Deep Sea Mining and the struggle for Global Mineral Supremacy: Thoughts and Recommendations

Recent moves by the U.S. government to accelerate deep-sea mining are being portrayed as measures to increase mineral security and to reduce mineral dependence on China, but SDSG legal intern Maria Guillamont tells us the evidence points to a more complex reality.

By Maria Guillamont

EXPERIMENTAL SEABED MINING (credit: ak rOCKEFELLER via Flickr, CC BY-SA 2.0).

introduction

Our world is in the midst of an era of rapid change. This era has been characterized by rapid globalization: whether viewed economically, politically or socially, our world is defined by intense interconnection among countries and the integration of a world market. What happens in one corner of the world can and often does affect the rest. Changes or disruptions in one place create and accelerate changes and disruptions elsewhere. Most populations rely on products that are dependent on delicate supply chains, often extending throughout several continents. 

The United States is at a crossroads in this age of globalization. There has been a recent push for “self-sufficiency”–to turn its back on risky integrated global supply chains and build domestic ones instead–especially in one area: critical minerals. As part of this push, the current administration has begun stockpiling critical minerals, instituting incentives and financing programs, leveraging its economic power with allies and partners, and preparing to mine the deep seabed.

This paper argues that this is an enormously costly and dangerous gamble, and the hurried federal push to mine the deep sea is a particularly poignant lens into the problems of this approach to critical minerals. It risks alienation from partners, raises serious litigation problems, and does not have an answer for the structural changes necessary to build an independent, domestic critical mineral supply chain.

Developing such a supply chain in the United States, while other nations continue engaging in multilateral trade frameworks, requires a fundamental reshaping of US trade relations, not to mention risking serious trade disputes—with the World Trade Organization, for example—along the way. Supply chain transparency further complicates matters: tracing the provenance of minerals across a web of international intermediaries is extraordinarily difficult, and unilateral attempts to wall off that system could disrupt allied relationships the U.S. depends on for its broader economic and security interests.

Critical mineral strategy in the US is responding to very real supply chain concentration risks, most notably in China. But leveraging raw economic power or diving headfirst into a deep sea mining quagmire stands to exacerbate these risks rather than confront them. These do not involve incremental expenses either; they constitute foundational infrastructure investments that would take years, if not decades, to materialize into a functioning supply chain. Huge commercial investments in deep sea mining and beyond carry serious environmental damages amid a murky legal regime, opening the United States to millions in potential litigation without real promise of achieving the stated goals.

A more pragmatic and effective path to addressing the very real risks in critical mineral supply chains lies in deepening collaboration within the existing international market, leveraging allied relationships, and working through multilateral institutions.

The Supply Chain of Critical Minerals

Critical minerals are the basis for practically all modern tech; they sit inside everyday objects like smartphones, vacuums, and electric vehicles, but are also an integral part of defense and critical infrastructure systems like missile guidance systems and power grids. The US Department of the Interior has identified fifty-four minerals as necessary for our modern economic system, therefore dubbed “critical”. Four of them specifically stand out for their strategic value: lithium, nickel, cobalt, and graphite. They are foundational to the emerging, electrified energy economy, as they form the core inputs of lithium-ion technologies, which power drones, grid storage, and most modern electronics. These minerals are therefore seen and treated as strategic assets central to economic infrastructure and national security leverage, making secure access to them a strategic priority.

No one knows this better than China. Today, China is the leading refiner for 19 out of 20 strategic minerals and dominates most of the rare earth value chain, accounting for about 70 per cent of the world’s rare-earth mining and 90 per cent of processing. Through a series of strategic policies in the form of government investments, the belt and road initiative, and manipulation of prices, China has created a near-monopoly. This is risky; as the International Energy Agency has warned, this level of supply chain concentration leaves the industry wide open to global disruptions and is a potential geopolitical time bomb. 

Already, critical minerals have been a trump card in political negotiations. China's Ministry of Commerce announced in October 2025 that it would set export control measures on Rare Earth Elements (REEs) and related items. These restrictions included "internationally made" products containing Chinese-sourced materials or manufactured using Chinese technologies, even if they are traded domestically. They also set policies that sought to prevent direct or indirect contributions of Chinese-origin REEs to foreign defense supply chains, meaning companies with affiliations to foreign militaries will be largely denied export licenses. There have been subsequent diplomatic "pauses" to these control measures, as well as partial resumptions based on the state of US-China trade negotiations, but the reality of the single-supplier risk remains. 

