John C. Wiltshire
University of Hawaii
Editor's Note: This status report on ocean mining economics and technology appeared in the Summer 2000 issue of the Marine Technology Journal and appears here with permission.
The extraction of marine mineral resources represents less than a $2 billion per year industry worldwide at the present time. There are approximately a dozen general types of marine mineral commodities (depending on classification), about half of which are presently being success-fully extracted from the ocean. Those being extracted include:
- Sand, coral, gravel, and shell for aggregate, cement manufacture, and beach replenishment
- Magnesium, for chemicals and metal
- Sulfur, largely for sulfuric acid
- Placer deposits for diamonds, tin, gold, and heavy minerals.
Deposits that have generated continuing interest, but are not presently mined, include manganese nodules and crusts, polymetallic sulfides, phosphorites, and methane hydrates. Each of these mineral commodities is represented by a separate industry that responds to local pressures and opportunities in its own geographic area.
Recent areas of success include rapid expansion of the diamond industry off the southwest coast of Africa and the expansion of the offshore sand and gravel industry in the United States for beach replenishment and elsewhere for construction aggregate. Also, there has been new industry interest in polymetallic sulfide deposit leasing and significant interest in the possible recovery of methane hydrates.
The marine minerals industry is dwarfed by the $100 billion a year worldwide offshore oil and gas industry. Much of the advanced technology that spills over into the marine mineral resources area was originally developed for the offshore oil industry.
The marine minerals industry, to the extent that the diverse group of entities lumped together in this report can be labeled a single industry, looks largely to the offshore oil industry to pioneer new technological innovations and applies them to their applicable extent.
The commercial successes of the marine minerals industry in the last five years have been in sand and gravel and offshore diamonds. Off the southwest coast of Africa, primarily Namibia, the offshore diamond industry now works down to 200 in., with leases extending to 1,000-meter depths. More than a dozen mining vessels are now involved in this expanding industry.
Many are equipped with sophisticated underwater robotic miners, such as the tramrod. De Beers Marine, one of the leaders in this field, recently purchased an autonomous underwater vehicle (AUV) to conduct remote underwater surveys for new prospects. Another company is experimenting with new techniques to sieve diamond gravels underwater to reduce the amount of material to be transported.
The quality of diamonds coming from offshore is proving superior to those found at many onshore sites because of natural sorting processes. Over the next five years the industry is likely to see more expansion, with increased technical sophistication in all aspects of this profitable industry.
Sand and gravel
At the other end of the value spectrum from diamonds are sand and gravel. In the US, significant amounts of offshore sand were dredged and placed back on beaches in beach replenishment programs. While expensive, this is proving to be the most effective way to handle beach protection. With the passage PL 103-426, signed by former US President Clinton in 1994, it is now possible to use sand, gravel, and shell resources from federal waters (generally beginning 3 miles offshore) for shore protection, beach restoration, or public works projects without a competitive lease sale.
This has resulted in significantly increased offshore sand and gravel activity. More than a dozen large offshore sand projects on the US East and Gulf Coasts are ongoing or awaiting approval. All of the projects use standard dredging and beach replenishment techniques.
Many of the newer dredges involved in these operations are heavily automated, mine high volumes of sand and aggregate, and can move significant quantities of material several miles in high-capacity pipe. The technology involved in this industry is being continuously upgraded with innovative developments being incorporated from European experience and from the offshore oil pipeline trenching industry.
For smaller projects, new, highly efficient truck-transportable dredges and even high-capacity hand-held jet pumps allow the movement of smaller amounts of sand with great control at low cost.
With respect to deeper water minerals, commercial interest has shifted to polymetallic sulfides (deposits at inactive hydrothermal vent sites) from manganese nodules and crusts. The government of Papua New Guinea has issued two leases on deposits in the Manus Basin south of New Guinea. Leases off Fiji are in the planning phase. The sulfide deposits involved are gold-and silver-rich in less than 2,000 meters of water.
