By
Zohan Tariq
Africa-Press – Mauritius. The world’s oceans have long been a source of riches that help sustain human civilization. Since antiquity, fishing has played an essential role in global food security, and over 3 billion individuals today derive a significant amount of their animal protein intake from fish. In more recent times, offshore oil and gas help stabilize the world’s energy system. In the future, the oceans may again play a role in supporting resource security by providing a potential alternative source of minerals that are crucial for energy and defense technologies.
The resilience and diversification of mineral supply chains have become significant topics of concern in recent times. Demand for elements such as lithium, nickel, copper, and rare earth elements is projected to rise exponentially over the coming decades as the rollout of low-carbon energy technologies such as wind turbines, electric vehicles, and battery storage systems accelerates. Rising global tensions in recent years and subsequent increases in military spending are also likely to spur demand for metals such as nickel, cobalt, and manganese, which are key inputs to defense and aerospace technologies.
At present, China maintains a dominant role in the supply chains for many of these mineral commodities and has been willing to leverage this status as a tool of economic statecraft.
As nations seek to fortify their mineral supply chains and minimize dependence on China, seabed mining appears as a potential solution. Among the several kinds of seabed mineral deposits, polymetallic nodules have received the most interest, with the International Seabed Authority (ISA), the body that governs resource extraction in the high seas, reporting 19 separate exploration efforts since 2001. These nodules are rich in minerals such as cobalt, nickel, manganese, copper, and other elements that are key inputs to low-carbon technologies. The estimated quantity of these critical minerals in just one nodule field, the Clarion-Clipperton Zone in the northeastern Pacific Ocean, exceeds all known global terrestrial reserves. Significantly, while terrestrial mining operations for some of these elements are dominated by Chinese firms, the bulk of these deposits lie in international waters, opening an opportunity to develop an alternative supply chain for these minerals that is not dominated by competitor nations.
In this context, interest in seabed mining is growing. Although the ISA has yet to finalize and implement a regulatory regime to govern mineral extraction, over 20 contractors have received contracts to explore the international seabed for minerals. These contracts require sponsorship by an ISA member state. Current sponsors include both developed economies and small island states such as the Cook Islands and Nauru, which are expected to benefit from potential royalties in the future. The delay in the establishment of a regulatory regime has also not deterred potential miners from developing plans. Our recent RAND report shows that firms are developing extraction techniques involving tethered or untethered vehicles to collect the nodules on the seabed and transfer them to a “mother ship” on the surface. These technologies have not yet been commercialized but have completed successful demonstrations in deep-water conditions.
The question of processing these nodules has received less attention. Our research found that although several of these miners are interested in gaining a share in the downstream elements of the value chain, presently there are no existing commercial-scale processes for processing and refining nodules into inputs for battery manufacturing. In the near term, these firms plan to partner with existing pyrometallurgical nickel processors in a tolling arrangement, where they would retain ownership over the processed minerals, allowing them to recoup greater value than by selling the raw nodules. In the long term, they plan to use the revenue and experience gained through these early-stage activities to develop dedicated nodule processing infrastructure.
Under these circumstances, there is little indication that seabed mining will solve the primary chokepoint in the mineral value chain: China’s dominance in midstream processing. According to the International Energy Agency, China produces 45% of global refined copper, 35% of refined nickel, 78% of refined cobalt, and 95% of refined manganese. Furthermore, although Indonesia is the largest producer of refined nickel, much of this production originates from smelters and refineries with significant ownership by Chinese companies.
Many of the miners we spoke to were reluctant to partner with Chinese processors. The general impression among miners was that partnership with Chinese firms was characterized by unattractive business terms, requirements to cede ownership of the nodules, concerns over China’s designation as a Foreign Entity of Concern (FEOC), and conflict with the companies’ founding visions and desires to contribute towards supply chain diversification. However, firms admitted that they had been subject to aggressive outreach by China, and, given the low costs and dominance of Chinese processors in the value chain, they continue to entertain these partnerships as an option if other avenues fail to materialize.
Historically, attempts to establish domestic processing infrastructure have encountered challenges such as lengthy permitting timelines, competition for feedstock, lack of price competitiveness against global competitors, and low investor interest due to market volatility. Recent policy actions, however, are attempting to chip away at these barriers, potentially facilitating both terrestrial and seabed mineral efforts. The Trump administration’s executive order on Unleashing American Energy directs relevant agencies to streamline permitting processes that impose undue burden on mining or processing projects and directs the Department of Defense and Department of Energy to explore stockpiling of seabed mineral resources. The U.S. Export-Import Bank established a Supply Chain Resilience Initiative to develop projects in foreign countries that supply U.S. companies, including midstream processors. The Biden administration also imposed tariffs in 2024 on imports of critical minerals, batteries, and other components from China, while the Trump administration proposed tariffs on inputs such as graphite to counter alleged dumping by Chinese producers.
Further policy action, such as price support mechanisms (analogous to the price floor for rare earths that the Department of Defense recently offered to MP Materials), supporting offtake agreements between processors and downstream industries, and continuing to provide grants, loans, loan guarantees, and tax credits to assist with capital and production costs, could bolster the development of domestic processing capacity even further.
Recent activity suggests increasing interest by both the White House and private companies in developing seabed mineral resources within U.S. waters. However seabed mining unfolds, its potential to diversify supply chains will be constrained by the midstream until adequate processing infrastructure is established in domestic or allied jurisdictions. The recognition of these challenges and the beginning of efforts to mitigate them are heartening; however, much more needs to be done before the seabed can help secure America’s supply chains.
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