FixO3 - Deliverable D5.2.1: Deep Sea Mining

Project

312463 - Fixed Point Open Ocean Observatories Network

Work Package number

WP5

Work Package title

Innovation Through Industry

Deliverable number

D5.2.1

Deliverable title

Deep Sea Mining

Description

An investigation into the current status of deep sea mineral exploitation

Lead beneficiary

SLR

Lead authors

Ciara Bannon (SLR), Nick O’Neill (SLR),

Contributors

Shane Lavery (SLR)

Submitted by

Shane Lavery

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Table of Contents I.

Introduction ........................................................................................................................................... 3

II.

Operators in the Industry ...................................................................................................................... 4 i.

Nautilus Minerals Ltd, Solwara 1 ....................................................................................................... 4

ii.

Diamond Fields International Ltd., Atlantis II Deep........................................................................... 6

iii.

Other Explorers.................................................................................................................................. 7

iv.

Neptune Minerals – Massive Sulphides ............................................................................................ 8

v.

Tonga Offshore Mining Limited (TOML) – Manganese Nodules ....................................................... 8

III. i.

Fix O3 Companies within the industry............................................................................................... 8 Consulting Companies in the Deep Sea Mining Industry .................................................................. 8

IV.

Industry Suppliers .............................................................................................................................. 9

V.

Environmental Concerns ................................................................................................................. 10

VI.

Environmental Opportunities .......................................................................................................... 10

VII.

Industry Outlook .............................................................................................................................. 11

VIII.

Strategy Suggestion ......................................................................................................................... 11

IX.

References ....................................................................................................................................... 12

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I.

Introduction

The concept of Deep Sea Mining (DSM) originally came to light in the 1960s and with advances in technology and average land-based mineral deposit grades decreasing, DSM is now becoming an increasingly attractive source of minerals. Shallow underwater deposits (400m). The main targets for exploitation within this sector are polymetallic (Mn) nodules, cobalt crusts and massive sulphide deposits, which can wield high concentrations and varying amounts of iron, lead, copper, zinc, nickel and manganese, as well as precious metals such as gold. A summary of these resources is presented in the table below. Target Polymetallic Massive Sulphides

Metals Cu, Pb, Zn and precious + trace metals

Manganese (Polymetallic) Nodules

Mn, iron hydroxides, Ni, Cu, Co, Mo, Zr, REEs Co, Ni, Mn, etc

Cobalt Crusts

Location and Formation Formed by precipitation of metals leached from hydrothermal fluids (black smokers / white smokers). Mainly occur along major tectonic belts, back-arc basins, volcanic ridges, at very deep – shallower depths 100’s mm diameter ‘potato sized’ lumps, precipitated on deep seafloor

2500m and the main areas for current exploration activities are the Clarion-Clipperton Fracture Zone (Eastern Pacific Ocean), the Western Pacific Ocean, the South West Indian Ridge, Mid Atlantic Ridges and the Indian Ocean. Currently, there are 26 approved projects by the ISA with a total covered area of around 1.2 million km². Only exploration contracts have been issued by the ISA to date. Up until May 2014, 19 applications have been approved out of which:

 

13 concern the exploration of polymetallic nodules, 4 for polymetallic sulphides and 2 the exploration of cobalt-rich polymetallic crusts. 12 of the exploration projects are located in the CCZ. This area is located in international waters of the Pacific Ocean. The remaining projects are located in the Indian Ocean (3), the Atlantic Ocean (2) and the north-western Pacific Ocean (2).

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These 19 approved projects cover an area of 1 million km². Exploration contracts are issued for 15 years and 6 of the current contracts will expire in 2016. A summary of the main exploration areas and their respective current contract holders is provided in the below table. Area ClarionClipperton Fracture Zone

Western Pacific Ocean

Mid Ocean Ridges Indian Ocean South West Indian Ridge

II.

