This is our first deep-sea mining insight since joining Haynes Boone, and it marks a continuation of the work we have long done in this sector. Over recent years we have advised on, and written about, the legal and regulatory frameworks governing seabed minerals, from the International Seabed Authority’s Mining Code negotiations to the revival of the United States Deep Seabed Hard Mineral Resources Act and the emerging disputes that now sit between them. We remain committed to supporting clients across the deep-sea mining value chain, including contractors, sponsoring states, investors, offtakers and processors, as they navigate an increasingly contested landscape.
Few industries have changed as quickly over the past 12 months. This short series of insights is a moment to take stock: we draw together the key regulatory, commercial and legal developments of the year, consider what they mean for the industry and identify the issues we expect to shape the year ahead.
For readers new to the sector, deep-sea mining is the exploration for, and recovery of, mineral resources from the ocean floor, typically at depths of several thousand metres. Three main types of seabed mineral resources attract commercial interest: polymetallic nodules, potato-sized concretions lying on the abyssal plain that contain concentrations of nickel, copper, cobalt and manganese; cobalt-rich ferromanganese crusts, which form on the flanks of seamounts; and seafloor massive sulphides, which form around hydrothermal vents.
The best-known nodule province is the Clarion-Clipperton Zone (“CCZ”), a vast area of the Pacific Ocean located between Hawaii and Mexico, but seabed minerals are also found within the exclusive economic zones (“EEZs”) of coastal states, such as the Cook Islands, Japan and the United States. Where resources lie within a state’s EEZ or continental shelf, that state regulates their development under its own domestic law and applicable international provisions. Where they lie in the seabed beyond the limits of national jurisdiction – known as “the Area” – they are designated the common heritage of mankind under Part XI of the United Nations Convention on the Law of the Sea (“UNCLOS”) and the 1994 Implementing Agreement, both of which are administered by the International Seabed Authority (“ISA”), an autonomous international organisation headquartered in Kingston, Jamaica.
The ISA regulates activities in the Area through contracts with state-sponsored entities. To date, the ISA has issued 31 exploration contracts to 21 contractors and more than USD $2 billion has been invested in exploration in the Area since 2001. However, no commercial exploitation has yet been approved: the regulations that would govern exploitation, commonly called the “Mining Code”, remain under negotiation by the ISA Council and are supported by its Legal and Technical Commission. It is against this backdrop of a long-running regulatory gap that the developments of the past year should be read.
Deep-sea mining stands at a crossroads. Over the past year, accelerating commercial and governmental interest in the critical minerals found on the ocean floor has collided with sustained calls for environmental caution, producing one of the most dynamic and contested regulatory landscapes in the energy and natural resources sector. These developments reflect the growing prominence of the sector amid the global focus on critical minerals for national security and the energy transition, and highlight the emerging tensions between private, national and multinational interests playing out in an increasingly complex geopolitical environment.
Four regulatory arenas now interact. The first is the multilateral framework administered by the ISA under UNCLOS, which is still working towards a Mining Code for exploitation. The second is the U.S. domestic regime under the Deep Seabed Hard Mineral Resources Act of 1980, which the current administration has revived. The third comprises coastal-state regimes within EEZs, where Japan, the Cook Islands, the United States and others are moving ahead. The fourth newly activated this year is dispute resolution before the Seabed Disputes Chamber (“SDC”) of the International Tribunal for the Law of the Sea (“ITLOS”). The industry faces two competing regulatory frameworks, potentially setting the stage for jurisdictional conflicts, overlapping claims and inconsistent regulation and permitting requirements.
Underlying all of this is the critical minerals imperative. Polymetallic nodules contain concentrations of nickel, copper, cobalt and manganese, and the seabed also hosts sulphides and cobalt-rich crusts. Competition over these resources and over rare-earth-bearing muds is now a direct driver of regulatory change, with states increasingly framing seabed access as a matter of supply chain resilience independent of China.
This series explores each of the four regulatory arenas. The first installment explores the ISA’s efforts in developing exploitation regulations, with future editions focusing on the U.S. Executive Order and DHSMRA, developments in states’ EEZs and the dispute before ITLOS.
