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The deep sea, which makes up three quarters of the world's oceans, has been found to contain significant mineral deposits. While the idea of mining the seabed is not new – commercial deep-sea mining was first proposed over 60 years ago – the recent surge in demand for critical minerals such as cobalt, nickel and copper driven by the energy transition has renewed interest from governments and private sector developers. However, it remains highly controversial, given the technical challenges and potential environmental impacts involved.

In this article, we examine the current regulatory framework, as well as some of the challenges and funding options available for this nascent sector.

What is deep-sea mining?

Deep-sea mining involves extracting mineral deposits from the seabed at depths below 200 metres

Based on current technology and known deposits, there are three main ways of doing this:

  • polymetallic nodule exploitation: extracting small (golf to tennis ball-sized) polymetallic nodules from the seabed, typically at depths of around 4,000-to-6,000 metres;
  • polymetallic sulphide exploitation: extracting minerals from sulphides deposited around hydrothermal vents; and
  • cobalt-rich ferromanganese crust exploitation: extracting minerals deposited as thin layers (up to 25 centimetres) on seamounts and submerged volcanoes.

Regulatory framework

The regulation of deep-sea mining varies depending on whether the mining activities are in international or national waters.

International waters:

The International Seabed Authority (ISA), which comprises 168 member states plus the European Union, was established in 1994 under Part XI of the United Nations Convention on the Law of the Sea (UNCLOS) and its implementing agreement (the 1994 Agreement) to regulate deep-sea mining activities in international waters.[1] The Jamaica-based body's main functions are to adopt regulations for exploration and exploitation activities in international waters and, secondly, consider and approve contract applications for such activities.

Notably, the US is not a full member of the ISA. Although it is afforded observer status, it has not ratified UNCLOS, meaning it cannot formally sponsor applications for exploration licences in international waters with the ISA.

The ISA has to date:

  • adopted regulations for the exploration of: (i) polymetallic nodules (in 2000, amended in 2013), (ii) polymetallic sulphides (in 2010) and (iii) cobalt-rich ferromanganese crusts (in 2012); and
  • granted over 30 exploration contracts to mining and exploration companies (each sponsored by an ISA member state, as required by UNCLOS and the 1994 Agreement), permitting the exploration of around 1.5 million km2 of international seabed for deep-sea mining purposes.

However, importantly, the above regulations and contracts only cover exploration activities – they do not permit exploitation. The ISA (despite working on draft regulations since 2014) is yet to adopt exploitation regulations or award any exploitation contracts.

Under the 1994 Agreement, the ISA is required to adopt exploitation regulations within two years of a request from any ISA member state (the so-called "two-year rule") and, as a fallback if such regulations are not adopted within that period, "consider" and "provisionally approve" any pending applications for exploitation activities after the expiry of the two-year period.

In July 2021 the Pacific Island nation of Nauru triggered the two-year rule. However, the ISA failed to adopt exploitation regulations within the two-year period, with the ISA instead publishing a roadmap for the adoption of exploitation regulations by 2025, noting that it would continue to consider any applications for exploitation works in the meantime. As of 27 March 2024, the ISA said that it has made “good, positive progress”, but members disagree whether regulations can be agreed within the target timeframe.

National waters:

Deep-sea mining in territorial waters, known as exclusive economic zones (EEZs), is regulated by the relevant state legislation. However, only a handful of countries have adopted or propose to adopt law permitting deep-sea mining activities in their EEZs.

In 2022, the Cook Islands (whose EEZ has been found to contain large cobalt deposits) granted a number of permits for deep-sea mining exploration activities within its EEZ. However, the country has not issued any extraction permits to date. Other nations, including China and Japan, are working on similar plans and, according to a March 2024 article in the Wall Street Journal, The Responsible Use of Seafloor Resources Act has been introduced to the US Congress. This proposed law would offer financial, diplomatic or other kinds of assistance for collecting, processing and refining seafloor nodules if they are sourced in accordance with regulations.

