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In a dramatic moment at the ISA, CEOs of two mining contractors take the floor. Photos courtesy ISA.
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The Five Most Talked about Moments from the ISA General Council Meeting
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It was a cool week in Kingston as representatives from member states, observers, NGOs, and other stakeholders gathered at the International Seabed Authority to continue the quarter-century-long process of guiding mineral extraction in the high seas towards production. Discussions were broad in vision, focused in scope, and soberingly detailed. While everything from the percentage points of the financial model to the specific technologies that would be used to monitor an extractive enterprise in the deep ocean was on the table, a few topics caught the attention and drove the ongoing conversation on and off ISA’s campus, for contractors, delegates, and NGOs alike.
1. The Financial Model Takes Center Stage
In the lead-up to the General Council meeting, an open-ended informal working group was held to advance discussions on the financial model. Experts from MIT prepared a report on the various models under consideration. This workshop report forms the foundation on which the financial model—the mechanism through which profit-sharing among the Enterprise and member states is manifested—was to be discussed. Algeria, on behalf of the African Group expressed their frustration that African members as well as many developing states were not included in the workshop, which was help a week earlier than the General Council, making it difficult for many delegates to attend, and thus had minimal input in the discussion of potential financial models. Algeria further elaborated a version of the financial model that would be acceptable to them
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From the Editor: Notes from the 25th Session.
Last month, representatives from member states, NGOs, contractors, and other stakeholders gathered in Kingston, Jamaica for Part I of the 25th Session of the International Seabed Authority. Over the course of a week, the General Council discussed and deliberated on the future of deep-sea mining, including how the financial model will be implemented, how to bring the Enterprise—the revenue generating wing of the ISA which will enter into Joint Venture partnerships as contractors move from exploration to exploitation—into opperation, and how to monitor commercial operations in the high seas.
A question that has been on my mind this month is what impact, if any, Brexit will have on seabed negotiations. Though, at the time of writing, it looks like the deadline for Brexit may get a brief but needed extension, the totality of its effects on global politics are far from well-understood. I reached out to Secretary General Lodge to get the ISA’s perspective on Britain’s upcoming departure. He reports the Brexit will likely have no impact on the ISA as it is the individual member states, not the EU, that ultimately engage in ISA meetings. Contractors based in the UK may, however, face their own unique hurdles.
Following the General Council, the Legal and Technical Commission met to discuss and revise the draft regulations for polymetallic nodule mining. Responses from LTC members were positive, acknowledging the amount of progress made but also that several questions put to the Council last year came back unanswered, forcing them to assume that there was no consensus available on select issues. One LTC member did report back that “science is getting heard”.
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Is this the end of Nautilus Minerals?
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A snail relocation experiment near Solwara I. Photo courtesy Nautilus Minerals.
Last month brought grim news for the struggling Nautilus Minerals, once hailed as the world’s first viable deep-sea mining company. While delegates were gathered in Jamaica, news reports came out that Nautilus had secured relief from its creditors while it sought to restructure the company.
Nautilus’s assets, including equipment, intellectual property, and mining leases are being auctioned through Price Waterhouse Cooper. The Deep-sea Mining Observer reached out to our contact at Nautilus, who reported that “we are still hoping that we are successful in entering into a joint venture transaction with our potential counterparty in China (as discussed in the court petition). Alternatively, if we sell one or the other of our business units (again, as discussed in the petition) we could continue on as a public company after June focused on the remaining business unit. However, there is no assurance that either of these scenarios will materialize.”
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Lumka Yengeni elected Council President for 2019
H.E. Lumka Yengeni of South Africa was elected by acclamation to serve as ISA Council President for 2019. Council President Yengeni highlighted the urgent need to protect marine biodiversity while balancing the needs of exploration and exploitation in the Area.
Council President Lumka Yengeni is congratulated by outgoing President Olav Myklebust for her election as the ISA Council President for 2019. Photo Courtesy ISA.
President Yengeni also serves as the High Commissioner of South Africa to Jamaica.
