In the race to mine the seabed, China takes a hard line

The ISA’s 36-nation policymaking body, known as the Council, convened at ISA headquarters in Kingston, Jamaica, to discuss whether the organization will begin accepting mining applications from companies. Its conclusion was ‘not yet’: Most delegations said they wouldn’t approve any applications until the ISA puts mining regulations in place. The session ended with an agreement to work “with a view” to adopting such regulations in 2025, but didn’t set a binding deadline.

The summit’s final days were characterized by a clash between China, which favors seabed mining, and a growing alliance of countries calling for a moratorium or pause due to a lack of scientific knowledge about the deep ocean ecosystems being targeted.

While a legal framework for mining has been in the works since 2016, tensions among the ISA’s 168 member nations (and the European Union) started rising in 2021. That’s when the Pacific island nation of Nauru kicked off a contentious countdown by triggering a rule requiring regulations be enacted within two years. The ISA missed that deadline on July 9, 2023, one day before the Council meeting. Technically, that means it must start accepting applications.

Nauru is the ISA state sponsor of The Metals Company (TMC), the Canadian-registered firm most immediately impacted by the irresolution at this month’s summit.

All mining companies must be sponsored by an ISA member state, which is obligated to ensure their compliance with regulations and can in turn collect royalties and fees. Nauru invoked the two-year provision shortly after TMC executives told potential investors they expected to begin mining in 2024 for minerals used in EV batteries. When TMC went public in 2021, securities filings show it expected to earn $95 billion from one area of its Nauru contract area over 23 years and estimated it would pay 7.6% of those revenues in royalties to Nauru and the ISA.

Nauru and TMC overplay their hand

The 1982 UN Convention on the Law of the Sea established the ISA to regulate the exploitation of the seabed in international waters, and to ensure the effective protection of the marine environment. The treaty declared the seabed to be the “common heritage” of humankind, with royalties and other benefits from deep sea mining shared among member nations.

Since then, the ISA has issued 31 exploration licenses to mining contractors, including two to TMC, but none of those companies are allowed to begin mining.

At this month’s Council meeting, some members argued that invoking the two-year rule contravenes the ISA’s mission, forcing it to prioritize the financial interests of Nauru — a country of 8,000 people — and one private company. Investigations by Bloomberg Green and other news organizations have revealed TMC’s influence over Nauru as well as the closeness between the Secretariat, the ISA’s administrative arm, and the companies the Authority regulates.

“We must not privilege the economic interests of a few because this is the world future generations will have to live with,” Costa Rica delegate Gina Guillén Grillo told the Council.

Nauru and China, meanwhile, pressed for a firm deadline to adopt regulations. During closed-door Council negotiations, eyebrows were raised when Nauru’s delegate huddled on the sidelines with a TMC executive as well as ISA Secretary-General Michael Lodge, who leads the Secretariat, and Secretariat chief of staff Marie Bourrel-McKinnon. Also present was a former Secretariat legal officer, Chris Brown, who is now an advisor to Nauru and traveled to Kingston as part of the country’s delegation. (In June, the head of the Secretariat’s compliance unit joined a Norwegian deep sea mining company that holds ISA exploration contracts.)

China throws its weight around

The question of how to proceed with deep sea mining applications in the absence of environmental safeguards also roiled a gathering of the ISA’s Assembly, which is the Authority’s “supreme organ.” The Assembly includes all 168 member states and met for a week after the conclusion of the two-week Council session.

Although the Assembly is the ISA’s final arbitrator, its gatherings tend to rubber-stamp Council decisions. Last week, however, China upended that comity by refusing to allow discussion on a proposal by Chile, France, Palau and Vanuatu to prohibit the approval of any mining licenses until regulations are in place. China holds five mining contracts, the most of any country.

Other pro-mining nations, such as Russia and Japan, seemed to see the proposal as a backdoor way of bringing a mining moratorium up for debate. Because the Assembly’s agenda must be adopted by consensus, China prevented it from taking action on the ISA budget and other unrelated items until the prohibition proposal was nixed. “This specific issue is not suitable to be discussed at this session of the Assembly,” China’s delegate, Wenting Zhao, said on Friday after five days of deadlocked negotiations. In the final minutes of the session, China said the proposal could be included on the provisional agenda for the Assembly’s next conference in July 2024.

Pradeep Singh, a fellow at the Research Institute for Sustainability in Germany who studies the ISA and attended this month’s meeting, says China could try to play hardball again next year. “But it’s quite clear that states are concerned about mining and want to have a discussion of whether protection of the environment can be ensured,” he says. “Next year China may not be in such a position to throw its weight around.”

A de facto pause on deep-sea mining

After three weeks of open discussion and closed-door negotiations, the ISA is only slightly farther than where it started. TMC and other mining contractors are free to apply for mining licenses, but the Council is highly unlikely to approve them absent regulations. The Council may be working with a view to finishing those regulations in 2025, but in practice member nations remain far apart on critical issues, like establishing a royalty rate for mining and developing a mechanism to share those benefits.

Meanwhile, as the ISA met more member states joined the call for a moratorium or pause, including Brazil, Canada, Ireland, Finland and Portugal. Quack Pirihi, 21, of New Zealand, was among those who traveled to Kingston with Greenpeace International to advocate for a moratorium.

“As an indigenous person from Aotearoa I want to shed light on the significant value of my connection to the deep sea,” he told the Assembly on Friday. “It is imperative to acknowledge its significance, and why a prohibition on deep sea mining is the only viable solution to safeguard our collective ocean.”

In total, 20 nations have joined the call for a moratorium or a pause while France has demanded a ban on deep sea mining. Singh notes that because the Council must adopt regulations by consensus, a single nation could scuttle a deal if it objects to rules it considers insufficient to protect the deep ocean. “Even though some states don’t like to place a label on it,” he says, “we have already arrived at a pause.”

(By Todd Woody)