While everyone’s sights are set on lithium, a mining boom is taking off across a range of metals and minerals. As the demand for mined minerals accelerates to support the rapidly expanding renewable energy industry, Wall Street is betting big on commodities, with plans for land and deep sea mining picking up the pace around the world. The question is, how will the industry be able to develop at the rapid pace needed to meet the growing global demand while also responding to concerns around its impact on the environment? Experts expect the global metals and minerals market to grow from $6,877.41 billion in 2021 to $7,507.82 billion in 2022, with a CAGR of 9.2 percent. It will expand even further to $10,274.68 billion by 2026 at a CAGR of 8.2%. The Asia Pacific was the biggest metals and minerals mining region in 2021, followed by Western Europe. Several technological innovations are expected to drive innovation in metals over the next decade from 3D printing to artificial intelligence and big data analytics. The use of drones in mining projects is also expected to make operations more efficient thanks to better monitoring, surveying, and mapping techniques to repair faults, manage inventory, and enhance site safety.
The anticipated growth of the mining industry has encouraged Wall Street analysts to bet big on the commodities market. Earlier this year, supply-side constraints following the pandemic and the Russian invasion of Ukraine led to a sharp rise in commodity prices. While this has largely settled, due to rising inflation and other global economic concerns, analysts are expecting the market to rally again towards the end of the year.
Recently, the push for deep sea mining has been greater than ever, as the future demand for metals and minerals looks bright. The question is how to manage the approval of mining in international waters. In 2021, the small island state of Nauru called for the first use of a procedure that gave the UN body the International Seabed Authority (ISA) a 2023 deadline for the fast-track of deep sea mining exploitation rules. But governments, scientists, and environmentalists are concerned about the two-year ultimatum.
During ISA meetings in Jamaica earlier this month, the organization rejected calls to put the issue on the agenda for comment from member states. This means the 167 powers represented in the ISA will not have a chance to comment on the issue before the 2023 deadline. Since the enactment of the two-year deadline, the ISA secretary has established a roadmap, which would allow for commercial deep sea mining operations to start as soon as next year. Regardless of whether the mining code has been finalized or not, the procedure would require the ISA to “consider and provisionally approve” requests for exploitation licenses.
Several countries are concerned about the environmental implications of rushing a decision on deep sea mining, accusing the ISA of being blindsided by plans to develop the industry at the cost of safeguarding the marine environment. In June, Chile called for a 15-year memorandum on adopting regulations. Chile’s ambassador Constanza Figueroa questioned, “Are we willing to be accomplices to the unknown and irreparable damages submarine mining might cause?” Ecuador’s representative added, “We are not ready… If we act with haste, we could put ourselves in irreversible situations with respect to the marine environment.”
The deep sea environment holds a wealth of minerals, such as manganese, cobalt, copper, and nickel, which could be used for rapidly growing renewable energy technologies including solar panels, wind turbines, and electric-vehicle batteries. Professors at MIT exploring the potential for deep sea mining explain that sediment on the ocean floor accumulates at a rate of 1 millimeter a millennium, meaning that areas disturbed by mining would take a very long time to recover. This could have a significant biological impact. Experts fear that mining could hurt all surrounding ecosystems and marine life. But on the flip side, many recognize the importance of mining in support of building the components required for a transition to greener energy and the movement away from fossil fuels.
But while some raise concerns about the impact deep sea mining could have on the environment, others highlight the potential opportunity of becoming one of the first countries to exploit these resources. A deep sea region between Hawaii and Mexico contains greater levels of copper, cobalt, nickel, and manganese than all of its proven land deposits combined. This has driven many mining firms to push for undersea projects. And the Biden government cited a projected 400 to 600 percent increase in demand for critical minerals earlier in the year. However, the U.S. is not currently an ISA member state, meaning it may not be involved in the early stages of deep-sea mining.
As the demand for metals and minerals continues to increase worldwide, mining activities are rapidly expanding as various countries look to lead the growing global industry. In addition, the nascent deep sea mining industry will likely begin to be developed despite growing environmental concerns over rushing regulations in the sector.
By Felicity Bradstock for Oilprice.com
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