Interest in deep sea mining increases during precious metals bull markets. With increased demand for precious metals and minerals for electronics manufacturing and other purposes, investments in deep sea mining projects has resumed.
Gold, silver and other precious metals exist in ore deposits within the earth’s surface. This includes the surface underneath the oceans, covering over 70% of the surface. Deep-sea mining is considered the next frontier in the quest for gold.
The focus is primarily on polymetallic nodules, polymetallic sulphides, and cobalt-rich ferromanganese crusts which contain metals like nickel, copper, cobalt, manganese, and rare earth elements.
The extreme conditions of the deep sea lead to increases in cost, which is a reason why interest in serious exploration of these resources has been limited. In the ocean, miners and mining equipment are subject to extreme pressure, freezing temperatures, and corrosive elements. pose significant technical and operational challenges.
The significant technical and operational challenges impact the bottom line. While new technologies including Remotely Operated Vehicles, seismic and sonar imaging technologies and innovations in drilling and extraction. These advancements come at a high cost of technology and uncertainty in recovering sufficient mineral quantities can make deep sea mining a risky financial venture.
Despite these risks, there are some Arctic countries leading the way. Last month, Norway’s parliament passed an agreement that allows for opening up the countries waters to deep sea mining exploration, despite pushback from environmentalists and the fishing industry.
Despite years of improvements, there are still environmental issues effecting the industry. Mining operations can lead to the destruction of habitats and loss of biodiversity.
Already the largest oil producer in Europe, Norway’s politicians see this as a promising emerging industry that will create jobs.
Many see the advancement as a potentially lucrative opportunity. However, it is an industry in its infancy, fraught with environmental, operational, and financial risks. The potential environmental impacts, particularly on the largely unexplored and fragile deep-sea ecosystems, are a major concern and subject to ongoing international debate and regulation.
The nascent stage of the industry, combined with environmental concerns and regulatory uncertainties, makes it difficult to accurately predict profit margins.
The profit margins for deep sea mining are uncertain and highly speculative. While the potential value of deep-sea minerals is significant, the costs of extraction and processing are also substantial.