In January 2024, the Norwegian Parliament went one step further by approving deep-sea mining exploration in a designated part of its EEZ and allowing mining companies to apply for an exploitation permit, which will be approved by the Norwegian Parliament on a case-by-case basis (no exploitation permits have so far been issued).

Technical challenges and limiting environmental impacts

Polymetallic nodules are currently thought to be the most promising deep-sea resource of critical minerals, as compared to sulphides and crusts. According to World Ocean Review (2021), the cobalt, nickel and manganese in the nodules in the Clarion-Clipperton Zone (CCZ) are more abundant than in all the known deposits on land. They estimate that there is about 3.4 to five times more cobalt, 1.8 to three times more nickel and 1.2 times more manganese. Yet these nodules exist at depths of around 4,000-to-6,000 metres. Exploiting this resource at a commercially reasonable cost is a hurdle that developers are currently facing.

Technical challenges include:

  • Exploitation – harvesting methods using robots, eg, pick and place and suction
  • Pressure – operating at extreme depths
  • Visibility – navigating with minimal or zero natural light
  • Sediment – reducing flocculation (the process by which fine particulates are caused to clump together)
  • Waste – discharging by-products safely
  • Transport – moving nodules to the surface and managing weather risk

As available technology and understanding of marine ecosystems improve, developers will aim to mitigate potential environmental impacts. For example, artificial intelligence and new harvesting methods are being used by companies such as Impossible Metals to improve the exploitation process and reduce sediment flocculation.

The technical expertise required for deep-sea mining (eg, mapping and robotics) also crosses over with ultra deepwater oil & gas projects and so services companies in that sector may play an important part as deep-sea mining projects develop. For example, operations of companies like Blue Ocean Marine Services in Australia, operating in the oil & gas sector, are equally applicable to the baseline data and monitoring needs of deep-sea mining operations.


In the early stages of exploration, companies look to seed and venture capital to secure funding. As has happened in the wider critical minerals sector, in the future there may be appetite from national governments seeking to diversify supply chains to encourage junior developers through grants, subsidised loans and tax breaks.

Similar to early development funding in traditional mining, royalty agreements and convertible equity may also be an attractive source of development capital.

After private capital, public equity markets are likely to be the go-to source of funding for deep-sea miners. For example, The Metals Company (TMC), the leading explorer in the CCZ in the Pacific Ocean, is listed on Nasdaq. TMC has also granted multi-national mining and commodity group Glencore offtake rights in respect of nickel and copper output. The agreement, signed in 2011, applies to certain areas in the CZZ held by Nauru Ocean Resources, a wholly-owned subsidiary of TMC.

If exploitation licences are issued, the next logical step will be to employ financing from commercial banks, export credit agencies and development finance institutions. The potential for limited recourse financing will be determined by the capital expenditure and cashflow profile. It is too early to tell whether a deep-sea mining project would be best suited to an asset-based financing where equipment is used across multiple exploitation zones or a reserve base model where the resource from a particular licence area is financed. Any debt financing will ultimately boost returns to equity.

The experience of the space industry may also be relevant as it utilises multiple funding sources, including limited recourse asset-based financing, to maintain high levels of capital expenditure while preserving returns for investors. Previously, space was the exclusive domain of governments, but now Intuitive Machines, a company listed on Nasdaq, has landed on the moon and SpaceX, one of the world's most valuable private companies, is leading the satellite launch and communication markets. A similar trend could emerge in deep-sea mining if the technical challenges and environmental impacts are overcome at a cost which is acceptable to investors.


The regulation of deep-sea mining is moving forward at a pace. The race for critical minerals and the energy transition is driving the development of this industry and it is likely that regulatory changes and improvements in technology will be closely followed by innovation in the sources of funding that are available.

For more information, see our Mining insights hub here, which will include future articles in our Beneath the Surface series

[1] The United Nations Convention on the Law of the Sea of 10 December 1982 and the 1994 Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea of 10 December 1982

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