Deep-sea mining could jeopardize more than $560 billion in annual export revenues from terrestrial mining, a new report from financial think tank Planet Tracker argues. The study, titled Race to the Bottom, questions the economic viability of extracting minerals from the ocean floor, highlighting the negligible financial returns and significant environmental risks posed by such operations.
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Economic Concerns for Mining-Dependent Nations
The report suggests that the growth of deep-sea mining could undermine the demand for terrestrial minerals, a vital revenue source for many resource-dependent nations. In its projections, even under the most favorable conditions, the annual corporate income tax revenue from deep-sea mining could amount to just $6.25 million globally—a trivial figure compared to the economic reliance on land-based mining exports.
“Deep-sea mining is expected to offer minimal financial returns to ISA member states,” Emma Amadi, an investment analyst at Planet Tracker, wrote. “Countries do not own the mineral resources in international waters, and companies can seek sponsorship from any member state of the International Seabed Authority (ISA), triggering a race to the bottom in corporate tax rates.”
The study also calculates that royalties, which represent another revenue stream for nations, could range from just $42,000 to $1.1 million annually. These amounts are deemed “insignificant” for all but the smallest economies, raising doubts about the financial justification for deep-sea mining.
Environmental Threats Add to the Risks
The findings coincide with heightened environmental concerns over deep-sea mining. The International Union for Conservation of Nature (IUCN) recently warned that over 40% of coral species face extinction due to human activities, including deep-sea mining, bottom trawling, and oil and gas drilling.
The seafloor extraction of polymetallic nodules—potato-sized rocks rich in critical minerals like nickel, cobalt, and rare earth elements—is poised to accelerate. These nodules are concentrated in the Clarion-Clipperton Zone (CCZ), a vast area of the Pacific Ocean where companies like Canada’s The Metals Company (NASDAQ: TMC) hold exploration contracts.
Deep-sea mining advocates argue that these nodules could help secure critical minerals needed for green technologies. However, Planet Tracker contends that the potential environmental destruction—particularly to marine ecosystems—outweighs any economic benefits.
Calls for Regulatory Oversight
The debate comes as the ISA continues to draft a Mining Code to regulate commercial deep-sea mining, expected to be finalized in 2025. Environmentalists and some governments are urging for a moratorium on deep-sea mining until comprehensive studies on its ecological and economic impacts are completed.
“The financial returns from mining the seafloor are negligible,” the report asserts, urging governments and investors to prioritize sustainable improvements in land-based mining practices instead.
Geopolitical Implications
The controversy has gained political traction in the U.S., where President-elect Donald Trump recently nominated Elise Stefanik as ambassador to the United Nations. Stefanik, a vocal supporter of securing critical minerals for domestic use, has expressed interest in leveraging deep-sea resources to reduce U.S. reliance on foreign supply chains.
Key Takeaways
- Economic Viability: The financial gains from deep-sea mining are likely to be minimal, undermining the case for its adoption by ISA member states.
- Environmental Risks: Deep-sea mining poses severe threats to marine ecosystems, exacerbating biodiversity loss.
- Regulatory Challenges: The ongoing development of the ISA’s Mining Code highlights the urgency for stricter governance and moratoriums.
- Geopolitical Considerations: Political endorsements for deep-sea mining, such as those in the U.S., clash with environmental and economic caution advocated by reports like Race to the Bottom.
Conclusion
Planet Tracker’s findings emphasize that the pursuit of deep-sea mining represents a short-sighted economic gamble with potentially catastrophic environmental consequences. For nations heavily reliant on terrestrial mining, the shift toward deep-sea exploitation risks undermining both financial stability and ecological integrity. Governments and investors must weigh these risks carefully, prioritizing sustainable mining practices that protect both the planet and their economies.
