New Turmoil in Regulating Deep Seabed Mining on the High Seas

New Turmoil in Regulating Deep Seabed Mining on the High Seas
An aerial view of wooden pontoons equipped to dredge the seabed for deposits of tin ore off the coast of Toboali, on the island of Bangka, Indonesia, May 1, 2021 Photo by Willy Kurniawan/Reuters Tom LaTourrette Douglas Ligor

The still potential-but-perhaps-soon-to-be-real world of seabed mining took an interesting turn in the past month. The announcement from The Metals Company that it “has formally initiated a process…to apply for exploration licenses and commercial recovery permits under existing U.S. legislation, the Deep Seabed Hard Mineral Resources Act of 1980 (DSHMRA)” came just prior to the White House’s issuance of a new executive order authorizing this approach. These announcements mark major course changes. The Metals Company is essentially giving up on the existing international framework to govern and regulate seabed mining in areas beyond national jurisdiction (the high seas), and the United States, which to date has been a largely passive observer of efforts to develop seabed mining, may be about to thrust itself into the center of the action.

Since 1994, the International Seabed Authority (ISA), an independent organization created by the United Nations Convention on the Law of the Sea (UNCLOS), has overseen the management of seabed mineral resources in the high seas. With 169 out of 193 nations plus the European Union as members, the ISA is recognized internationally as the only entity with jurisdiction over the high seas.

Conspicuously absent from the ISA membership list is the United States, the only developed economy that has not ratified UNCLOS. The U.S. Senate has steadfastly opposed UNCLOS and the ISA, primarily out of concerns over sovereignty. For decades, this was viewed by many as a handicap, as it sidelined the United States in ISA negotiations to develop seabed mining regulations and made the United States ineligible to conduct mining operations through the ISA process. In this position, the United States has been a relatively minor player in the world of seabed mining—no U.S.-based companies have ISA exploration contracts, and the U.S. government has taken a cautious, wait-and-see approach.

However, the Trump administration has changed all this with its new executive order. After years of waiting for the ISA to develop mining regulations, The Metals Company, a Canadian seabed mining start-up eager to get started, got fed up and approached the Trump administration about exercising DSHMRA, a largely neglected statute implemented in pre-ISA times. The ISA secretary general has stated (PDF) that “any unilateral action would constitute a violation of international law and directly undermine the fundamental principles of multilateralism, the peaceful use of the oceans and the collective governance framework established under UNCLOS.” But because the United States has not ratified UNCLOS and has opposed aspects of the ISA framework from the beginning, whether or not it is a violation of international law for the United States to sidestep the ISA process and forge ahead unilaterally is a matter of considerable debate.

If the United States proceeds down this path, it will have some important geopolitical implications:

  • While the United States has not ratified UNCLOS, it has signed it, and it has pledged to recognize it as customary (i.e., binding) international law. So, proceeding outside the ISA process would be a bold challenge to international law and could further isolate the United States in the realm of seabed mining and resource distribution. It is even conceivable ISA member states will treat U.S.-mined nodules and products as illicit, similar to that manner in which conflict minerals are treated.
  • This also could open the door for other nations to similarly go it alone, despite being ISA members. China has flouted international law in the South China Sea and has actually interfered with seabed mining explorations in the past, so it may not take too much to embolden China to sidestep and/or withdraw from the ISA as well. In the worst-case scenario, other countries follow suit, rendering the ISA greatly weakened or defunct. The geopolitical consequences of this could be disastrous, increasing contestation and the possibility of conflict.
  • What becomes of the rights of The Metals Company’s sponsoring states under their ISA contracts? The Metals Company has invested heavily in exploration and environmental assessment in contract areas sponsored by Nauru and Tonga. Choosing a new location would mean starting from scratch, so it presumably intends to mine these same areas under the U.S. regulatory regime. Do Nauru and Tonga retain their rights to explore and perhaps eventually mine these areas under their ISA contracts? How would operations under competing regulatory regimes be deconflicted? Further, The Metals Company has enabled some of the very few developing nations’ involvement in seabed mining, an important element of the ISA’s design and mission; putting Nauru and Tonga on hold may risk undoing valuable progress in supporting developing nations’ access to the value of seabed mineral resources.

The widely touted promise of seabed mining is that it would open up new sources of supply of metals to meet skyrocketing battery demand in a way that bypasses existing supply chains dominated by China. Yet China is so dominant that it controls nearly all of the world’s nickel and cobalt processing capacity, meaning that whoever does the seabed mining will likely have little choice but to send their nodules to China for processing. If that happens, the opportunity presented by seabed mining, regardless of the regulatory regime under which it is conducted, to diversify critical mineral supply chains might be lost as China dominates yet another dimension of mineral supply.

So, the United States and its allies must focus not just on locating new supplies of metals through seabed mining, but also on standing up capacity to process polymetallic nodules. The technology is not simple, the capital costs are high, and it takes time; the language in the new executive order encouraging this is a good start.

– Tom LaTourrette is a senior physical scientist at RAND. Douglas Ligor is a senior behavioral scientist at RAND. Published courtesy of RAND

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