Insight: Norway eyes sea change in deep dive for metals instead of oil
12/01/2021 14:48
* Could license exploration from 2023
* First production seen this decade
* Green technologies spurring metals hunt
* Study to assess impact on deep-sea ecosystems
By Nerijus Adomaitis
OSLO, Jan 12 (Reuters) - Norway's oil and gas reserves have
made it one of the world's wealthiest countries but its dreams
for deep-sea discovery now centre on something different.
This time, Oslo is looking for a leading role in mining
copper, zinc and other metals found on the seabed and in hot
demand in green technologies.
Norway could license companies for deep-sea mining as early
as 2023, its oil and energy ministry told Reuters, potentially
placing it among the first countries to harvest seabed metals
for electric vehicle batteries, wind turbines and solar farms.
That could also place it on the front line of a controversy
over the environmental risks posed by exploiting the world's
unexplored seabeds, however.
Norway on Tuesday announced it was starting preparations for
an environmental impact study needed to open areas of its seabed
mineral exploration and production.
The move follows three years of expeditions on which Norway
has found deep-sea deposits containing copper, zinc, cobalt,
gold and silver, according to the Norwegian Petroleum
Directorate which conducted the work.
There could be up to 21.7 million tonnes of copper - more
than the world's copper output in 2019 - and 22.7 million tonnes
of zinc on the Norwegian continental shelf, Norwegian University
of Science and Technology (NTNU) researchers have estimated.
Mean estimates however are far lower, at 6.9 million and 7.1
million tonnes, respectively.
"Copper mining inside Norway's jurisdiction will probably
never replace extraction onshore, but ...it can be an important
contributor in meeting future global demand," NTNU Associate
Professor Steinar Loeve Ellefmo told Reuters.
"Deep-sea mining might also change the geopolitical
climate," he said.
The metals have been found in polymetallic sulphides, or
"black smokers", which are formed when sea water reaches magma,
heats up and is flushed back to the seabed carrying dissolved
metals and sulphur.
The expeditions have also discovered high concentrations of
lithium and the rare earth metal scandium used in electronics
and alloys in manganese crusts which grow on bedrock, the
Directorate said.
Norway has mapped these deposits along the Mid-Atlantic
Ridge between Jan Mayen Island and the Svalbard archipelago in
the Norwegian Sea as far as 700 kilometres (435 miles) offshore.
TIMELINE
Once completed, the government plans public consultations on
its environmental impact assessment and on a proposal for
opening areas for exploration and production by the end of 2022
followed by debate and a vote in parliament in the second
quarter of 2023.
"Were parliament to decide to open up, exploration licences
could be issued - possibly in the second half of 2023 or in
2024," the oil and energy ministry said.
"We are moving forward on this, and the momentum is high,"
Oil and Energy Minister Tina Bru told Reuters. "This is an
industry with great potential."
Japan has similar plans but its project with private firms
is not expected to begin before some time between 2026 and 2028,
an official at the Japanese Agency for Natural Resources and
Energy told Reuters.
Timing will depend on metals prices and reducing the costs
of deep-sea mining, the official said.
The United Nations' International Seabed Authority (ISA),
which regulates seabed mineral activities in international
waters, has approved 30 contracts for exploration with China
holding the most with five.
The Jamaica-based ISA was forced to postpone plans to
approve rules governing the production of deep-sea minerals to
2021 from last year due to the COVID-19 pandemic.
Norway, however, doesn't have to wait as its resources are
not in international waters.
ENVIRONMENTAL CONCERNS
Though demand for the metals on offer is being driven by
clean technologies, exploration of the seabed presents
environmental challenges of its own.
Environmentalists including Britain's David Attenborough
have called for a moratorium on deep-seabed mining until more is
known about species living on the seabed and the potential
impact on them. Greenpeace in a recent report called for a
permanent ban. urn:newsml:reuters.com:*:nL8N2E055N
"Greater knowledge of the environmental impacts, as well as
the ability to mitigate these to acceptable levels, is required
before we can be confident that engaging in industrial-scale
deep-seabed mining would bring a global net benefit," said an
expert report published last month commissioned by the Ocean
Panel.
The Ocean Panel is co-chaired by Norway and groups 14
coastal states that seek to shape policy on the world's oceans.
"We are not saying a complete and final "no" to seabed
mining, but we know that it can have very substantial impact on
the seabed habitat, more than oil and gas extraction," said
Peter Haugan, a professor at the University of Bergen and one of
the report's co-authors.
Giant tube worms, clam shells, crabs and micro fauna all
rely on the bacterial oxidation of chemicals in fluids in the
hydrothermal vents where seabed minerals are found, according to
the ISA.
Companies seeking exploration licences say they will focus
their attention on inactive "smokers".
"I believe Norway can do this in a sustainable way, but we
have to do it step by step, which has been a key success factor
for developing our oil and gas industry," Oil and Energy
Minister Bru said.
PIVOT FROM OIL
While oil and gas have made Norway rich, the country of 5.4
million is keen to find alternatives to gradually replace its
top industry and to play its role in greener energy and the
growth it offers.
Deep-sea mining could generate up to $20 billion in annual
revenue for Norway towards 2050 - compared to around $61 billion
from oil and gas in 2019 - and create about 20,000 jobs,
Oslo-based consultancy Rystad Energy has estimated.
Seabird Exploration SBX.OL , which maps out the seabed for
oil and gas deposits, plans to list a deep-sea mining subsidiary
on the Euronext Growth Oslo small-cap bourse this quarter.
The Cyprus-based firm believes production could start by the
late 2020s and could apply technologies used in the oil and gas
sector.
"We will need to design from scratch the production system,
but the basic elements are there ... it will be a mixture of
mining and petroleum technology," Seabird Executive Chairman
Staale Rodahl told Reuters.
Nordic Mining NORG.OL also said it would seek exploration
licences while Norway's largest energy firm Equinor EQNR.OL
and oil-focused investment group Aker AKER.OL have not yet
decided whether they will get involved, they said.
State-run Japan Oil, Gas and Metals National Corp (JOGMEC)
successfully conducted the world's first test involving the
excavation and raising of deep-sea minerals to the surface off
Japan in 2017.
"It sounds fantastic to go deep for minerals, but remember
what the oil and gas industry has achieved over the last 50
years, and you can stand on the shoulders of it," said Walter
Sognnes, chief executive of start-up LOKE Marine Minerals and a
former co-founder of several oil firms.
(Additional reporting by Yuka Obayashi in Tokyo; editing by
Gwladys Fouche and Jason Neely)
((nerijus.adomaitis@thomsonreuters.com; +47 9027 6699; Reuters
Messaging: nerijus.adomaitis.thomsonreuters@reuters.net))