Operators/Licence Holders Ocean Mineral Singapore Pte Ltd, UK Seabed Resources Ltd., GTec Sea Mineral Resources NV, Marawa research and Exploration Ltd., Tonga Offshore Mining Ltd., Nauru Ocean resources Inc., Federal Institute for Geosciences and Natural Resources of Germany, Institut français de recherche pour l'exploitation de la mer, Deep Ocean Resources Development Co. Ltd., China Ocean Mineral Resources Research and Development Association, Government of the Republic of Korea, Yuzhmorgeologiya, Interoceanmetal Joint Organization Ministry of Natural Resources and Environment of the Russian Federation, Magellan Mountains, Pacific Ocean. Japan Oil, Gas and Metals National Corporation (JOGMEC), China Ocean Mineral Resources Research and Development Association (COMRA) Institut français de recherche pour l'exploitation de la mer, Government of the Russian Federation Government of India

Target Polymetallic Nodules

Cobalt-Rich Ferromanganese Crusts

Polymetallic Sulphides Polymetallic Nodules Government of the Republic of Korea, Central Indian ridge. Polymetallic China Ocean Mineral Resources Research and Development Sulphides Association

Operators in the Industry

Currently, only 2 projects have published Code-compliant resources; Solwara 1 and Atlantis II Deep. Solwara 1, discovered by Nautilus Minerals, is located in the Bismark Sea, within the Exclusive Economic Zone of Papua New Guinea and Atlantis II is located in the central Red Sea.

i. Nautilus Minerals Ltd, Solwara 1 Nautilus Minerals, a publically listed Canadian company jointly owned by Barrick Gold Corporation, AngloAmerican, Teck Cominco, and Epion Holdings, is currently working towards developing the world’s first seafloor mine, with the first mining lease granted in 2011 for the Solwara 1 deposit, in the territorial waters of Papua New Guinea. Solwara 1 is the world’s first publically reported deep sea resource. In 2008, Golder Associates prepared a resource report, stating 870kt of indicated massive sulphide and 1300kt of inferred massive sulphide, with a 4% Cu cut off, based on 111 diamond drill holes, EM sections and chimney sampling. The deposit occurs at depths between 1500 – 2500m, in the Manus Basin, located approximately 30km off the coast of New Ireland. When in operation, Nautilus Minerals expects to produce approximately $564million worth of copper and $294million worth of gold per year.

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Fig 1: Bathymetric map taken from Golder Associates 2008, Resource Report 0661025-039, showing deposit, chimney and drill hole locations.

In 2014, Nautilus Minerals solved a dispute with the PNG government, allowing the project to proceed, with the government of PNG taking a 15% stake in the project until first production. In April 2015, Nautilus Minerals commenced exploration activities in the Solomon Islands, with survey services provided by Gardline CGG Pte. Since then, the company has been working towards operation, with the delivery of their production ship expected by mid-2016 and of the seafloor production tool (SPTs), construction on the bulk cutter has been completed and work on both the collecting machine and the auxiliary cutter began in 2014, with delivery expected Q2 2015. The riser system is due to be completed Q2 2015 and the pump by 2016. Various companies have been involved with the production ship construction, with the vessel cargo handling equipment contract awarded to Bedeschi SPA in March 2015 and both the vessel electrical installation contract, awarded to Siemens and the vessel cranes contract, awarded to MacGregor, in April 2015. Fig 2: Nautilus Minerals bulk cutter. (http://www.nautilus minerals.com/i/pdf/F actsheetQ22014.pdf)

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ii. Diamond Fields International Ltd., Atlantis II Deep The Atlantis II Deep deposit is joint owned by Diamond Fields International and Manafa International and is located 155km west of Jeddah, in the Red Sea, within Saudi Arabian and Sudanese jurisdiction, at depths of approximately 2000m. It is the ‘largest marine sulphide deposit known’, with the deposit estimated at 90 million tonnes. The high grade zinc, copper, silver and gold mineralisation extends over an area of 57km² and although an estimated $28million has been spent on exploration, mineralisation remains open at depth (>8.5m). The project was awarded a 30 year licence to develop Atlantis II Deep however; is currently on hold pending a dispute between Diamond Fields International and Manafa.

Fig 3: Image showing location of Atlantis II Deep

In 2010, the ISA published a list of potential mining sites of Massive Sulphides at ‘Inactive Hydrothermal Vents’, placing Atlantis II Deep first. The top 5 deposit sites are displayed in the table below. Potential Deposit Sites (ISA 2010) Atlantis II Deep Middle Valley Northeast Pacific Explorer Ridge Northeast Pacific Lau Basin Southwest Pacific North Fiji Basin Southwest Pacific

Water Depth 2,000-2,200 m 2,400-2,500 m 1,750-2,600 m 1,700-2,000 m 1,900-2,000 m

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Jurisdiction EEZ EEZ EEZ EEZ EEZ

Country Saudi Arabia, Sudan Canada Canada Tonga Fiji

iii. Other Explorers Public, non-code compliant statements have been released by a number of other explorers, mainly based in the Clarion-Clipperton Zone and the Western Pacific Ocean, targeting polymetallic nodules. A brief summary of these statements, including two for phosphorite deposits, are noted in the table below (sourced from Sterk & Stein, RSC Global Report, 2015).

