South Korea has won the exclusive right to mine a 10,000sq.km area of the Indian Ocean. The lure is the target of bringing up from the sea floor minerals weighing about 46,000 tonnes annually, worth about $300 million a year. The area lies 2500km southwest of Sri Lanka.
Deep-sea mining seems to have taken on a new sense of urgency of late. Certainly, there will at some stage be a critical shortage of some, perhaps many, minerals, but there’s not now. Even 10 years from now its unlikely to be the case.
The prices on the London Metal Exchange don’t suggest any feeling of panic, with zinc threatening to drop below $US1800/tonne, nickel threatening to fall below $15,300 and copper just keeping its head above $7000. And the LME warehouses at present hold 984,750t of zinc and 236,375t of copper if anyone needs to top up.
Yet under the sea they want to go.
The big lure is finding what are called hydrothermal vents from which water heated by volcanic activity under the seabed mixes with the ocean waters, thus providing an exploration target.
The ocean floor structures can be extremely rich in minerals, and variously contain manganese, iron oxides, cobalt, nickel, rare earths, tellurium, molybdenum, zirconium, titanium, bismuth, niobium, platinum and tungsten.
The South Koreans are looking for gold, silver, copper, zinc and lead.
Meanwhile, the University of Tokyo along with Mitsui and Modec, an engineering company specialising in floating production platforms, is now at work collecting rare earth elements buried in the mud near Minamitori Island, off Japan.
They are looking particularly for dysprosium, the rare earth vital to modern magnets; the professor leading the trial mining hopes they might find enough dysprosium to last 200 years.
We now see Nautilus Minerals gearing up to start work in the seas off Papua New Guinea. According to Canada’s The Northern Miner, several other projects are readying to go.
A (so-far) unlisted Canadian company, DeepGreen Resources, is focusing on the Clarion-Clipperton zone near Hawaii where rocks at a depth of 4500m have been recovered containing copper, nickel and manganese. It does get a certain amount of credibility having signed an off-take agreement with Glencore International.
According to the newspaper, hundreds of millions were spent in the 1970s exploring the Clarion-Clipperton zone.
At the centre of all this activity is the International Seabed Authority, headquartered in Kingston, Jamaica (nice work if you can get it). Its assembly has 162 member countries and has observer status with the United Nations. The current president is from Burma.
It has the globally recognised authority to award areas for exploration (they gave the South Koreans the go-ahead) and already there’s a queue, mainly from government or semi-government organisations. Those with applications in at present include companies sponsored by the governments of France, Britain, Belgium and – would you believe? – Kiribati.
Japan has been busy looking for rare earths in several ocean locations and China and India are also taking a very keen interest. New Delhi is to launch two ships capable of mining at ocean depths of up to 6000m.
It’s not the sort of thing that would appeal to the type of investor who gets nervous about anything more than half a day’s drive from Kalgoorlie, but deep sea mining does sound as if it getting some critical mass.
The costs and risks are enormous, naturally. But there are advantages. One such is explained in a report on undersea rare earths published this year by the International Seabed Authority. Apparently the most valuable rare earths – the heavy elements, including dysprosium, europium and terbium – are present in much higher grades than most land-based mines, including Bayan Obo, the world’s largest.
Moreover, the seabed structures in which they are contained are different, and so can be extracted much more cheaply by dilute acid leach. Thirdly, the land-based deposits tend to be associated with thorium, which needs to be carefully managed (as Lynas has found through dealing with the Malaysians). But it seems that seabed deposits have no radioactive elements.
But it's going to be a hard sell. Don't expect too much private sector enthusiasm; this business will remain dominated by government-backed entities with resource security rather than pay-back times foremost on their minds.
However, there is a type of deep sea mining that does appeal to this writer.
NASDAQ-listed Odyssey Marine Exploration is recovering silver bullion from the SS Gairsoppa, a British cargo ship that sank in 1941 after being torpedoed by a U-boat. So far 1.4 million ounces of silver have been brought to the surface.
This article first appeared in ILN's sister publication MiningNews.net.
