Fostering technological change through regulations conducive to responsible mining of ocean mineral resources
18 October 2019
University of Antwerp, F. de Tassiszaal - Hof van Liere, Prinsstraat 13 - 2000 Antwerpen (route: UAntwerpen, Stadscampus
Kris Van Nijen
Prof Steven Van Passel
PhD defence Kris Van Nijen - Faculty of Business and Economics
Metal demand continues to increase due to rising global population, urbanisation, and to meet society’s clean energy goals. Polymetallic nodules are rock concretions (the size of tennis balls) consisting largely out of minerals. They are found in the Pacific Ocean at 4,500 meters water depth. It is estimated that these nodules contain more nickel, cobalt and manganese than all land-based reserves combined. By 2020, the UN International Seabed Authority (ISA) will deliver the world’s first set of exploitation regulations for polymetallic nodules found on the seabed of the area beyond national jurisdiction (“the Area”). The ISA, an intergovernmental body to manage all mineral-related activities in the Area, was established by the Law of the Sea Convention (LOSC) in 1994. The LOSC designates its resources as the common heritage of (hu)mankind and calls for the development of the resources (by attracting investment and technology), and the protection of the marine environment for the benefit of (hu)mankind. Under an exploitation contract, contractors receive the right to exploit polymetallic nodules in return for a payment, which must be fair for both the ISA and the contractor. The ISA must ensure these proceeds are equitably shared among all members taking into particular consideration the interests and needs of developing States.
This dissertation provides valuable insights into the interaction between regulatory development and the impact on a contractors’ decision to invest in new “biased” technological change (i.e., technological change that lowers the environmental impact relative to the status quo), thereby contributing to the awareness of the ISA. The author hereby focusses on the five-year multi-stakeholder participation process (2015-2019), that led to the draft exploitation code. After section one offers a general introduction, section two provides a synthesis of workshop proceedings, ISA technical papers and scholarly literature, offering more detail on the multi-stakeholder process that led to a payment system. In section three, a stochastic techno-economic assessment is delivered to model the impact of different payment rates on the economic performance of a polymetallic mining project. In section four, a risk assessment evaluates the financial, technical & institutional risks and provides insights into the minimum (private) financial return required to attract investment. Chapter five analyses different technology and environmental policy instruments that foster biased technological change. Finally, the author concludes with new insights on the impact of the proposed regulations on technological change required for responsible deep sea mining.