If commercial mining of seabeds is to prove viable, specialist machinery such as robot submarines will need to be developed. AFP
If commercial mining of seabeds is to prove viable, specialist machinery such as robot submarines will need to be developed. AFP

India sees ocean floor as ripe for mining



In the classic 1870 Jules Verne novel 20,000 Leagues Under the Sea, underwater explorer Captain Nemo predicted the mining of the ocean floor's mineral bounty - zinc, iron, silver and gold.

India is catching up with that only now, as it prepares to unearth treasures down below, aiming to boost its economy.

The floor of the world's seas is scattered with vast beds of black potato-shaped polymetallic nodules comprising copper, nickel, cobalt, manganese, iron and rare earth elements.

These natural goodies are key to making modern gadgets, from smartphones and laptops to pacemakers, hybrid cars and solar panels.

As expanding technology and infrastructure fuel global demand for these resources - whose supply is dwindling fast onshore - more and more countries, including manufacturing powerhouses India and China, are eyeing the ocean.

"We have to depend on ocean resources sooner or later ... there is no other way," said Gidugu Ananda Ramadass, head of India's deep sea mining project at the National Institute of Ocean Technology (NIOT) in the southern city of Chennai.

"For the future of mankind ... the ocean is the only hope," he said.

India, Asia's third-largest economy, is going full steam ahead in anticipation of the International Seabed Authority (ISA) - a UN body that oversees mining on the high seas - giving the green light for commercial exploitation, Reuters said.

Captain Nemo appeared to get one thing wrong, however, in asserting deep sea minerals "would be quite easy to exploit".

Over the next decade, the Indian government plans to pump in more than $1 billion to develop and test deep-sea technologies like underwater crawling machines and human-piloted submarines, according to the earth sciences ministry.

It will require large, remote-controlled machines capable of combing the seabed and collecting the rocks. Not to mention a system of transporting tonnes of rock to the surface," Carsten Rühlemann of Germany's Federal Institute for Geosciences and Natural Resources (BGR) told The National in a 2013 interview.

"The machines have to be able to work for a long time because they would take about a week to lower to the seabed and a week to raise again," he said.

"So if they don't function properly it will be prohibitively expensive to fix them. It will take a while for this to be commercially viable."

If it works, for India the equipment will be able to reach depths of up to 6km, where metals can be 15 times more concentrated than in land deposits.

The ISA allows India to explore an area in the Indian Ocean of 75,000 square kilometres, equal to about 2 per cent of the country's size.

Once thought to be too costly and difficult, industrial-scale sea mining could begin as early as 2019.

Canada's Nautilus Minerals is on track to become the first company to start operations, which it plans to launch near the Pacific island nation of Papua New Guinea, according to a company statement.

All countries are as yet in the experimental or exploratory phase, and the ISA is still hammering out regulation and royalty terms for commercial mining.

The prospect has excited India, which depends heavily on China, the world's biggest producer of elements.

China provides about 90 per cent of rare earths, which are used in aviation and defence manufacturing.

It has four of the 29 licences awarded by the ISA, and Beijing controls more exploration areas in the high seas than any other country, according to the Jamaica-based intergovernmental agency.

Experts say India is most interested in copper, nickel and cobalt, as it ramps up clean power generation.

Cobalt, also produced in Democratic Republic of Congo, is used to make batteries that can store energy from renewable sources, including solar and wind.

"These metals are not widely available in India, so they have strategic importance," said Mr Ramadass, whose team is set to trial mining at a depth of 5,500 metres by 2022.

India's goal is to become self-reliant in the minerals, and it is "not in a race with anybody", he added.

"We are exploring Mars, we are exploring the moon, why don't we explore our own oceans?" he said.

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Experts warn that in the absence of a clear international charter, deep-sea mining operations could cause irreversible damage to a little understood ecology.

Indian environmentalist Richard Mahapatra fears private players could sound the death knell for Earth's "final frontier", of which he said only 0.0001 per cent has been explored.

The seabed is home to a unique ecology where colonies of organisms and creatures have evolved over millions of years, free of wild currents, sunlight, vibrations and noise which mining would bring, said Mr Mahapatra, managing editor of the New Delhi-based science and environment magazine Down To Earth.

According to a 2017 study by Britain's National Oceanography Centre, mining experiments at seven sites in the Pacific Ocean showed the amount and diversity of marine life was reduced "often severely and for a long time".

Sediment plumes and disturbance caused by mining could wipe out habitats for slow-growing corals and fish, Mr Mahapatra said.

It could also have long-term effects on how the ocean, which absorbs carbon dioxide and heat, regulates the world's climate.

While the 1982 UN Convention on the Law of the Sea already includes regulation of mineral-related activities, environmentalists say the rules are not good enough.

Mr Mahapatra urged countries to put vested interests aside in agreeing the new ISA framework, given the damage humans have already done to the planet's atmosphere, land and surface water.

"Deep sea mining will be pure commerce, but there are certain situations where you cannot put profit before people," he said. "We should not rush it, otherwise we will head towards another disaster [environmental damage]."

India's deep ocean exploration programme dates back more than two decades, during which it has been surveying the sea floor and testing environmental impacts, according to the National Institute of Oceanography (NIO) in the western state of Goa.

NIO scientist NH Khadge said the upcoming ISA guidelines, which its 168 member states will sign up to, would require contractors to "plan minimum disturbance" at the sea floor.

BK Thakur, a senior scientist at New Delhi's Ministry of Earth Sciences, said compared to land mining, seabed operations would be the lesser of two evils.

Sediment kicked up by underwater mining would dissolve and resettle, and there would be no carbon emissions, unlike on land, he noted.

"There would be no need to build roads, infrastructure or ... relocate communities - nothing major like we see on land," he added. But some experts warned even minor alterations could cause substantial harm to marine habitats and sea creatures.

"Mining for nodule resources on the seafloor is likely to be highly destructive in the mined area, with long-lasting impacts," said Daniel Jones, author of the NOC report.

Minimising India's mining footprint is a challenge, said Mr Ramadass, adding its technology would be as "environmentally friendly" as possible.

With the plan only to scoop up mineral nodules rather than digging into the sea floor, flora and fauna would not be destroyed, he believes.

But there would be some disturbance, he conceded.

"We cannot avoid that," he said.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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