China’s government has constructed a solid geopolitical chokehold. The future of global supply chains for electronics, weapons, and countless household appliances, necessarily must, in some way or form, run through China. 

Relevant here is China’s distinctive financial and governance structure, which is central to understanding its dominance in the global critical-mineral supply chain. Many of the country's major mining and refining firms are either state owned or privately held with close links with the government. This structure allows the Chinese government to provide below-market credit, loan guarantees for high-risk ventures, and direct subsidies, functionally creating a state-driven vertically integrated procurement, refining, and distribution network. This is a system that can be mobilized, changed or manipulated for geopolitical purposes. When Beijing perceives a strategic threat from emerging competitors, it can coordinate among these firms to drive down mineral prices, effectively shutting out new entrants. A private-sector mine in the West, for example, often cannot achieve financial viability if China floods the market and pushes prices to artificially low levels. 

This has happened in the past; in the early 2000s, the U.S. dominated cobalt mining in the Democratic Republic of the Congo (DRC). Today China is the driving force in the Congo, as companies, backed by state financing, rapidly bought out US firms.

Such intense concentration carries a number of risks, no matter who controls it. Many industries depend on China for supply of these critical components for the global economy, which means that important sections of the global economy are one political crisis, export ban, natural disaster, or shipping delay away from major disruptions. The global community has already gotten a taste of this. Last year, the DRC, a major global supplier of cobalt, instituted an export ban on cobalt as a ploy to increase its domestic processing industry, resulting in sudden price hikes and market volatility extending well beyond immediate cobalt sourcing concerns. This year, Zimbabwe did the same, part of an increasing trend of African “resource nationalism”; nations asserting control over their critical minerals to maximize domestic returns. These trends add layers of complexity and risk to an already risky highly concentrated supply chain.

Enter the Trump Administration. 

Fears of China’s ability to use these minerals as a geopolitical trump card and the related push for American minerals self-sufficiency have led the Trump administration to aggressively implement a set of mineral-focused measures. In October, Trump made a deal with Australia, home to the largest publicly traded critical minerals miner in the world, Lynas Rare Earths for both countries to invest $3 billion in critical minerals projects by mid-2026. Trump then signed a series of bilateral trade deals with provisions on critical minerals with countries in East and Southeast Asia, including Japan, Malaysia, Thailand, Indonesia, and Cambodia. The U.S. also has new deals with Ukraine, Argentina, the Democratic Republic of the Congo, Rwanda, Kazakhstan, and many more.

But that is not all. Within its first months in office, the Trump administration issued an executive order in response to what was deemed a “critical mineral crisis”, as increasing dependence on foreign sources for essential materials was perceived as a strategic vulnerability. Since then, this concern stimulated renewed policy and industrial interest in alternative sources of supply, including the exploration of deep-sea mineral deposits as a potential means of enhancing resource security and technological competitiveness.

Deep-Sea Mining and the U.S.–China Mineral Race: A “Solution” Riddled With Problems

The current administration views deep sea mining as a potential lifeline for the U.S in its efforts to reduce reliance on China. The ocean floor, particularly in areas like the Clarion-Clipperton Zone (CCZ) of the Pacific, is thought to have trillions of polymetallic nodules rich in nickel, cobalt, copper, and manganese.

For U.S. policymakers, it appears that seabed mining offers an incredible opportunity: a vast, untapped source of critical minerals that could secure domestic supply chains. However, this solution is far from simple.

Unlike terrestrial mining, where companies and investors have centuries of knowledge and proven technological solutions, Deep-Sea Mining is a novel venture. The expected economic returns of commercial seabed mining are very unlikely to add up. Ocean explorer and retired Navy officer Victor Vescovo points to deepwater oil projects like Australia’s Gorgon gas field, which was originally projected to cost $11 billion but ultimately exceeded $54 billion. This is a cautionary tale; big ocean projects are expensive and accident-prone. Evidence indicates that deep-sea mining could follow the same trajectory, with massive cost overruns and uncertain returns. Deep-Sea mining involves vacuuming nodules from the sea floor at depths of 4,000–6,000 meters, operating heavy machinery in corrosive, near-freezing waters under immense pressure. Vescovo notes, “It is an incredibly hostile environment; it rips up anything mechanical or electrical.”

And even if these expensive engineering hurdles were overcome, a deeper bottleneck remains: processing.

