On the outside, they look like clumps – rough balls the size of potatoes. Manganese nodules are formed slowly in sediments deep undersea and they hide a veritable treasure trove of raw materials researchers hope can be mined profitably some day.
They contain industrial metals such as copper, nickel and cobalt, in addition to rare and valuable metals like molybdenum, lithium and neodymium, which are eagerly sought for electronics and electro-technology.
But extracting this bounty from the ocean depths, and make money doing so, is the challenge.
A group of 12 scientists is searching for these treasures in the name of Germany. The group is from the Federal Institute for Geosciences and Natural Resources, or BGR, and just embarked on the U.S. research ship “Kilo Moana” in the central Pacific Ocean. Their goal is a rich belt of manganese nodules, scattered along the ocean bottom between Hawaii and Mexico, about 5,000 meters (more than 3 miles) below the surface.
The potential value of the area for which Germany holds a license is between $6 billion and $10 billion.
Germany holds a license there that could be worth billions of euros. The expedition is tasked with determining how rich the nodule deposits are and how they might be mined for profit.
“One factor is the density of distribution of manganese nodules,” explained Christian Reichert, head of marine raw-material research at BGR.
The value of the metals fluctuates according to prices on the international commodities markets. The current estimate is that the potential value of the area for which Germany holds a license is between $6 billion (€5.3 billion) and $10 billion.
Deep-sea research has been conducted by many countries in recent years, although it is not yet economically feasible to extract the minerals from very deep down.
The International Seabed Authority, based in Jamaica, has issued some 30 licenses worldwide – including to Germany, China, France, India, Japan, Russia, South Korea, Cuba and a consortium of eastern European countries.
The search for underwater minerals could help guarantee supplies for industry, especially for strategically important metals.
The Deep Sea Mining Alliance is also studying the economic viability and long-term access to deep-sea minerals. “Manganese nodules, cobalt-rich manganese-ore deposits, massive sulfides and phosphorite nodules are of greatest interest,” it stated.
The alliance was founded in April 2014 and members include famous firms like the mechanical engineering company Bauer, in addition to research institutes such as Clausthal University of Technology in Lower Saxony.
The group’s goal is to guarantee supplies of these rare metals and to find “new sources of raw materials.”
Even if there is currently no shortage of most raw materials, this could change quickly. “In the future, more metals will be needed,” predicted Josef Auer of Deutsche Bank.
Because of the world’s increasing population, now is the right time for such expeditions, in spite of low commodity prices, he said. “Nonetheless, deep-sea mining will be an issue for the next generation,” said Mr. Auer.
Germany is proceeding with the search and currently holds two licenses. The basis for the new expedition, which will last 42 days, is a treaty signed in 2006 with the International Seabed Authority. Since 2015, Germany also holds a license to explore for massive sulfides in the Indian Ocean.
The German license area in the Pacific covers 75,000 square kilometers. The scientists have already been there eight times.
Up to now, Germany has invested between €25 million and €30 million in probing the ocean floor. “These are investments in the future – long-term investments in a risk-filled area,” said Mr. Reichert.
The German licenses in the manganese-nodule area run until 2021. By then, it must be clear whether deep-sea mining is possible and feasible.
Up to now, there has been no proof, according to international standards, of how metals could be separated from the manganese nodules at a profit. And there is heated controversy over the impact on maritime life on the sea floor. Here as well, German scientists are investigating the effects of maritime mining.
Developments on international commodities markets will determine the point at which such an undertaking makes economic sense.
“At the moment, maritime mining lies slightly below the estimated profitability threshold,” said Mr. Reichert of the Federal Institute for Geosciences and Natural Resources.
Prices for important industrial metals such as copper are only just recovering, after hitting multi-year lows. For that reason, large mining companies like BHP Billiton and Rio Tinto reduced or even canceled investments on land as well.
Mining companies hope above all for an economic recovery in China. With its immensely high demand, the country once assured vigorously rising prices on the commodities markets.
In its most recent forecast of metal prices, Commerzbank doesn't exclude short-term declines. But its analysts are convinced there will be higher prices for metals in the mid- to long-term.
“On one hand, supply will most likely be limited in many markets,” the Commerzbank analysis stated. “And on the other, demand will increase.”
Handelsblatt's Regine Palm writes about commodities, along with companies and markets and finance. To contact the author: [email protected]