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Trying to Grasp the Financial Model
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Projected demand for Cobalt. Courtesy Bloomberg.
The Financial Model, the mechanism by which the ideals built into the founding principles of the ISA—that mineral resources in the high seas are the common heritage of humankind—are manifested in practice, is perhaps the most challenging component of launching any deep-sea mining venture. The financial model is predictive, based on myriad assumptions about what production on the deep seafloor will look like, how valuable the resources actually are, and what the future demands for precious metals will be. It allows the member states to assess and agree upon appropriate royalties to be disbursed in accordance with the common heritage principle. It allows contractors and their investors to predict what their profit margins will actually be, and it allows to ISA to determine what fees to levy to fund the Enterprise, maintain the Authority, anticipate liability needs, and implement monitoring programs.
During the last month’s meeting, the General Council struggled towards solidifying what the financial model will ultimately look like.
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Deep-sea Mining News in Brief
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A new species of the sea-anemone-like Relicanthus clings to a sponge stalk on the floor of the Pacific Ocean.Credit: D. J. Amon & C. R. Smith
Bus-size robot set to vacuum up valuable metals from the deep sea
(Science) Sometimes the sailors' myths aren't far off: The deep ocean really is filled with treasure and creatures most strange. For decades, one treasure—potato-size nodules rich in valuable metals that sit on the dark abyssal floor—has lured big-thinking entrepreneurs, while defying their engineers.
Venting fumeroles just from the crown of Godzilla hydrothermal vent. Ocean Networks Canada.
Deep-sea mining: regulating the unknown
(The Ecologist) If you ask someone to describe the deep sea, the response is often a depressing description of a barren landscape devoid of life; one of such crushing pressure and eternal darkness that the chance of life surviving here seems only possible in stories of science fiction.
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A rapid-fire summary of the ISA side events.
Aline Jaeckel, Phillip J. Turner, Diva Amon, and Jessica Perelman, Deep-Ocean Stewardship Initiative (DOSI). Photo courtesy ISA.
Monday, February 25: The IUCN held a lunch meeting to present their new report on Deep seabed mining. The Deep Ocean Stewardship Initiative hosted a dinner meeting to present latest science on deep-sea conservation.
Tuesday, February 26: The Institute for Advanced Sustainability Studies and the German Environment Agency held a lunch meeting on developing a benefit-sharing mechanism that reflects the common heritage principle. In the evening, contractors were invited to a private reception at the Secretary General's residence.
Wednesday, February 27: Pew Charitable Trusts hosted a lunch where they presented new insights and data from the Clarion-Clipperton Fracture Zone. The Deep-Sea Conservation Coalition hosted a dinner to discuss the value of environmental impact assessments.
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What’s next for deep-sea mining in 2019?
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A nodule harvester. Image courtesy DeepGreen.
1. Outcomes from the LTC. In the next few weeks, the Legal and Technical Committee will release their draft regulations for mining polymetallic nodules in the Area. There will be an opportunity for comments and input from the deep-sea mining community prior to the LTC, General Council, and General Assembly meetings this summer.
2. Patania II sea trials. DEME’s Patania II is currently undergoing sea trials to test the effectiveness of the platform and assess how the nodule collector system will impact the seafloor. There are also experiments planned to look at recovery on the sea bed following mining operations. Unfortunately, the Patania II suffered operational challenges this week and the timeline for trials has been pushed back.
3. DeepGreen environmental campaigns. DeepGreen is engaged in its own environmental campaigns, deploying deep-sea moorings and conducting seafloor surveys both to assess the value of their resource and develop biological baselines for environmental assessment. Among the surveys their conducting is one of the first large-scale examinations of noise in the deep ocean.
4. Part II of the 25th Session of the International Seabed Authority. The negotiations continue in barely 4 months when the ISA reconvenes for Part II of the 25th session. On the table with be the joint venture with Poland, operationalizing the Enterprise, the draft mining regulations, monitoring, and, of course, the Financial Model.
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