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BFD Expert Voices - Climate Deals

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The new frenzy for critical minerals needed for the energy transition has shined a light on The Metals Company (TMC), which wants to source minerals from the ocean floor. 

Why it matters: The primary challenge facing minerals companies is how to source minerals without inflicting grievous environmental or human harm. 

Context: EV batteries chiefly use lithium, cobalt, copper and nickel, and those prices are soaring.

That price spike, Russia's invasion of Ukraine, China's dominance of critical mineral production, surging global demand for EVs, and ongoing supply chain disruptions from the pandemic have created a rush to find new sources of essential minerals for the energy transition.

Details: Offshore oil and gas production (and offshore wind) has typically been one of the more costly ways of producing energy, at least as far as upfront costs. But not so for critical minerals, TMC CEO Gerard Barron tells Axios.

Potato-sized nodules containing nickel — as well as cobalt, copper, manganese and other metals — line the ocean floor in the Clarion-Clipperton Zone (CCZ), a deep plain between Hawaii and Mexico that's roughly as wide as the U.S.

TMC says these nodules can be mined or "collected" relatively efficiently.

The CCZ is about 1,000 to 1,500 miles off the U.S. West Coast — which, TMC points out, is a fraction of the distance from the U.S. to China.

Yes, but: Five years ago, the Pew Charitable Trusts wrote that a "broad consensus was emerging" that the International Seabed Authority, the regulator that would ostensibly oversee deep-sea mining, should prohibit seabed mining in one-third of the CCZ.

Today, the view from environmental researchers and advocates continues to coalesce around even firmer opposition. The headline on National Geographic's website earlier this month: "Proposed deep-sea mining would kill animals not yet discovered."

A key concern: plumes of sediment kicked up by drilling operations, which might smother creatures along the seafloor.

State of play: TMC maintains that just about every on-land method of producing critical minerals is as bad or worse than its seabed plan.

The world's top two producers of nickel are Indonesia and the Philippines, where nickel mining is destroying rainforests and disrupting Indigenous communities. 

The only U.S. nickel mine is set to close in 2025.

Cobalt supply chains continue to depend on child labor.

And Chinese manufacturing of clean-energy supplies — from solar panels to EV batteries — remains intertwined with slave labor.

What they're saying: "The truth is everything has an impact. If you look at oceans versus land — of course, we’re studying these organisms down to single-cell organisms, because there’s nothing else to study, these organisms are not being studied on land — there is a high rate of discovery," Barron tells Axios. "But there would be a high rate of discovery on land if we were looking through the same lens."

What's next: TMC earlier this month announced an MOU with Epsilon Carbon to study and potentially build a processing plant in India.

The move comes just over a year after TMC's strategic partner Allseas bought a former drilling ship to collect nodules from the seafloor.

The company aims to begin production of the sourced materials by Q1 2024.

The company's stock price is up nearly 13% from the start of the year.

What we're watching: "If we found that the plumes were, you know, traveling thousands of miles and suffocating other ecosystems, and that there was no way of containing them, then that would be a reason to stop," Barron tells Axios. 

Alan Neuhauser co-authors the Axios Pro Climate deals newsletter. Sign up now. 

Deep-sea mining for critical minerals gains momentum

The Metals Company says it's least-bad option for the energy transition.

Illustration of the Metal Company logo floating in the ocean with a seagull on top of it

Mining

The new frenzy for critical minerals needed for the energy transition has shined a light on The Metals Company (TMC), which wants to source minerals from the ocean floor. Why it matters: The primary challenge facing minerals companies is how to source minerals without inflicting grievous environmental or human harm.

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Deep-sea mining for critical minerals gains momentum

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