Could the key to the green transition be nestled on the ocean floor? The hunt for minerals vital to an electrified future has sparked a race to the bottom of the sea. To get the lay of the land, Double Take recently spoke with Walter Sognnes, chief executive officer (CEO) of Norwegian subsea-mining company Loki Minerals.

According to Sognnes, companies are hunting for mature deep-sea mineral resources called polymetallic nodules.

They are enriched of a very large amount of the minerals we need for the green transition. It is copper, it is cobalt, nickel and manganese and some other rare earth minerals. But it is the copper, nickel and cobalt that is the main value… It is on the deep oceans, it is far away. It is out in long distance from shore. That is where they are formed.

Walter Sognnes, CEO of Loki Minerals

Paradoxically, oil and gas companies are most practised reaching such depths due to their experience in offshore production. Sognnes believes that that a new subsea mining industry is likely to be developed on the shoulders of offshore drilling innovations.

In Sognnes’ view, the richest terrain for nodules may be the Clarion-Clipperton zone between Hawaii and Mexico where subsea extraction efforts have existed since the 1970s.

Then the many large multinational companies were doing surveys and trying to extract these manganese nodules, and they were at the water depth of 4,000, 5,000 metres, while the oil and gas industry has just arrived down to a hundred metres of water depth. So, they were too mature or too early. So then, it fizzled out. And now that the green transition is coming, we see a huge demand for several of these critical minerals, and we potentially see a large gap coming between supply and demand. The oil and gas industry are now operating – and have been operating for many years now – on these water depths. So, it is kind of the technology has matured, the value of the minerals have reached a level where it makes economic sense to do it.

Walter Sognnes

While scraping nodules is a relatively inexpensive process, the major cost is transporting the nodules to shore and processing them. Sognnes believes that investments in cost reduction should prove fruitful, particularly as it becomes clear the best terrestrial mines have already been developed, and new supply is likely to be lower grade.

If you turn to the ocean and almost 70% of the world is covered by water and the deep oceans are covering almost 50% of the globe or the Earth. And for some of these critical minerals, 70% to 90% of the remaining resources are believed to be in deep sea minerals. So, it’s a huge, huge volume and it should definitely be able to give the supply that the green transition needs.

Walter Sognnes

One key hurdle, Sognnes believes, may be determining who holds the permits to explore certain ocean areas, and what nations can claim jurisdiction over these zones.

You can simply divide the ocean in two parts. It is within one country’s exclusive economic zone, where that country is having control over the resources and how they manage or develop those resources. And then outside that, it is in international waters and that is where the law of the sea is applied. And according to UNCLOS (The United Nations Convention on the Law of the Sea), you are actually able to start extracting resources now… what was done in 1994, I think it was, everyone agreed that we should have a set of rules to regulate this and not having a first come first serve. So, that is why the ISA (International Sea Authority) was established… all the licences that the ISA has given out are purely exploration licences. So, the big debate now is what happens when ISA approves the regulations for production?

Walter Sognnes

To hear more, subscribe to “Double Take” on your podcast app of choice or view the Mining’s race to the bottom episode page to listen in your browser.


Jack Encarnacao

Jack Encarnacao

Research analyst, investigative, Specialist Research team

Raphael J. Lewis

Raphael J. Lewis

Head of specialist research

This is a financial promotion. These opinions should not be construed as investment or other advice and are subject to change. This material is for information purposes only. This material is for professional investors only. Any reference to a specific security, country or sector should not be construed as a recommendation to buy or sell investments in those securities, countries or sectors. Please note that holdings and positioning are subject to change without notice. This article was written by members of the NIMNA investment team. ‘Newton’ and/or ‘Newton Investment Management’ is a corporate brand which refers to the following group of affiliated companies: Newton Investment Management Limited (NIM), Newton Investment Management North America LLC (NIMNA) and Newton Investment Management Japan Limited (NIMJ). NIMNA was established in 2021 and NIMJ was established in March 2023. MAR006090, Exp 04/29

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