The Geopolitics of Critical Minerals: How the Race for Critical Minerals is Shaping the Discourse of Deep-Sea Mining in the Pacific
Written on February 28th, 2024 by Iain A. Rommel, Geoff Ford, and Pascale Hatcher
Securing access to critical minerals is now at the forefront of most governments’ strategy. Critical minerals are categorised as serving an essential function in the manufacturing of a product vital to a country’s economic and/or national security and are often characterised by a supply chain vulnerable to disruption (see US Energy Act of 2020). Minerals that fall into this category include lithium, nickel, manganese, and cobalt. These mineral elements are essential both for the military-industrial complex and the green transition, such as in the production of solar and wind technologies, as well as electric vehicles.
On the military side, it is illustrative to note that in 2008 alone, the United States Department of Defence used approximately 106,000 tons of copper, making it the second most used material in US defence production by weight. But the green transition is also pivotal in pushing demand for strategic minerals. The International Energy Agency forecasts that renewable energy technology will make up over 60 percent of the demand for nickel and cobalt and 90 percent for lithium.
Amidst a global rise in demand for critical minerals, Deep Sea Mining (DSM) is becoming reality. The Pacific sea floor has an abundance of “polymetallic nodules” - potato sized rocks - which can contain a mixture of rare earth elements and critical minerals. With an estimateof over 21 billion dry tons of polymetallic nodules, the Clarion-Clipperton Zone (CCZ) would have more critical minerals than all global terrestrial reserves.
While DSM activities have yet to begin on a commercial scale, Pacific Island Countries (PICs) and their communities are in the midst of considering whether to embark on the new venture and if so, under what terms. But the matter has, in recent years, become increasingly entangled with the urgency to secure critical minerals, by some of the world’s biggest powers: the United States and the People’s Republic of China (PRC). What remains unclear is how this global race for critical minerals will play into existing geopolitical tensions in the region, and in turn, influence the discourse around DSM. Crucially, there is a risk that this “securitization of DSM” will narrow the political spaces for PICs to discuss whether to embark on the DSM venture.
What is unmistakable is that both Beijing and Washington are invested in research pertaining to DSM and critical mineral exploration, with the issue itself surrounded by a strategic competition discourse that emphasises the need of either side to outcompete the other.
China is currently the dominating presence pertaining to DSM and critical minerals vis-à-vis the United States. China currently exerts a quasi-monopoly over the supply chain of critical minerals – it refines 68% of the world’s nickel, 40% of copper, 59% of lithium, 73% of cobalt and 90% of manganese. Additionally, China has been investing in deep sea research for decades, making it a clear world leader in technological advancements in the sector.
China was one of the five initial applicants to register as an investor for DSM with International Seabed Authority (ISA) in 1990 – following France, Japan, India and the USSR. The ISA is an autonomous international organization established under the 1982 United Nations Convention on the Law of the Sea (UNCLOS) to “ensure the effective protection of the marine environment from harmful effects that may arise from deep-seabed-related activities.” Today, Chinese state-owned corporations share a total of five exploration contracts with ISA (out of 31 contracts in total) – three contracts went to China Ocean Mineral Resources R&D Association (COMRA), one to China Minmetals Corporation and one to Beijing Pioneer Hi-Tech Development Corporation. This represents more contracts than any other country. China is further active at the ISA level with initiatives such as the ISA-China Joint Training and Research Center (JTRC). Established in 2019, the Center aims to promote capacity-building and the transfer of knowledge and technology to developing countries. ISA states that the establishment of the Center “speaks volumes about the commitment and determination of the Chinese government and ISA to jointly promote capacity building and science and technology exchanges in the deep-sea field among developing countries.”
Beijing’s lead in the DSM space, coupled with continued multilateral engagement in DSM research, is not lost on policymakers in the United States, making DSM an increasingly significant geopolitical and national security topic for Washington policymakers. It is worth pointing out however that to this day, the United States has not ratified UNCLOS and is not a member of ISA.
The United States government, think tanks, and companies are addressing the reliance on the PRC’s dominated supply chains for critical minerals in national security terms. For example, in 2022, the Centre for a New American Security and the United States Institute of Peace discussed that the country’s absence in the DSM space could “empower malign actors” and suggests that “US companies will fall further behind” their Chinese counter parts.
In an article from the New Security beat – the Wilson Centre’s Environmental Change and Security Program blog – it is suggested that DSM could alleviate “security of supply risks” pertaining to production from China and other “fragile” states. Also posited is that China’s DSM activities in the Indo-Pacific could provide Beijing with additional knowledge in the form of “underwater surveillance” and “topographical mapping.” It is speculated that seabed mining activities in the region could be used to “justify greater Chinese naval presence in the region” and be adapted for a “military advantage.”