Company BGR

Exploration Area CCZ

COMRA

CCZ

DORD

CCZ

Government of Republic Of Korea

CCZ

IFREMER

CCZ

IOM

CCZ

MOES

Indian Ocean

NORI

CCZ

Yuzhmorgeologia

CCZ

JOMEC

Chatham Rock Phosphate Ltd.

Western Pacific Ocean Western Pacific Ocean Chatham Rise, New Zealand

Polymetallic Crusts Polymetallic Crusts Phosphorite Nodules

Minemakers Ltd.

Namibia

Phosphorite Nodules

COMRA

Deposit Manganese Nodules Manganese Nodules Manganese Nodules Manganese Nodules Manganese Nodules Manganese Nodules Manganese Nodules Polymetallic Nodules Polymetallic Nodules

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Publically Announced >30Mt nodules over ~2000km² with average abundance of 22.4kg/m² Abundance >5kg/m² of Cu+Co+Ni of >1.8% average 12.31kg/m² average abundance ‘with cut off abundance of 7.5kg/m²’ “Measured” resource of 188.4 Mt averaging 10.4 kg/m², and a “mineable” resource of 113.8 Mt Currently defining an inferred resource ‘Estimated resource of 48.1Mt of 11Mt Mn, 0.44Mt Ni, ).43Mt Cu and 0.05Mt Co Identified a ‘test mine’ Geophysical mapping and seafloor sampling Possible ‘448 Mt (dry) at an average grade of 1.39% Ni, 1.1% Cu, 0.23% Co and 9.3% Mn Exploration and sampling commenced Exploration and sampling commenced 80Mt with average of 290kg/m² for a contained 23.4Mt of phosphorite. The NZ EPA refused an application to mine by CPR in February 2015 200-330m water depth, 60km off coast of Namibia. 98.8Mt of phosphorite at average of 20.57% P2O5 indicated. Progress halted due to moratorium pending an Environmental Impact Assessment

iv. Neptune Minerals – Massive Sulphides Neptune Minerals has undertaken a number of major exploration campaigns. These began in 2005 with a scout drilling campaign in New Zealand waters and subsequent campaigns were undertaken in 2007, 2010, 2011 and 2012. In 2011, Neptune Minerals commissioned an environmental audit by Coffey Environments. They hold licenses in Japan, Papua New Guinea, Solomon Islands, Vanuatu, Fiji, Tonga and New Zealand.

v. Tonga Offshore Mining Limited (TOML) – Manganese Nodules TOML is 100% subsidiary of Nautilus Minerals and sponsored by the Kingdom of Tonga. In 2012 they were awarded a 15 year exploration contract, in the Clarion-Clipperton Zone by the ISA and in September 2012 they announced an inferred resource of 440 Mt of 1.2% Ni, 0.24% Co, 1.1% Cu and 26.9% Mn, at a cut off nodule abundance of 4kg/m2. TOML now plan to upgrade this to indicated category.

III.

Fix O3 Companies within the industry

FIXO3 partners are ideally positioned to provide a range of services required by the DSM sector, including large scale marine environmental monitoring in the deep ocean. i. Consulting Companies in the Deep Sea Mining Industry Below is a list of the main consultancy companies actively offering geological and environmental services in the DSM sector. Geological Company RCS Global Coffeys

Overview International Consultancy International Consultancy

SRK Consulting

International Consultancy

Golder Associates International Consultancy

DSM related services Research and advise to DSM industry Provided Nautilus Minerals with an EIA for Solwara 1, 2008 and Neptune Minerals with an environmental audit in 2011. Provided Nautilus Minerals with an ‘Offshore Production System Definition and Cost Study’ in 2010 Provided Nautilus Minerals with the ‘Mineral Resource Estimate, Solwara 1 Project’, 2008

Environmental Company Marine Space MESL Marine Ecological Surveys Blue Planet Marine SRSL

Overview Environmental Consultants Marine Consultants

Marine Consultants Marine Consultants

DSM related services Consultants with experience in sea dredging Scientific advice on the impacts of major industrial and construction developments in the marine environment. Marine consultants to oil, gas and mining industries Specialising in Renewable Energy, Aquaculture and Mineral Mining 8

IV.

