DSM could reshape metal markets and geopolitics, but high costs, regulatory uncertainty, and ESG risks limit investment and delay its viability
The global transition to clean energy, digitisation, and advanced manufacturing is expected to increase the demand for critical minerals sharply. As terrestrial ore grades decline and supply chains contend with geopolitical volatility, countries are considering deep-sea mining (DSM) as an alternative. From an ocean economics perspective, DSM extends beyond resource extraction to questions of how shared ocean spaces are governed, benefits are distributed, and supply chains are impacted.
DSM refers to the extraction of critical, economically significant minerals, such as manganese, nickel, copper, cobalt, titanium, molybdenum, zinc, lead, iron, gold, silver and rare earth elements from the ocean floor. Beyond terrestrial deposits, they are typically found as polymetallic nodules, ferromanganese crusts, and seafloor massive sulfides (SMS). In the Central Pacific Ocean, the Clarion-Clipperton Zone alone contains 21 billion tonnes of polymetallic nodules, with higher concentrations of nickel, cobalt, and manganese than all terrestrial reserves combined. The value of seabed minerals ranges from US$8 to US$16 trillion.
From an ocean economics perspective, DSM extends beyond resource extraction to questions of how shared ocean spaces are governed, benefits are distributed, and supply chains are impacted.
The International Energy Agency (IEA) projects the overall demand for critical minerals to increase sixfold by 2040. Between 2017 and 2022, the demand for lithium could triple, cobalt rise by 70 percent, and nickel by 40 percent (under net-zero scenarios). At the same time, terrestrial ore grades are declining, extraction costs are rising, and supply chains remain geopolitically concentrated. DSM, if commercially viable, could be an effective diversification strategy. Even the World Bank estimates that the production of minerals, such as cobalt, graphite, and lithium, will rise by 500 percent by 2050 to meet clean energy demand.
However, this economic viability is conditional. Techno-economic assessments suggest that polymetallic nodule mining could generate competitive returns under favourable price and royalty assumptions, but these projections are highly sensitive to metal price volatility and unvalidated cost estimates. Cobalt prices, for instance, more than tripled between 2016 and 2018, before collapsing.
Despite its transformative potential and benefits to traditional blue economy sectors, such as shipping, fisheries, and maritime tourism, DSM’s unclear ownership rights complicate efficient and equitable resource allocation. Moreover, as many deposits lie beyond national jurisdiction, they fall under the purview of international institutions that regulate access, allocate benefits, and preserve the ocean commons. Additionally, circular economy pathways (including large-scale recycling and greater adoption of less mineral-intensive battery chemistries) may reduce long-run demand pressures. So, DSM’s viability depends not just on mineral scarcity, but on the pace at which these alternatives mature.
India’s demand for critical minerals is linked to its energy transition goals. India's updated Nationally Determined Contribution (2022) raised its emissions intensity reduction target to 45 percent and reaffirmed its goal of 50 percent electric power from non-fossil fuel sources by 2030. Additionally, the National Critical Mineral Mission aims for net-zero emissions by 2070. Lithium, cobalt, nickel, and copper are central to electric mobility, battery storage, and renewable energy. While these efforts indicate India’s strategic commitment, the country remains import-dependent for several of these inputs, exposing it to supply disruptions and price volatility.
India's updated Nationally Determined Contribution (2022) raised its emissions intensity reduction target to 45 percent and reaffirmed its goal of 50 percent electric power from non-fossil fuel sources by 2030.
India has held pioneer investor status under the United Nations Convention on the Law of the Sea (UNCLOS) since 1978, and has exploration contracts with the International Seabed Authority (ISA) for polymetallic nodules in the Central Indian Ocean Basin, covering approximately 75,000 square kilometres and an estimated 380 million tonnes of nodules. It also has exclusive contracts for polymetallic sulphides along the Central Indian Ridge and the Carlsberg Ridge.
