China Fears Have Put Ocean-Floor Mining on Washington's Radar

"Mining the ocean floor for minerals often seemed like a fantasy, but U.S. national-security concerns could be bringing it closer to reality.

Thousands of feet down at the bottom of the ocean, small rocks holding vast quantities of nickel, manganese and cobalt -- the perfect combination of minerals to make an electric-vehicle battery -- sit untouched, as high costs to reach them, a lack of research and public opposition have kept deep-sea mining a pipe dream.

Lobbying efforts seeking governmental approval to mine the seabed for EV-battery metals often fell on deaf ears, but backers have found a way to appeal to lawmakers -- as a source of cobalt for U.S. weapons makers that avoids Chinese suppliers, building on efforts to decouple from the Asian superpower.

"Without question the narrative around deep-sea mining has gone through an inflection point in that it has clearly found a home in the context of national security," said Samir Kapadia, a Vogel Group lobbyist backed by The Metals Company, one of the few companies working in the field. Kapadia said that lawmakers in past years saw deep-sea mining as a "pie in the sky" idea, unlikely to come to fruition and even laughed at in some quarters.

Switching the messaging to defense has spurred interest in the field.

On Tuesday, Reps. Carol Miller (R., W.Va.) and John Joyce (R., Pa.) introduced a bill to Congress pushing for the development and financing of deep-sea mining in the country. The bill in particular put forward the idea of creating a processing industry inside the U.S. as well as for deep-sea mining's legalization and formalization in international waters.

The boost in urgency has come amid China's increasing domination of many critical-mineral supply chains and its growing influence over deep-sea mining. The country holds five contracts to explore the seabed for minerals in international waters, more than anyone else. The next highest is Russia.

More than 30 Republican members of Congress wrote a letter to U.S. Secretary of Defense Lloyd Austin in December pushing the case for deep-sea mining and for processing minerals within the U.S. and warning against China's control of the critical-minerals sector.

"We cannot afford to allow China to capture and exploit seabed resources, which the CCP has characterized as 'a new frontier for international competition.' We must explore every avenue to strengthen our rare earth and critical minerals supply chains," said a letter signed by the likes of Reps. Robert Wittman (R., Va.) and Elise Stefanik (R., N.Y.).

The U.S. Defense Department is working on a report commissioned by the National Defense Authorization Act, reviewing the U.S.'s ability to process minerals harvested by deep-sea mining on home soil. That report was due March 1 but has been delayed.

In the coming week, members of the International Seabed Authority, a United Nations observer organization, are due to meet in Kingston, Jamaica, to hash out the final steps of a mining code that eventually should lead to the final rules and regulations of deep-sea mining. The U.S. will be in attendance, though it hasn't ratified the U.N. Convention on the Law of the Sea, meaning it doesn't have voting rights over the new laws.

A group of former military and political leaders have called for the U.S. to ratify the Law of the Sea in an effort to spur the country's interest in deep-sea mining, according to a draft letter seen by The Wall Street Journal.

TMC, in partnership with the island country of the Republic of Nauru, is working on an exploratory project that has opened a possible door to start harvesting the Pacific Ocean seabed.

Still, the market doesn't seem to believe it. Last year, TMC's shares fell below a dollar, and its biggest backer -- Danish shipping giant A.P. Moller-Maersk -- sold its interest in the company. Cash on hand has dwindled and opposition to its project has grown, with more than 20 countries calling for a moratorium. Greenpeace protesters boarded a TMC research ship in the Pacific Ocean late last year.

But the company may have found its winning ticket with defense. Since 2021, TMC has spent $680,000 on lobbyists in Washington trying to make the case for deep-sea mining, according to OpenSecrets, a nonprofit group that tracks money in politics. 

Between 2021 and 2022, most of that lobbying was spent making the case that TMC would be mining minerals like nickel and cobalt needed for EV batteries and therefore for the energy transition.

Last year's pivot to defense has finally gained traction.

"In our presentation decks from over a decade ago we talked about the security of supply," Chief Executive Gerard Barron said. "It's something we have always talked about. With defense it is showing broadly what the U.S. has woken up to, that if you want mineral independence, it's a case of how do you do that."

Congressional leaders have been meeting with deep-sea mining companies like TMC and Houston-based Transocean over the past year to discuss deep-sea mining, with the specific aim of processing minerals on U.S. shores.

"The critical minerals needed for the construction of our combat systems of ships and planes and other aspects of things critical to the military -- all of a sudden it was very apparent that there were shortcomings in a lot of those areas," said Wittman. "We could be at the mercy of China if we don't really lift our game and get into this area of deep-sea mineral deposit claims."

In November, five Texas Republicans also wrote a letter to the Defense Department asking for funding to see whether it was feasible for TMC to process deep-sea minerals in the state, under one of its subsidiaries, DeepGreen Resources. Meanwhile, TMC continues to work with lobbyists, politicians and think tanks to try to advance its deep-sea mining ambitions.

Opposition, though, remains fierce. Groups like Greenpeace and the World Wide Fund for Nature have lobbied against deep-sea mining for years. They say such mining would cause irreparable damage to the seabed." [1]

1. EXCHANGE --- China Fears Have Put Ocean-Floor Mining on Washington's Radar. Khan, Yusuf.  Wall Street Journal, Eastern edition; New York, N.Y.. 16 Mar 2024: B.11.