Several small mining groups in the US and Australia, including Deep Sea Minerals, Nautilus Minerals, and Phelps Dodge, have expressed interest in these deposits. Exploration cruises have taken place, environmental plans have been formulated, and some consideration has been given to the mining technology.
To date there have been no equipment tests. The prime economic targets will be gold and silver, while zinc, lead, and copper are possible secondary targets. Studies of the economic potential of these deposits look promising. If these companies are able to raise the necessary capital, mining operations could begin within a decade.
Perhaps the potentially most significant development in deepsea minerals is in methane hydrates. This gas, frozen on the deepsea floor, has the potential to be the greatest untapped energy resource on the planet. A $60 million Japanese research program is currently focused on investigating this resource and is developing ways of commercially extracting it.
While little engineering information has been released from this program yet it appears, from early reports, the extraction of methane hydrates may be technically feasible. The successful commercialization of this kind of deep seabed, high value energy-mineral resource would have a profound effect on the development of other seabed resources, and for that matter, on all seabed projects requiring new technology to work at these depths.
Several trends are pushing forward the development of many types of marine minerals. These trends include:
- The outstanding success of both the deepwater oil industry and the offshore diamond industry
- Off-the-shelf reliable technology to work in 2,000 meter water depths
- Increasing wealth in the western world and more tolerance of high-risk ventures
- Growing world population with ensuing metal demands causing metal prices to rise
- Growing environmental consciousness, which makes new mines on land difficult to open
- Rapid advances in robotics, global positioning systems (GPS), marine biotechnology, and web-based control systems
- A stable international regime and law of the sea environment.
The combined result of these seven trends is, in general, a very favorable environment for the development of marine minerals.
A whole range of new, lower-cost and higher-efficiency marine technologies is making the marine minerals industry more cost competitive with land-based sources. Over the next 10 years, these will significantly change the face of the industry. Accurate low cost positioning systems using sophisticated GPS units have made it possible to locate deposits and position equipment very precisely.
One survey company just released a long-range, real-time kinematic positioning system with 20-cm horizontal and vertical accuracy over 800-km distances. Multi-beam bathymetric mapping systems now allow rapid, highly accurate coverage of large bottom areas. For sulfide deposits, new 3,000-meter depth-rated electric work remotely operated vehicles (ROVs) with two highly controllable manipulators are presently available off the shelf and can be run from a 6-ft screen at a theater-view control station.
AUVs are presently available for contract, equipped with sidescan sonar and sub-bottom profiler for exploration. Other significant innovations include GPS navigation systems connected to underwater acoustic transponders, improved underwater communication systems, linked satellite and buoy technology, marine leach mining systems, dynamic positioning, high resolution chirp-sonar for detailed bottom exploration, fast stable ship technologies, low-cost floating platforms, and new high-technology metal and ceramic alloys.
These technologies are being incorporated into every aspect of offshore mineral exploration, production, and transportation. They dramatically reduce costs and increase the competitive advantages of the offshore producer.
Manganese nodules, crusts
In spite of these technical advances in a range of key support industries, the development of manganese nodules and manganese crusts is still probably a minimum of 20 years away. One of the major reasons given for the slowness in the development of manganese nodules has always been the alleged failure of the Law of the Sea Treaty to provide adequate protection to seabed mining interests.
The US has renegotiated Part M of the treaty, and many of the concerns raised by the industry have been addressed in this revision, even if not fully solved to the satisfaction of every company. The Law of the Sea Treaty came into full effect in November 1994. However, the strong resistance of US Senator Jesse Helms (R-NC) to the Law of the Sea Treaty will likely prevent the US from acceding to the treaty any time soon.
In the meantime, the UN International Seabed Authority published draft regulations on prospecting and exploration for polymetallic nodules in August 1999. This 49-page document outlines standard requirements and methods for applying for permits to allow exploration. The document represents a good first step toward regulating a future nodule industry. The International Seabed Authority has recently begun work on regulations for other seabed minerals.
There are active government-backed nodule programs in South Korea, China, and India and a less active eastern European program. The program in South Korea has suffered under the Asian financial crisis, but continues to move forward. It recently awarded a contract to the University of Hawaii's mapping research group to demonstrate a sonar mapping capability for quantifying manganese nodule deposits.