Fig.: Seabed Mineral Deposits and ISA Exploration Contracts by Country
Source: The International Seabed Authority, 2022
These activities are part of the Ministry of Earth Sciences-led Deep Ocean Mission with a five-year outlay of US$438 million (₹4,077 crore). India's active alignment with the ISA, including participation in the Mining Code negotiations and advocacy for equitable benefit-sharing, positions it as an important voice in shaping the governance of the ocean commons.
For Global South countries central to current critical mineral supply chains, including the Democratic Republic of Congo, Indonesia, Chile, Argentina, and South Africa, DSM represents both a strategic opportunity and a structural risk. Exploration interests could provide greater resource security and strategic autonomy. However, high upfront capital requirements, regulatory ambiguity, and ESG-sensitive capital markets dampen investor confidence, limiting access to project financing and raising the cost of DSM ventures.
Large-scale DSM supply could also drive down global metal prices and render high-cost terrestrial mines unprofitable. Transitioning international investment towards DSM could reduce capital inflows, hamper competitiveness, lead to premature mine closures, and leave behind environmental liabilities in countries where mining revenues fund public services. India will have to balance technological ambition with ecological caution.
The deep sea remains one of the least understood ecosystems. The world is yet to test the environmental impacts of commercial-scale mining at a scale comparable with terrestrial operations. DSM extraction could cause biodiversity loss, habitat elimination, sediment plume dispersion, toxin release, and ecosystem disturbance. Recovery may be exceptionally slow, particularly for polymetallic nodules that grow only millimetres over millions of years.
UNCLOS also identifies the deep sea as the ‘common heritage of humankind,’ reinforcing that specific global commons cannot be owned, but must be managed collectively for the benefit of all.
Under UNCLOS, sponsoring states must apply the precautionary approach whenever plausible risks of serious harm exist, even in the absence of scientific certainty. This elevates the ecological uncertainty of deep-sea mining into a binding legal constraint. UNCLOS also identifies the deep sea as the ‘common heritage of humankind,’ reinforcing that specific global commons cannot be owned, but must be managed collectively for the benefit of all. This raises classic global commons dilemmas: how to prevent over-extraction, ensure equitable rent distribution, and manage cross-border externalities.
For India, this implies a need for significant regulatory capacity: specialised scientific expertise, independent monitoring systems, and transparent enforcement. With deep-sea baseline ecological data still limited, investment in oceanographic research and institutional capability-building is inevitable before approving commercial DSM operations.
The DSM industry lacks broad legal acceptance. France and Portugal have banned DSM, Germany, Canada, the United Kingdom, and Mexico have called for moratoria, and major brands, including Samsung SDI, Google, and BMW, have rejected DSM-sourced minerals. DSM could majorly impact fisheries in areas that are also prospective mining zones, affecting food security and employment in island economies. These developments suggest that environmental and ethical concerns are increasingly shaping legal limits on DSM.
Though extraction takes place offshore, onshore processing infrastructure can affect coastal communities and local land use.
DSM also faces significant social risks. Experiences such as the Solwara 1 project in Papua New Guinea illustrate how distrust, weak local consultation, and greenwashing can derail DSM projects. Though extraction takes place offshore, onshore processing infrastructure can affect coastal communities and local land use. When the Cook Islands government moved to fast-track DSM licensing in 2023, it faced significant opposition from fishing communities and civil society groups, demonstrating that without genuine consultation, coastal communities can reject DSM regardless of projected economic returns.
The governance framework for DSM is still evolving, and how it is written will determine whether the deep sea becomes another site of inequitable extraction or a genuinely shared resource. India has so far been a passive participant in seabed negotiations, holding exploration contracts and maintaining institutional relationships, without actively shaping the terms of the debate. However, it must play a much larger role given that resource access, ecological risk, governance of the commons, and the developmental trajectories of mineral-dependent economies are at stake. India must:
By strengthening domestic capacity and shaping international rules, India can retain DSM as a contingency while pursuing lower-risk pathways, such as circularity, recycling, and responsible terrestrial sourcing to secure its critical mineral supply. India's influence over DSM will not be determined by whether it eventually extracts from the seabed, but by how actively it helps write the rules that govern it.
Priya Noronha is a Research Intern at Observer Research Foundation
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
 (1).jpg)
PREV
