Mining the seafloor for key minerals and metals could negatively impact the industry, resulting in $500 billion of lost value and causing estimated to be up to 25 times greater than land-based mining, a new report published Thursday shows.
The quest for substitutes for fossil fuels has increased the need for metals used in the batteries that power electric vehicles (EVs) and in green-energy applications. Minerals and metals such as cobalt, nickel, copper and manganese can be found in potato-sized nodules on the ocean floor. Reserves are estimated to be worth anywhere from $8 trillion to more than $16 trillion and they are in areas where companies, including deep-sea mining pioneer The Metals Company聽(NASDAQ: TMC), plan to target.听
According to the report, entitled 鈥淗ow to lose half a trillion鈥� by non-profit Planet Tracker, extracting metals from the seafloor could cost the mining聽industry $30 to $132 billion in value destruction.
Fran莽ois Mosnier, head of Oceans and report lead author at Planet Tracker, told 九游下载apk this estimate is the result of adding the combined value loss the activity would cause for both ocean floor and terrestrial miners.
鈥淔or the deep sea mining sector, focusing only on polymetallic nodules in international waters, the cost would reach $35 billion-$49 billion of value destruction,鈥� Mosnier said.听
鈥淭his amount was computed based on the estimated invested capital in the sector in 2043 ($115 billion), the industry鈥檚 estimated return on invested capital (-2%) and the industry鈥檚 weighted average cost of capital (WACC) and long-term growth (3%).鈥�
Put simply, the deep-sea mining industry would not beat the cost of the capital it requires to exist, he said.
鈥淏efore factoring in any environmental impacts, the economics already appear uncompelling,鈥� Mosnier said. 鈥淗igh operating expenditures mean that returns will be negative for investors in deep sea mining, which will also destroy value in other sectors, such as terrestrial mining and fishing.鈥�
On top of that, major global banks such , ,听, and聽, Dutch bank聽, and Spanish group聽, have all introduced policies that rule out funding deep-sea exploration and extraction.
The report highlights the positive financial impact of respecting nature as sectors dependent on preserving intact ecosystems have outperformed those exploiting resources threefold over the last three decades.
It also urges investors to focus on nature preservation rather than resource extraction a repeats its call for a moratorium on deep-sea mining.
Ready to start
While the International Seabed Authority (ISA) has yet to set rules for the extraction of minerals and metals from the ocean floor, there already is a country that doesn鈥檛 need to wait: Norway.
The nation secured in December parliamentary majority to go ahead with plans to open the Arctic Ocean to seabed mineral exploration, despite environmental groups and the fishing industry鈥檚 warnings that the move would risk the biodiversity of vulnerable ecosystems.
The European country, where vast oil and gas reserves have made it one of the world鈥檚 wealthiest nations,听plans to search for minerals on its extended continental shelf.
China is another nation, including remotely operated vehicles, vessels, and sonar scanning systems.
Chinese companies, according to the Pentagon, hold more International Seabed Authority contracts (five out of 31 for exploration and development) than any other country.
Opponents to seafloor mining have long-warned that consequences of both exploration and extraction聽of minerals from the seabed are unknown and that more research should be conducted before going ahead.
Those that support the expansion of the activity believe deep-sea mining is central to meeting the increasing demand of mineral growth. The demand for copper and rare earth metals is predicted to grow by 40%, according to聽.听
The agency also expects that the demand share for nickel, cobalt and lithium from clean energy technologies alone will grow by 60%, 70% and 90%, respectively.听
According to a聽聽published in the聽Journal of Cleaner Production, producing battery metals from nodules could reduce emissions of CO虏 by聽70-75%,听 cut land use by聽94%聽and eliminate聽100%聽of solid waste.