In the race to mine the seabed, China is in a tough position – Revista Digital Minera REDIMIN

In the context of China’s international confrontation with dozens of other countries, the search for a company to extract valuable metals from the seabed has reached a dead end.

Friday ended three weeks of intense meetings at the International Seabed Authority (ISA), the UN-affiliated body that regulates the nascent deep sea mining industry. ISA’s 36-country political body, known as the Council, has met at ISA’s headquarters in Kingston, Jamaica to discuss whether the organization will start accepting mining applications from companies. Their conclusion was “not yet”: most delegations said they would not approve any applications until the ISA established mining rules. The session concluded with an agreement to work “with a view to” adopting said regulation in 2025, but did not set a binding timeline.

The final days of the summit were marked by a standoff between China, which advocates deep-sea mining, and a growing alliance of countries calling for a moratorium or pause due to a lack of scientific knowledge about the deep-sea ecosystems it targets.

While the legal framework for mining has been in the works since 2016, tensions between the 168 ISA member countries (and the European Union) began to escalate in 2021. That’s when the Pacific island nation of Nauru began a controversial countdown by activating a rule that requires rules to be enacted within two years. ISA missed this deadline on July 9, 2023, the day before the Council meeting. Technically, this means that you should start accepting requests.

Nauru is a government sponsor of the ISA of The Metals Company (TMC), the Canadian-registered company that was hardest hit by the lack of a decision at this month’s summit.

All mining companies must be sponsored by an ISA member state, which is required to enforce the rules and may in turn collect royalties and fees. Nauru applied the two-year provision shortly after TMC executives told potential investors that they expect to start mining minerals used in electric vehicle batteries in 2024. When TMC went public in 2021, securities documents show it expected to earn $95 billion from its Nauru contract territory over 23 years and is estimated to have paid 7.6% of that income in royalties to Nauru and Isa .

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

Since then, ISA has issued 31 exploration licenses to mining contractors, including two TMCs, but none of these companies are allowed to mine.

At this month’s Council meeting, some members argued that the application of the two-year rule was contrary to the ISA’s mission, forcing it to prioritize the financial interests of Nauru, a nation of 8,000 people and a private company. Investigations by Bloomberg Green and other news organizations revealed the influence of the TMC on Nauru, as well as the proximity between the Secretariat, an administrative arm of the ISA, and companies regulated by the Authority.

“We should not give preference to the economic interests of the few, because this is the world in which future generations will live,” Gina Guillen Grillo, a delegate from Costa Rica, told the Council.

Meanwhile, Nauru and China pushed for tight deadlines for the rules. Surprise was raised during the Council’s closed-door talks when the Nauruan delegate met on the sidelines with the head of the TMC, as well as ISA Secretary General Michael Lodge, who heads the Secretariat, and Secretariat Chief of Staff Marie Burrell-McKinnon. Also present was former Secretariat Legal Officer Chris Brown, who is currently Nauru’s Counsel and traveled to Kingston as part of the country’s delegation. (In June, the head of the ministry’s compliance department joined a Norwegian deepwater mining company that has exploration contracts with ISA.)

China throws its weight around

The issue of how to deal with deep-sea mining in the absence of environmental safeguards also touched upon the meeting of the ISA Assembly, which is the “supreme body” of the Authority. The Assembly comprises all 168 Member States and meets for one week following the conclusion of the two-week session of the Council.

Although the Assembly is the final arbiter of the ISA, its meetings generally approve the Council’s decisions. However, last week China ended that courtesy by refusing to allow discussion of a proposal by Chile, France, Palau and Vanuatu to ban the approval of any mining license until appropriate regulations are in place. China has five mining contracts, more than any other country.

Other pro-mining nations such as Russia and Japan seemed to see the proposal as a covert way to negotiate a moratorium on mining. Since the Assembly’s agenda must be adopted by consensus, China did not allow it to make decisions on the ISA budget and other unrelated matters until the ban proposal was rejected. “This particular issue is not suitable for discussion at this session of the Assembly,” Chinese delegate Wenting Zhao said on Friday after five days of deadlocked negotiations. In the final minutes of the session, China stated that the proposal could be placed on the provisional agenda for the next conference of the Assembly in July 2024.

Pradeep Singh, a research fellow at the Sustainability Research Institute in Germany who studies the ISA and who attended this month’s meeting, says China could try to play tough again next year. “But it is clear that the governments are concerned about the mining industry and want to discuss whether it is possible to guarantee the protection of the environment,” he says. “China may not be able to do as much as possible next year.”

De facto pause in deep sea mining

After three weeks of open discussions and closed-door negotiations, the ISA is only slightly back from where it started. TMC and other mining contractors may apply for mining licenses, but it is unlikely that the Board will approve them in the absence of rules. The Council may work to finalize these rules by 2025, but in practice member countries remain far apart on critical issues such as setting the rate of royalties for mining and developing a mechanism for sharing these benefits.

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

“As an Aotearo Indian, I want to shed light on the immense value of my connection to the deep sea,” he told the Assembly on Friday. “It is critical to recognize its importance and understand why a deep sea ban is the only viable solution to protect our collective ocean.”

In total, 20 countries joined the call for a moratorium or pause, and France demanded a ban on mining on the high seas. Singh notes that because the Council must make rules by consensus, one country could end the deal if it opposes rules it deems insufficient to protect the ocean’s depths. “While some states don’t like to put a label on it,” he says, “we’ve already taken a break.”

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