Next week, delegates from 169 countries, NGOs representing civil society, and other experts will gather in Kingston, Jamaica to continue the work of developing a set of rules governing how the minerals of the deep sea, which fall beyond the borders of any nation, can be exploited, ostensibly for the Good of Humankind. In many ways, this gathering, the first in which a draft mining code could conceivably be voted on, will be the most consequential meeting in the International Seabed Authority’s 29 year history.
The ISA is a complex organization with many moving parts, but the supreme decision-making body is the Assembly. This July will be the first time the Assembly has gathered in almost a year, and the first opportunity for motions, resolutions, and proposals to be voted into policy. It is also an election year, with the role of Secretary-General, an administrative position which has wielded outsized influence over the last 8 years, up for grabs.
What has changed since last spring?
Three significant shifts have occurred since the convening of the spring ISA session.
After Brazil nominated Leticia Carvalho to serve as the next Secretary-General of the ISA, many observers noted that it was strange that the current Secretary-General, Michael Lodge, had not be renominated at the same meeting. This was ultimately clarified after the meeting’s close, when the United Kingdom, Lodge’s home country, declined to nominate Lodge for a third term. The Republic of Kiribati ultimately stepped up to advance Secretary-General Lodge’s nomination, marking the first time in ISA history that a member state nominated a non-citizen for Secretary-General.
Secretary-General Lodge has had a rough few months. He was prominently featured in the Last Week Tonight feature on Deep-sea Mining, and not particularly favorably. More recently, the New York Times reported on accusations of corruption and bribery with the ISA, including a well-sourced accusation that Lodge had coordinated offering a job at the Secretariate to Carvalho if she dropped out of the Secretary-General election. Lodge has released a statement through the ISA as well as in his personal capacity, denying some of these allegations.
The election of Leticia Carvalho would represent a significant shift in priorities for the ISA and while I’m skeptical that the Authority as a whole desires a leadership change at this critical juncture, potential financial and ethical impropriety cannot be overlooked. The International Seabed Authority is in the midst of a transition from an agency that has been largely ignored for most of its 3 decade history to one of the most scrutinized industry regulators in the world, and it needs a Secretary-General who takes that role seriously.
It’s extremely unlikely that a final mining code will be approved at this meeting. Most stakeholders are looking towards summer 2025 at the earliest with 2026 or 2027 to be more likely. Despite significant progress on the environmental regulations, I still think it is the financial payment regime that will end up being the ultimate roadblock to a finalized mining code. The Metals Company has indicated that, whether or not the code is approved, it intends to submit an application to mine its NORI-D prospect. Without a mining code, the Legal and Technical Commission and the ISA Council will have to review that application on its own merits and with respect to any prevailing guidelines, standards, and best practices.
For what it’s worth, The Metals Company (and DeepGreen before that) have made informal suggestions that they were planning to submit a plan of work at past meetings going back to at least 2019. Whether or not they do formally at this meeting or after will have a lot to do with the prevailing political winds sweeping through the meeting. Some member states that serve on the Council have suggested that they would reject any application priori to a finalized mining code and The Metals Company certainly doesn’t want to see their first application for a deep-sea mine fail.
There have also been significant moves on the national stage. The US is making some tepid moves towards incentivizing nodule processing in the country and the perennial call to ratify UNCLOS has been issued (I don’t want to squash anyone’s optimism, but there’s no chance of that happening with this Senate). Hawaii banned seabed mining in it’s state waters. Meanwhile, Norway is ramping up for a serious push into deep-sea mining of seafloor massive sulphides in its EEZ.
Everything I was watching for at the spring meeting is still in play, but with the Assembly gathered, there’s a potential for decisions to be made.
- What I’m watching for at this month’s ISA meeting: How the Council responds to the NORI-D Incident
- What I’m watching for at this month’s ISA meeting: How are pro-moratorium member states dealing with their own mining leases?
- What I’m watching for at this month’s ISA meeting: untangling the financial regime
- What I’m watching for at this month’s ISA meeting: How to Value Cultural Heritage on the High Seas?
