M-Cubed Research Consulting

“There is a sense, a dawning sense, that the past structure of international relations has become irretrievable” 

Very recently, I had an interesting conversation with Professor James Scourse (University of Exeter), a leading proponent of the United Kingdom’s Moratorium on Deep-Sea Mining: and, although our position on exploration differs, we agree that “much of the discussion over critical minerals derives from the need to protect security of supply… it is a political issue.”

January was an exciting month for M-Cubed Research Consulting: not least as we started to put forward our vision at a Chatham House networking event.

The tone here was set by Sir Nigel Sheinwald, who very eloquently highlighted the “dawning sense that the past structure of international relations has become irretrievable”

Regionalisation seems to be the new Globalisation. The global economy looks like it is shifting from a unipolar to multipolar structure, and this leaves countries feel increasingly more like competitors, than co-operators.  

With regard to critical metals, this competition is illustrated brilliantly in ELEMENTS by Visual Capitalist. A Venn diagram juxtaposing which elements are considered critical by the EU, American and Chinese markets highlight how much overlapping demand there will be for these minerals as we all strive to transition to a circular economy. You can find this diagram at https://lnkd.in/gYTXMvVN

In recent years, the vulnerability of global supply chains have been in clear public view: from frantic competition for personal protective equipment and coronavirus vaccines; to the impacts of both economic and armed conflicts in Europe and the Middle East.

The textbook steps to managing supply chain risk include reducing demand (reduce, reuse, recycle), resource substitution and diversifying primary production.

The idea of Deep-Sea Mining is an extraordinary example of diversifying primary production, which may be especially attractive to nations because it presents an new opportunity to build domestic means of production, in what will be a hotly contested market.

Johnny Harris recently posted a fascinating video called “Our New Global Economy” which opens with a clip of President Biden stating “Think about it, there is simply no reason why the blades for wind turbines can’t be built in Pittsburgh instead of Beijing. There is no reason why American Workers can’t lead the world in the production of electric vehicles and batteries.”

A similar political shift is seen in India, Australia, and Europe: as it has become clear that trade barriers have become a viable weapon of economic war. Examples include Russia cutting natural gas supply to Europe, or even the worlds largest Lithium deposit being ceded to Taliban after the allied withdrawal from Afghanistan.

You can find the Johnny Harris video here, http://tinyurl.com/Our-New-Global-Economy

I started studying marine minerals ten years ago, I remember being told that the industry was “in a race for second place” – that is a worrying prospect. Deep-Sea Mining will be destructive, and although a moratorium is becoming a reality – it feels to me like a growing deck of cards, in the strong winds of global change.

One of the most compelling arguments against deep-sea mining I have seen is the current advances in battery technology – particularly in substituting cobalt and nickel, two of the major critical metals that are found in polymetallic nodules.

In conversation with Professor Scourse, he explained that he “cannot see how exploration without some expectation of ultimate exploitation would be viable” – I feel that it is responsible to explore, to identify the optimum deposits, those that would have the least impact with respect to their resource, as a contingency.

That’s it – Deep-Sea Mining should be a contingency plan.

If actioned, Deep-Sea Mining must be done sensibly – I believe that succeeding in our mission will drive down environmental impact if Deep-Sea Mining becomes an unfortunate reality.

If critical metal substitution is not quick enough, if geopolitics continue down the road of rampant protectionism, if there is a shock in demand – we need to be prepared. We need to keep our options open.