Commentary from RAND, an American nonprofit policy institution, further discusses that China’s dominance in critical mineral supply chains leaves the global availability of such minerals vulnerable to trade restrictions, political instability, and “other disturbances,” and that therefore DSM “could present a unique opportunity to act on policy proposals to diversity the supply and processing of critical minerals.” It concludes that “seabed mining may be a way to diversify critical minerals supply chains and break China’s stranglehold on supplies of some of the world’s most important natural resources.” This discourse around DSM further warns that Chinese DSM activities could be used to shelter other nefarious activities, as exemplified within another RAND research report suggesting: “host and sponsoring nations and seabed mining authorities monitor Chinese seabed mining technology development and exploration activity” to ensure activities are “entirely research or commercial in nature”.
On the United States government side, Executive Order 14017 from 2021, states that “the United States needs resilient, diverse, and secure supply chains to ensure our economic prosperity and national security.” The essence of the Order directs agencies across the federal government, including the Department of Defense and the Department of Energy, to ensure measures are aimed at securing supply chains by diminishing reliance on external providers of critical minerals.
Particularly noteworthy is the passing of the United States National Defense Authorization Act (NDAA) of 2024. The Act explicitly addresses critical mineral security by tasking the Department of Defense to evaluate critical mineral supply chain vulnerabilities and achieve supply chain independence from foreign adversaries. Signed into law on December 22, 2023, Section 1414 of the final version of the Act, titled Critical Mineral Independence, states that it is the policy of the United States “to expand secure sources of supply of critical minerals, including rare earth elements, in the United States and in countries that are allies or partners of the United States to meet the needs of the United States defense sector so that the Department of Defense will achieve critical mineral supply chain independence from covered countries, including the People’s Republic of China.” Furthermore, it requires the Under Secretary of Defense for Acquisition and Sustainment to submit to the appropriate committees of Congress a “strategy to develop supply chains for the Department of Defense that are not dependent on mining or processing of critical minerals in or by [the Democratic People’s Republic of North Korea; the People’s Republic of China; the Russian Federation; and the Islamic Republic of Iran].”
This comes on the heels of the introduction of S.1871 - Intergovernmental Critical Minerals Task Force Act – that was introduced in the US Senate in June, 2023 with the explicit purpose of establishing “intergovernmental coordination between State, local, Tribal, and territorial jurisdictions, and the Federal Government to combat United States reliance on the People’s Republic of China and other [policy-specific] countries for critical minerals and rare earth metals.”
Of additional interest is the corporate response to the state-led security narratives. For instance, in 2022, The Metals Company (TMC), a Canadian mining corporation at the forefront of the race to mine polymetallic nodules on the seafloor, was lobbying the United States government to explore the potential of deep-sea nodules to “strengthen national security and reshore supply chains for the energy transition.” Furthermore, in a press release at the time, TMC points out that French President Emmanuel Macron has committed over €300 million for deep-sea mineral exploration, as part of his Vision 2030 investment plan, while the India’s President Modi was allocating $600 million for its ‘Deep Ocean Mission’, which includes work on its polymetallic nodule contract area in the Indian Ocean.
Following the June 2023 US Congressional hearings, TMC added a promotional video on its website entitled “The Critical Minerals Supply Chain” in which it argues:
while we [the United States] may be ahead in technology and innovation, we have a fundamental problem. We do not own the supply chain: China does. […] it is now in a strong position to dictate the terms [of the supply chain]. […] So what can the United States do? Accept our dependence on China and learn to live with potential supply chain disruption? No; we can’t build an industry with this vulnerability. […] Polymetallic nodules can be collected and brought to American soil and processed by American companies. […] The United States has a choice: we can try to play catch up with China in the conventional metal supply chain or we can innovate and secure our own future.
Proponents of DSM argue that recovering polymetallic nodules on the ocean floor is a more appropriate method for the critical mineral collection needed for a transition to a decarbonized economy. Specifically, TMC advances that traditional terrestrial mining activities for critical minerals involve “escalating economic, social, and environmental costs,” and that DSM is a solution to ease the burden on “fragile terrestrial ecosystems.” TMC further states that access to land-based deposits is getting increasingly more challenging and many land-based mining activities not only require expending more capital but experience issues with labour rights and violations such as child labour in cobalt mining in the Congo.
Given the contemporary emergence of government and non-government responses from the United States with respect to China’s deep historical ties to DSM and the ISA, questions remain as to how this may impact local actors in the relevant geographic regions, particularly in the PICs. As great power rivalry between Washington and Beijing plays out as energy security politics in the form of DSM, how will this influence local and indigenous Pacific Island communities? In other words, will the increased securitization narratives around DSM further narrow the political spaces for local actors to debate whether to push forward with DSM, and if so, on what terms?
Cite:
Rommel, I. A., Ford, G., & Hatcher, P. (2024, February 28). The Geopolitics of Critical Minerals: How the Race for Critical Minerals is Shaping the Discourse of Deep-Sea Mining in the Pacific. Mining the Sea Project: Analysing the Actors and Controversies Driving the Adoption of the World’s First Deep Sea Mining Governance. https://miningthesea.net/geopolitics-of-deep-sea-mining