Study Suggests Deep Sea Mining Could Be a Loss-Making Proposition
A report by the environmental consultancy Koinon, sponsored by five NGOs and foundations opposed to rapid commercialization of deep-sea mining, stress-tested the business model of two projects belonging to The Metals Company. Running 10,000 simulations, Koinon found the median outcome would result in no meaningful return, with negative net cash flow in every year in 60% of iterations and a median internal rate of return of 4% among runs generating a positive return. The report concludes an 83 percent probability of returning a loss and a median net present value of -$5 billion at an 8 percent discount rate, against TMC's own projected $23 billion.
Why it matters: The study bears on critical minerals supply, because the simulated economics of seabed manganese nodules and the projected offset to terrestrial nickel, cobalt, copper and manganese tax revenue inform the debate over alternative sources of industrial metals.