Industry Suppliers

Numerous opportunities exist for companies supplying services and products to the DSM sector, from direct construction of vessels and operating systems, to the provision of entire offshore exploration services. An example of some industry suppliers are listed in the table below. Company Hydro-Lek

MacGregor

DeepGreen Resources Bauer

Products and Services Offered Hydraulic fittings to fully integrated telemetry-controlled robotic manipulator systems for integration onto ROVs and remote access platforms Cargo flow solutions for maritime transportation and offshore industries Vessel for production of polymetallic nodules

Rexroth Bausch

Drill rigs for offshore foundations (wind farms, oil&gas) and marine exploration (SMS deposits, gas hydrates). Drive and control solutions for offshore industry

Marum

Sea floor drilling rigs

Siemens

Vessel electrics

GE Oil and Gas

Equipment and services’ providers in the oil and gas space

OceanflORE

Integrated contact mining solutions for mine owners Multidisciplinary marine site survey and 2D exploration seismic survey

Gardline CGG

Company Supplied / Comments

Website http://www.hydro-lek.com/

Nautilus Minerals with cranes for processing ship

http://www.cargotec.com/englobal/macgregor/pages/defa ult.aspx http://www.deepgreenresour ces.com/

Secured investment for Glencore and Glencore Xstrata contracted to purchase Ni and Cu

https://www.bauer.de/en/bm a/maritime_technologies/

Supply Nautilus with the entire electrical installation for the production support vessel Supplying Nautilus with the Subsea Slurry and Lift Pump (SSLP) for their production support vessel

http://www.boschrexroth.co m/en/xc/industries/machinery -applications-andengineering/offshore/offshore https://www.marum.de/en/M arine_Technology.html http://www.siemens.com/ent ry/cc/en/ https://www.geoilandgas.com /

http://www.oceanflore.com/7 Currently supplying Nautilus Minerals with exploration services

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http://www.gardline-cgg.com/

V.

Environmental Concerns

The main concern for the DSM industry, as an emerging and untested operating sector, is environmental, with largely unknown and potentially wide spreading environmental impacts. Although the impacts would differ depending on deposit type, the main overall effects are;    

Loss of substrate; Effects of mining on the seabed, The operational plume and re-sedimentation and; Discharge plume from dewatering and its effects on pelagic and/or benthic fauna.

The three deposits types are expected to return different environmental results based on the duration of the impact, the size and area affected, the nature of the impact and the potential for recovery. The extraction processes expected to have the greatest effects are; disaggregation, lifting and dewatering. Aside from the direct effect of the loss of substrate and the impact of mining activities in the immediate locality, sediment plumes generated from activities can stretch for kilometres, potentially smothering ecosystems located well beyond the deposit site. DSM would also have a number of socio-economic and socio-cultural impacts, such as;    

Impacts on fisheries Marine traffic Other (e.g. Telecommunications) Impacts on cultural/historical resources (e.g. Shipwrecks etc.)

As a result of some of the information gaps surrounding the potential environmental, social and economic impacts of DSM, a number of anti DSM organisations have formed, such as ‘Deep Sea Mining Campaign’, which is particularly focused on the Solwara 1 project. Nautilus Minerals has set up a ‘Community Accountable, Responsible Environmentally and Safe’ (CARES) program to highlight their efforts to operate in a socially and environmentally responsible way. ‘The Solwara 1 project will involve depositing 245,000 tonnes of waste rock onto the seabed and releasing 10 million tonnes of contaminated water into the ocean per year’ (Mining.com, 2013). In 2013, the ‘SPC-EU Deep Sea Minerals Project’ was initiated with the aim on improving the governance and management of the deep sea mineral resources of the Pacific Community (SPC), with ‘particular attention to the protection of the marine environment and securing equitable financial arrangements for Pacific Island countries and their people (http://www.sopac.org/dsm/).

VI.

