Just over a century ago, oil was discovered in the Middle East. This fueled the worldwide adoption of combustion vehicles, the most significant transportation trend of the 20th century. It transformed the region, sometimes for good, often for bad. What can’t be denied is that oil has created enormous wealth, and planted the Middle East at the heart of geopolitics for decades.
The most important transportation trend of the 21st century will be the widespread adoption of electric vehicles (EV). By 2033 Ernst & Young estimates that sales of EVs will outpace traditional combustion vehicles. To power this next revolution, the world does not need oil. Instead, it needs rare metals like nickel, copper and cobalt - the building blocks for EV batteries. Demand for these metals is skyrocketing. Supply however is struggling to keep up, and land-based mining for these metals is creating environmental and social issues.
The Pacific Islands might just have a solution.
Tonga, Nauru, and Kiribati have all signed sponsorship deals with The Metals Company, formerly known as DeepGreen - a Canadian organization that claims to have a less damaging way to mine rare metals from rocks sitting on the seafloor.
The sponsorship deals give The Metals Company exploration rights to 224,533 square kilometers of seabed in the Clarion Clipperton Zone (CCZ), home to the planet’s largest known deposit of polymetallic nodules. These potato-sized rocks contain cobalt, nickel, manganese and copper, all crucial for the manufacturing of EV batteries. The Metals Company plans to start mining in 2024.
Polymetallic nodules on the seafloor. Credit: DW.com
The nodules in the CCZ are estimated to contain enough rare metals for 280 million EVs, according to the company’s CEO. That’s more than a quarter of all cars currently in theworld, and plenty enough to satisfy our double cab ute needs.
The financial stakes are enormous. The Nauru-sponsored exploration area, about a third of the total area The Metals Company is exploring, is alone estimated to contain nearly 900 million tonnes of polymetallic nodules. The price of a polymetallic nodule is around $500 USD a tonne.
That’s an estimated USD $450 billion worth of rare metals. The GDP of the 11 small Pacific states put together is barely 2% of this amount.
‘The Nuclear Option’
There are major economic and environmental issues that need to be worked out before deep sea mining begins. Complicating matters is the fact that the Clarion Clipperton Zone lies in international waters, and is governed by the International Seabed Authority (ISA). The ISA functions similarly to the United Nations, with member states voting on proposals and setting rules that govern the ocean.
These member states will not only have to reach agreement on how to mine while keeping the environment safe, but also resolve how royalties will be split between themselves. The ISA claims that royalties will be shared evenly with special emphasis on distribution to developing countries. There is scant detail however about whether sponsor countries like Tonga will receive a greater proportion of royalties, or how private companies will be compensated.
Sponsor liability also poses a risk to the Pacific community. Were The Metals Company to cause an environmental disaster, the sponsor countries would be left liable to the international community for damages. This might be an acceptable risk in exchange for billions in mining revenues but, as it currently stands, the Tongan, Nauru and Kiribati public have no way to know if they’re getting a fair deal.
The ISA has worked for seven years to try to resolve these issues with member states, without success. Nauru, our Pacific neighbor with a population the size of Gore, forced the issue recently by initiating the ‘nuclear option’. The triggering of this rule means that the ISA must allow mining in the Clarion Clipperton Zone within two years, with whatever regulation is finalised by the end of this period.
Tension in the Pacific
The possibility of deep sea mining in the Pacific has led to concern from scientists and environmentalists, who fear that the effects on wildlife biodiversity and ecosystems are not yet well understood.
It’s also causing a rift among Pacific neighbours. Fiji, Vanuatu and Papua New Guinea all support a 10 year-moratorium on deep sea mining while its impact on the environment is further analysed. The Cook Islands on the other hand has opted to open-up deep sea mining in its Exclusive Economic Zone.
This is not your typical environment vs economy argument however. Traditional deep sea mining for oil and gas is easy to oppose on environmental grounds - the BP oil spill was an environmental disaster caused by demand for a resource that by itself is a disaster for the environment.
Mining for polymetallic nodules would look quite different to the deep sea well at the centre of the BP disaster. Instead of drilling down into the seafloor, The Metals Company claims it will disrupt only the top 5 centimeters of ocean sediment through machines called ‘collectors’. Using jets of seawater, the nodules would be lifted and collected inside the machine. Any sediment collected during this process would be redeposited to the seafloor.
This would cause some harmful environmental impacts. Ocean life found in the sediment where the company plans to mine would be disrupted, something The Metals Company acknowledges. The secondary-effects this disruption would have on the larger ocean ecosystem is currently being studied. Overall however, the net environmental impact is likely to be significantly less than traditional oil and gas mining.
One of The Metals Company’s ‘Collectors’
The Environmental Solution?
When it comes to rare metals for electric vehicles, there’s also a strong case that there may be environmental risks of not mining.
Twenty percent of all greenhouse gases worldwide come from the transport industry. Electric vehicles represent our best opportunity to reduce these emissions, particularly when powered by clean energy sources. Yet, we’ve already seen serious concerns about rare metal shortages. The International Energy Agency warned that the world won’t be able to tackle climate change unless there is a sharp increase in the supply of rare metals to power solar panels and electric cars.
Dismissing deep sea mining entirely risks exacerbating these supply issues, slowing down the manufacturing of electric vehicles and keeping emissions higher for longer.
Increased emissions would further warm the oceans, harming the very wildlife and ecosystems that environmentalists are trying to protect. It would also increase the risk of rising sea levels, posing an existential threat to the Pacific and its people.
Alternatives to increase rare metal supply are limited. Land-based mining has horrific environmental and social outcomes, with links to the destruction of rainforests in Indonesia and child labour in Congo. Recycling is an important part of the solution, but alone will not be sufficient, especially given the high cost and potential for environmental damage by itself.
When viewed through this lens it’s possible to understand the positions of Nauru, Tonga, Kiribati and the Cook Islands. Economically, mining could lift them from poverty to standards of living never thought possible. Environmentally, it might actually help preserve their ocean biodiversity if it reduces carbon emissions and the correct environmental protocols are put in place. Existentially, permitting mining allows them to hasten the green transport transition - potentially ensuring their very survival as countries.
The Pacific has long been a victim of other countries’ choices. It’s been a canvas for nuclear weapons, a playground for colonialism, and has already suffered some of the worst effects of climate change.
If the environmental and royalty issues around deep sea mining can be resolved - a big if - the region may be on the verge of a new future. A future where small Pacific nations become big ocean states and hold outsized influence not just over electric vehicle markets, but also over the fate of their own lands.