The program in China has also been affected by the economic downturn and by a reorganization of government ministries that reduced the political access of the group. If Asia goes back into a period of economic boom, it is likely that these programs will be scaled up, as the fundamental forces driving them have not changed.
Particularly significant here will be the increase in disposable income of families in China and India. This is one of the reasons the government of China is so interested in a marine minerals industry. To supply the quantities of metals required will necessitate many new sources to be developed.
Harvesting these minerals from the ocean will also allow a major new domestic high-technology ocean industry to come into being. Equipment and expertise developed for a national deep-ocean mining industry will have a variety of other spin-offs for a wide range of other deep ocean applications, including marine biotechnology.
Nickel and cobalt
Nickel and cobalt prices currently are high by historical standards, with copper prices moderate. These prices had been depressed for many years in the early 1990s. With prices in this range, new leach mining systems for manganese crusts bring over a 30% internal rate of return.
Nonetheless, US industry generally has been reluctant to pursue this new opportunity. It is largely a matter of perceived risk. For most companies in the minerals business, working in the ocean is an unknown area, and clearly an area where some technical failures are both likely and difficult to manage.
High cobalt prices are also encouraging others into the cobalt-mining environment. If too many large land-based projects come on line, then the price of cobalt will go down. It is likely that a marine mining venture would have a higher cost of production than a new large terrestrial deposit.
In fact, such a deposit is under development at Voisey's Bay, Labrador, by the International Nickel Company (INCO). If this deposit comes on line as expected in the next decade, it will dominate both the nickel and cobalt markets. Initial estimates are that control of this one deposit will increase INCO's share of the world nickel market to 40%.
Several major new cobalt deposits are also rapidly being developed in Australia. This is shifting the balance of the cobalt mining industry from Zambia and Zaire in Africa to Australia and Canada. This will likely bring some price stability to the market, with prices almost certainly lower for cobalt than those experienced today. At the same time, new high-technology uses are causing the world market for cobalt to grow at 5-8% a year.
A new interest on the scene is marine biotechnology. The search for deepsea organisms, particularly hydrothermal vent bacteria, is the new Mecca for the marine miner. These organisms are used by drug companies and industrial-process engineers to provide genetic material that can be altered for industrial usage.
Some of these organisms can survive on the seafloor in temperatures up to 350° C and immense pressure. Living catalysts, able to stand these sorts of pressures and temperatures, would foster a wide range of industrial processes, including facilitating processes not presently economically or technically feasible.
The drugs that can be extracted from deepsea organisms also are exceptionally valuable because of the extreme potency of many marine toxins that may be useful in the fight against cancer. Submersibles and ROVs are used to collect these materials from the sea floor. They are then processed through labs and sent to the commercial sector.
The US National Science Foundation has just established the Marine Bio-products Engineering Center jointly with the University of California, Berkeley, and the University of Hawaii.
If current trends continue, world economic growth is likely to continue. The demand for construction aggregate will cause expansion in the offshore sand and gravel industry. The success of the offshore diamond industry will likely result in expansion to new areas already under consideration, such as off the northwest coast of Australia and Northern Canada.
New technology may make companies now considering polymetallic sulfides feel that the risk is more acceptable. Increased amounts of research and development money will flow toward the commercialization of methane hydrate and marine biotechnology discoveries. Govern-ment mining groups in Asia are already rehabilitating their manganese nodule and crust groups to address increased mineral demand. It is likely that these efforts will continue and perhaps even expand, but it is unlikely that any commercial development will occur in manganese nodules or crusts for at least 10 and probably 20 years.
In summary, the marine minerals industry is alive and well. Significant resources of a wide range of minerals exist, and they are becoming more attractive. New, cheaper, more efficient marine technologies are moving into every aspect of mineral exploration and processing. Within a decade or two, these can be expected to lead to a major expansion of the industry and a move into deep water.
John C. Wiltshireis with the Hawaii Undersea Research Laboratory at the University of Hawaii.