Environmental Opportunities

A significant opportunity exists for companies operating in the marine environmental monitoring sector. The ISA has issued a series of environmental recommendations and guidelines for contract holders. A number of suggestions were proposed at an ISA held workshop in 2011. Resulting from this, it was proposed that operators will be required to submit a full EIS as part of a mining application and will be required to provide a detailed account of;    

The regional overview of the offshore environment Studies Completed Special considerations for the site Meteorology and air quality 10

     

Geological setting Physical oceanographic setting Water quality Sediment characteristics Biological environment (pelagic, mid water and benthic) Noise

Applicants will be required to submit details of plans surrounding the organisational structure and responsibilities of the proposed environmental team, the environmental management system and plan, including the monitoring plan and closure plan. Chapters outlining the environmental impacts, mitigation and management measures, description of potential impact categories, results of mining operations and detailed descriptions of the proposed environmental management measures, will also be required. It is clear that large scale marine environmental monitoring will be a necessary component of any DSM operation in the future.

VII.

Industry Outlook

The world’s undersea reserves are estimated to include 10 billion tonnes of polymetallic nodules, with an average grade of ~30% manganese, 1.5% nickel, 1.5% copper, and 0.3% cobalt and a variety of minor REE’s. $150 trillion+ worth of gold are estimated to be in the seabed, (Pros and Cons of Deep Sea Mining, 2013). As such, the prospectively of the seafloor is very high and the potential economic returns substantial. ‘Japanese geologists estimate that a single 2.3 km2 patch of seafloor might contain enough rare earth materials to sustain global demand for a year’ (Michael Lodge via World Economic Forum). However, in its infancy, the industry faces a number of significant challenges including technological challenges of extraction and operation, environmental, legislative and socio-economic issues. The current aim of the ISA, which governs exploration and mining in international waters, is the have a financial, fiscal framework for exploitation in place by 2016. It is expected that once a framework is in place, seabed exploration activities will be opened up to private companies and as such, activity in this sector is expected to increase. If the Nautilus Minerals Solwara 1 project goes into operation (potentially as early as 2016 – 2017) and the operational and environmental management issues surrounding such a project prove both achievable and economic, the DSM sector could expect to see significant expansion as a viable source of, to date, wholly untapped mineral deposits and it is clear that large scale marine environmental monitoring will be a critical part of any DSM operation in the future.

VIII.  

Strategy Suggestion FIXO3 partners should target the DSM sector, to provide deep sea environmental monitoring services. FIXO3 representatives should the 2016 Deep Sea Mining Summit (2015 Summit held in Scotland in February)

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IX.

References

Sterk, R. & Stein, J.K. (2015), ‘Seabed Mineral Resources: A Review of Current Mineral Resources and Future Developments’. Paper presented to: Deep Sea Mining Summit. Aberdeen, Scotland, 910 February 2015 Lipton, I (2008), ‘Mineral Resource Estimate, Solwara 1 Project, Bismark Sea, Papua New Guinea’. Canadian NI43-101 form F1. Golder Associates Report ECORYS. ‘Study to investigate state of knowledge of deep sea mining’, Final report Annex 6 Environmental Analysis, FWC MARE/2012/06 – SC E1/2013/04. The International Seabed Authority in collaboration with the Government of Fiji and the SOPAC Division of the Secretariat of the Pacific Community (SPC) in Nadi, Fiji, ISA Technical Study: No. 10. ‘Environmental Management Needs for Exploration and Exploitation of Deep Sea Minerals’, Report of a workshop held by from 29 November to 2 December 2011, ‘Deep Sea Mining: The new resource frontier?’ Michael Lodge, World Economic Forum, http://reports.weforum.org/outlook-global-agenda-2015/future-agenda/emerging-issues-deep-seamining/ UNEP Global Environmental Alert Service (GEAS), ‘Wealth in the Oceans: Deep sea mining on the horizon?’ http://www.unep.org/pdf/GEAS_May2014_DeepSeaMining.pdf ‘Pros and cons of Deep Sea Mining, Infographic, 2013, www.miningaustralia.com.au/features/thepros-and-cons-of-deep-sea-mining http://deepsea-mining-summit.com/access/index http://reports.weforum.org/outlook-global-agenda-2015/future-agenda/emerging-issues-deep-seamining/ www.sopac.org/dsm/ www.mining.com www.nautiliusminerals.com www.diamondfields.com www.whoi.edu/main/topic/seafloor-mining

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