minable deposits in due time
(Figure 3.3, Table 3.1, see also USGS, 2017). NB; an important intriguing
aspect is that reserves (economically mineable amounts) appear constant in
amount over time (Arndt et al., 2017). Probably due to reasons of financing
prospecting and research, the market gives little consideration to a reserve life
sufficient to supply more than 20 to 40 years of present consumption (Arndt
et al., 2017). On the other hand there is also the unresolved debate of the dif-
ferences in impacts of land-based mining vs seabed mining, where land-based
impacts are estimated to be substantial. Having at least 30 years of reserves
and an immense amount of resources (Figure 3.3, Arndt et al., 2017, USGS,
2017) implies that there is no direct urgency for offshore mining. On the
other hand, given the fact that some exploration licenses are ending, bodies
like ISA should make steady progress to install the necessary regulations and
References 129
additional preparations in order to enable seabed mining. Regarding nodules,

there appears to be a momentum given a recent workshop16 despite doubts
on profitability.
To add to the discussion, Hannington et al. (2017) pointed out to large
ore reserves of all sorts nearshore. Those nearshore reserves could also pro-
vide the necessary ores at lesser costs. Considering the fierce environmental
discussions about nearshore phosphorites, similar environmental discussions
can be anticipated.
Given the fluctuating market prices, technical risk and uncertain envi-
ronmental impact, private entrepreneurs and companies can be expected to
be hesitant to invest significantly. A coherent and stable European policy to
support offshore mining can benefit society and the sector. Anticipating now
a future need for offshore mining could help in geopolitical stabilisation, be
a technological pull for knowledge developments and incentivize European
exploiters to further develop technologies for offshore mining.
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Chapter · January 2018

Marcel J.C. Rozemeijer S.W.K. van den Burg

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Robbert Gerbrand Jak Karel Van Craenenbroeck

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Marcel J. C. Rozemeijer1,* , Sander W. K. van den Burg1 ,

Faculty of Law, University of Ghent, Universiteitstraat 4,

9031 Ghent, Belgium

3.1.2 Definitions and Demarcation

definitions are introduced here as a general setting and to support the

Offshore mining starts from –200 m downwards. Till –500 m exploitations

3.2 Market – Investigating Market Trends

3.2.1 Market Trends, Product Demand, Prices

In general land-based mining is an inflexible economy. The investments

Figure 3.1 (A) Long term development of nickel https://theconversation.com/queensland-

3.2.1.3 Natural gas

3.2.1.4 A general model

3.2.2 A View of Future Supply and Demand

Republic of Congo), phosphorites (Morocco), as well as gas hydrates (Hein

3.2.2.3 Gas hydrates

3.2.2.4 Potential influence of offshore mining ores

In the case of cobalt (8 thousand tonnes, Ecorys, 2014) the impact on

3.3 Sector Industry Structure and Lifecycle

3.3.1 Worldwide Offshore Resource Distribution

3.3.1.2 SMS deposits

3.3.1.3 Cobalt crusts

3.3.1.5 Gas hydrates

3.3.2 Centres of Offshore Activity

3.3.2.2 National areas

3.3.3.1 Governmental companies

3.3.3.2 Private companies

The companies can be owned or are supported by investments of three

3.3.4.1 Vertical integration

3.3.4.2 Horizontal integration

3.3.4.3 Highly specialised operators

3.3.4.4 Buying in knowledge and reducing risks

3.4 Working Environment

and societal implications of project development, the employment aspects,

3.4.1 Employment and Skills

3.4.2 Rules and Regulations

3.4.2.1 International law

• Determining of ‘preservation reference zones’ (areas in which no mining

3.4.2.2 Domestic law

3.4.3 Societal Impacts and Concerns

3.4.3.1 Possible societal impacts

and knowledge on these poorly known environments, or direct benefits to

3.4.3.2 Societal impact relevant for the EU

3.4.3.3 Mitigation of societal impacts

• Societal changes can be indirect, often of economic/political in nature.

3.4.3.4 Safeguarding financial revenues for the future

3.4.3.5 Safeguarding scientific revenues for the future

3.4.4 Ecological Concerns

3.4.4.2 Potential indirect ecological impacts

3.4.4.3 Mitigation of ecological impacts

3.4.5 Comparing the Impacts of Land-based Mining versus

3.5.1 Lifecycle Stages

3.5.1.1 LCA of nodules, SMS deposits and cobalt crusts