China could be the first to begin mining for deep sea minerals

October 24, 2019

China has likely taken the lead in the quest to mine the seafloor for minerals such as nickel, cobalt, copper, gold and manganese according to the head of the International Seabed Authority (ISA).

Michael Lodge, ISA general-secretary, who visited China recently, said that if the international rules for exploitation are approved next year China could be among the first to start exploration.

Reuters reported that the ISA has already signed 30 contracts with governments, research institutions and commercial entities for exploration phase, with China holding the most, five contracts.

If the rules are approved, it could take about two to three years to obtain permits to start deep sea mining under the current draft.

The body, which was established to manage the seabed resources by the United Nations Convention on the Law of the Sea (UNCLOS), is aiming to adopt seabed mineral exploitation rules by July 2020.

There is also interest from European countries including Belgium, Britain, Germany and Poland, as well as from the Middle East.

However, no one has yet demonstrated that deep sea mining can be cost effective and some non-governmental organizations have questioned whether it would be possible to reach a deal on exploitation rules next year.

“I think, it’s pretty good. I think the current draft is largely complete,” Lodge said, when asked about prospects of adopting the rules by next July.

One of the issues yet to be agreed is proportionate financial payments to the Jamaica-based ISA for subsea mineral exploitation outside national waters.

“We are looking at ad valorem royalty that would be based on the value of the ore at a point of extraction … The middle range is 4 to 6 percent ad valorem royalty, potentially increasing over time,” Lodge said.

Canadian Nautilus Minerals had tried to mine underwater mounds for copper and gold in the national waters off Papua New Guinea, but it run out of money and had to file for creditor protection earlier this year.

The company announced that it will be able to proceed with a financial restructuring that would allow two of the company’s main shareholders to take control of the company’s assests. This comes after the government of Papua New Guinea elected not to challenge the British Columbia Supreme Court’s decision to disallow a claim by Papua New Guinea for damages in relation to money it paid Nautilus to acquire a share of the company’s sea bed mining project.

Other companies, such as Global Sea Mineral Resources (GSR), a unit of Belgian group DEME, and Canada’s DeepGreen, have also continued technology tests and research.

 

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