Deep Seabed Mining Isn’t Worth The Financial Risk

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Help us spread the word about The Ocean Foundation’s newest report!

Deep Seabed Mining Isn’t Worth The Financial Risk is a new report from The Ocean Foundation that provides the most comprehensive assessment to date of the extent to which the industry is economically viable, revealing unrealistic financial models, technological challenges, and poor market prospects that gravely undermine its potential for profit. The below toolkit features key messages, social media graphics, and other resources to help spread the findings of this new report.

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With the environmental risks of mining the deep sea already well documented, our new report provides the most comprehensive assessment to date of the extent to which the industry is economically viable, revealing its unrealistic financial models, technological challenges and poor market prospects that gravely undermine its potential for profit. Help us get the word out by sharing this content on your social media platforms!

Key Messages and Takeaways from the Report

Unrealistically optimistic financial models ignore major technical difficulties in extraction at unprecedented depths  below the surface, a volatile metals market, and macroeconomic trends.

  • Demand fluctuations may affect the industry’s ability to sell DSM products, as business models rely on expected growth in demand for EV minerals. A report commissioned by the International Seabed Authority (ISA) found that there is high uncertainty around prices for commercial metals once contractors begin production, leading to the possibility that relatively high-cost minerals from the seabed are not competitive, and thus generate little or no profit.
  • There would be a large up front operational cost associated with DSM, on par with highly industrial extractive industries including oil and gas. It is unreasonable to assume DSM projects would fare better than standard industrial projects, two-thirds of which go over budget by an average of 50%.
  • Routine due diligence on the operational or processing aspects of proposed DSM may prove difficult, as much remains undefined or speculative.

Seabed minerals are not, as mining companies quip, “a battery in a rock”.

  • Polymetallic nodules contain only four economically attractive minerals: nickel, cobalt, manganese, and copper. DSM proponents speak of supplying cobalt and nickel to the electric vehicle industry, an industry that is rapidly moving away from cobalt and from nickel toward new battery chemistries such as lithium iron phosphate (LFP). 

Innovation design for the energy transition, including batteries, is moving away from minerals found on the seabed. In tandem with the growing circular economy, this will likely render DSM unnecessary.  

  • New chemistries for electric vehicle batteries and reducing dependence on lithium-ion batteries for non-moveable uses could reduce the demand for cobalt, nickel, and manganese by 40-50% between 2022 and 2050.
  • Currently, just 8.6% of the world’s materials are part of a circular economy, but by 2050, researchers predict 45–52% of cobalt, 22–27% of lithium, and 40–46% of nickel could be supplied from recycled materials.

Potential Costs and Liabilities are exacerbated by known and unknown threats in all aspects of DSM, making return on investment uncertain. These threats take the form of:

  • An unfinished regulatory scheme that – in its draft form – is rife with high costs and extreme liabilities and is overseen by a problematic regulator.
  • Reputational concerns associated with front running DSM companies that may jeopardize investment.
  • While damage to the ocean and its ecosystem is guaranteed, who will pay that damage and how much it will cost is undefined
    • A 2022 report estimated “the total biosphere impacted by nodule mining in abyssal plains in international waters alone would be up to 25–75 million km3, more than the volume of all freshwater in the world, including ice and snow.”
    • A study published in May 2023 analyzed more than 100,000 records of animals in the Clarion Clipperton Zone (CCZ), (the primary target of DSM at the time of this report writing), and found over 90% of species from the records were unknown to science.
  • Lack of social license (Indigenous opposition, human rights concerns), misleading comparisons to terrestrial mining and overstated Environmental, Social, and Governance (ESG) claims.
    • Environmentalists, scientists, cultural leaders, and individuals are showing their support for the value of the deep sea before an untested extractive industry begins commercial production of a nonrenewable resource.

Front runner company The Metals Company (TMC) has not factored risk or actual damages from environmental spills nor protests (with their attendant costs and liabilities), giving potential investors and decision-makers, an incomplete picture.

  • Originally, when TMC was first listed on the U.S. stock exchange, civil society argued that its prospectus did not sufficiently disclose risks; the Securities Exchange Commission agreed, and required TMC to file an update.

International pressure is building to halt DSM: the decision-making body of the International Seabed Authority has said there should be no DSM without regulations; major companies, Indigenous people, civil society, and scientists are calling for a moratorium; and banks, financial institutions, and insurers are rejecting investment in DSM.

  • 24 countries have called for a ban, moratorium, or precautionary pause.
  • 39 companies have signed onto a business statement indicating their commitment to not invest in DSM, allow for mined minerals to enter their supply chains, and to not source minerals from the deep sea. These companies include Google, Samsung, Philips, Patagonia, BMW, Rivian, Volkswagen, Salesforce, etc. and their signature commits them to support a moratorium, not source minerals from the deep seabed, exclude those minerals from their supply chains, and not finance DSM activities.

Hashtags/Accounts

#DSMisNotWorthTheRisk
#DSMFlawedFinance
#DivestDSM
#DefendTheDeep

The Ocean Foundation

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Check out the newest @oceanfdn report: Deep Seabed Mining Isn’t Worth The Financial Risk: https://bit.ly/4bPvySp
#DSMisNotWorthTheRisk #DSMFlawedFinance #DivestDSM #DefendTheDeep

Check out @oceanfdn’s latest report: Deep Seabed Mining Isn’t Worth The Financial Risk. Dive in to uncover the unrealistic financial models, technological challenges, and poor market prospects that make DSM economically unviable. #DefendtheDeep https://bit.ly/4bPvySp

Long, best for Instagram, LinkedIn, Facebook:

Check out the newest The Ocean Foundation report!

Deep Seabed Mining Isn’t Worth The Financial Risk is a new report that provides the most comprehensive assessment to date of the extent to which the industry is economically viable, revealing:
– unrealistic financial models, 
– underappreciated technological challenges and 
– poor market prospects that gravely undermine its potential for profit.

At the same time, innovation is leading industry toward rapidly emerging alternatives to minerals found on the seabed via
– Better batteries that don’t use minerals from the seabed, and
– The promises of a circular economy.

Our conclusion? We agree with 24 countries, 39 corporations, and thousands of Indigenous leaders and civil society voices to #DefendtheDeep and that #DSMisNotWorthTheRisk
https://oceanfdn.org/wp-content/uploads/2024/02/dsm-finance-brief-2024.pdf

Don’t forget to @ tag us!

Press/Contacts

Check out our press release for more information!
https://oceanfdn.org/new-analysis-business-case-for-deep-sea-mining/

Thanks for helping us share the word that #DSMisNotWorthTheRisk!

PRESS

Kate Killerlain Morrison
External Relations Director
[email protected]
202-318-3178

Deep Seabed Mining

Bobbi-Jo Dobush
Legal Officer
bdob[email protected]

social media

Eva Lukonits
Social Media Manager
eluk[email protected]

Learn More

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Bobbi-Jo Dobush speaking at “An Update On Electric Vehicle Battery Trends, Recycling, And Economics Of DSM” panel event on the financial risks of DSM. Photo by IISD/ENB - Diego Noguera

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