- What I’m watching for at this month’s ISA meeting: The Vibes
I expect to see a few more member states come out in favor of a ban, moratorium, or precautionary pause. I expect to see a vigorous debate about whether or not the Council is obligated to approve a plan or work or if they can reject it. I expect some grandstanding over Greenpeace’s protest actions in the CCZs without much resolution. And I expect the embattled Secretary-General to be re-elected for a third term, though I am less confident in that outcome now than I was 2 weeks ago.
Surprising things could still happen. The UK, India, and France have just had significant elections which could result in policy changes regarding deep-sea mining.
Is the financial benefit even worth the risk?
All of this is happening against the backdrop of ongoing surpluses for the 3 primary metals that deep-sea mining contractors hope to exploit. Though it has slowly shrunk over the last year, Nickel remains in a historic surplus. Nickel prices were climbing steadily in the beginning of the year, but have fallen precipitously since May, bottoming out around $17,000. Indonesia has cut its output of nickel ore. Cobalt is experiencing a similar surplus and cobalt prices have been in a long slump. Cobalt is down to $27,500 per ton, a 66% decline from its high of $81,000 per ton in early 2022. Manganese has always been trickier to pin down, but it has also experienced a bit of a slump and is currently down about 17% year over year.
At the beginning of the Spring meeting of the 29th Session of the International Seabed Authority, we pegged the current valuer of a hypothetical polymetallic nodule mine in the Clipperton Clarion Zone, based on the ISA’s financial model, at $1.66 billion, about a billion dollars off from the projection circulating when Nauru and the Metals Company invoked the 2-year trigger to expedite the mining code. Since then, at today’s prices, the value of this hypothetical 3-megaton mine has lost another $300 in value.
Metal markets are extremely volatile, but deep-sea mining is in a race against evolving battery technologies, and the demand for these metals is far from predictable.
Are We Just Moving the Deep-sea Mining Goalposts?
I get accused, occasionally, by friends I respect in the industry, of moving the goalposts for deep-sea mining. At the beginning of 2020 I felt a finalized mining code was about 3 years away, and here, in 2024, I still think 3 years for a finalized mining code is a reasonable expectation. And I don’t think that’s a moving the goalpost problem, I think that’s a leadership problem.
In February of 2020, several delegations at the 26th Session of the ISA, including China (who couldn’t field their regular delegation because of quarantine restrictions and instead sent a stand-in delegation from their New York mission), raised a critical point: this Coronavirus thing looked like it could be pretty bad and we should explore ways to conduct the negotiations remotely. I was in the room when a very dismissive Secretary-General announced that the Secretariate did not have the capacity to host remote meetings and didn’t have the capacity to entertain any formal negotiations outside of Kingston, Jamaica.
The ISA wouldn’t convene again until 2022.
I think the Secretary-General of the International Seabed Authority has one of the most important jobs in the world, and the outcome of these negotiations will set the precedent for exploiting resources beyond national boundaries on this planet and beyond. The next few centuries of resource extraction will be decided by a few hundred people in a wood-paneled room in Kingston, Jamaica.
I’m hard on Michael Lodge. I don’t think he has the vision to get us to the best possible deep-sea mining code. I think he has a cozy relationship with contractors and an adversarial approach to environmental NGOs and the media. I think he’s gotten comfortable in a position that, until recently, has not been in the spotlight and is unprepared for the amount of scrutiny that comes with being the regulator of the first industry to commercialize mineral resources beyond national borders. And I think that one decision, to shut down any entertaining of a discussion on remote meetings in February 2020, probably cost the ISA three years of productive negotiations.
In the interim, there have been major shifts in metals markets, in geopolitical stability, and in public support and opposition to the industry. 2022, with cobalt and nickel reaching historic highs, could have been the year to get the deep-sea mining code done, instead of playing catch-up as deep-sea mining opposition coalesced around a shared message. A mining code in 2025 or 2026 seems less like a moved goalpost than it does a failed opportunity.
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