RAND’s public policy research tells us that refining and processing account for more than half of the total cost of producing usable mineral compounds. Yet only a handful of facilities worldwide can handle seabed nodules, and modifying existing terrestrial plants requires costly retrofits. Building them now is unlikely, as without long-term offtake agreements, (binding commitments from companies to purchase the output) investors are reluctant to back up billion-dollar processing plants upfront. Because of the legal and environmental issues surrounding the industry, discussed further below, investors and potential buyers are hesitant to engage. The industry, therefore, is in a dilemma. Without refineries, nodules are useless; without nodules, refineries won’t be built. And there is little way around these issues without substantial government guarantees and intervention.

As we’ve seen, China’s dominance lies not only in mining itself but in processing and refining. And unless the United States develops domestic or processing capabilities in friendly countries, deep-sea mining would simply shift dependency from one form of supply chain vulnerability to another.

This is not the only problem that mining the deep sea poses. Beyond economics, seabed mining operates in murky legal and environmental waters. Some of the proposed commercial leases are in the Clarion-Clipperton Zone, an area in international waters. According to international law, any resources in areas beyond national jurisdiction are “common heritage of humankind”, meaning no one country has the full right to lay claim to them. If they do, other countries deserve fair compensation. The International Seabed Authority (ISA), established under the U.N. Convention on the Law of the Sea (UNCLOS), oversees mining activities in international waters. The ISA has been drafting regulations for commercial seabed mining for several years, as key issues remain unresolved and heavily contested; including building a resource-sharing agreement and how to apportion liability for environmental harm. 

Even in the areas the U.S. is leasing to deep sea mining companies within its territorial waters—in American Samoa and CNMI— the federal government is faced with fierce opposition from local Pacific Island communities. 

According to The Ocean Foundation, deep-sea mining’s liability regime is “in flux.” Eight reports and a synthesis commissioned by the ISA since 2017 have yet to yield clarity on fundamental questions like who pays when something goes wrong. If deep-sea mining damages fisheries, displaces marine species, or creates sediment plumes that disrupt coastal economies, (all issues that scientists and environmental organizations have raised in campaigns and administrative processes against the deep-sea mining industry) affected parties could sue mining contractors, or even the sponsoring states that authorize them. There is an argument for legal liability under UNCLOS, as states are liable for negligence if they fail to exercise “due diligence” in supervising companies operating under their flag.

Deep Sea Mining is not the right path forward

The United States has not ratified UNCLOS and thus cannot sponsor companies directly. American firms like The Metals Company (TMC) have therefore registered under the flags of small Pacific Island nations, such as Nauru, which may face disproportionate legal and financial risks. If lawsuits arise years later, these states could find themselves on the hook for huge sums in damages.

China, meanwhile, has been investing heavily in shaping ISA rules, yet the United States remains on the sidelines. As a non-party to UNCLOS, it has no formal vote or representative in ISA decision-making, which cedes a lot of power in the drafting of seabed mining regulations to Beijing and its allies. China, meanwhile, has positioned itself as the ISA’s largest funder and hosts training programs for developing-country scientists. Through this deep sea diplomacy, it has built influence not just over the legal framework but also over the next generation of technical experts and regulators.

If the seabed becomes the next major frontier for critical minerals, this imbalance could have far-reaching consequences. Without a seat at the table, the U.S. risks being locked out of the very system that will govern future seabed resource extraction, a strategic echo of its current dependence on Chinese rare earth processing.

Even for China, reliance on this dangerous, unproven, and costly approach is misguided. These decisions are being driven by geopolitical competition, not by thought-out legal, economic, or strategic interests. Instead of pursuing zero-sum competition, it is time for our foreign policy establishment to reject the logic of unlimited geopolitical rivalry. Rather we should be establishing multilateral mechanisms to foster global collaboration and an equitable distribution of the benefits of the technological advancements dependent on natural resource extraction–whether they originate in the deep sea or our own back yard.

If the United States wishes to reduce strategic dependence on China while avoiding a race to the bottom, it must approach seabed mining with a blend of diplomacy, research, and restraint. Some new policy pathways could be conducive to these goals.

Our Public Policy recommendations

1. Establish Leadership in Key Global Frameworks

The U.S.’s current isolationist and unilateralist approaches are sidestepping and alienating natural allies, while ceding influence to others in important international fora. Ratifying UNCLOS would give the U.S. a formal voice in ISA deliberations on the deep-sea mining regulations. Membership would allow the U.S. to influence environmental standards, liability rules, and revenue-sharing mechanisms, rather than leaving those decisions to the rest of the world, heavily influenced by China and Russia. Supporting the UN Secretary General’s Initiative on Energy Transition Critical Minerals and pursuing critical minerals trade partnerships that are genuinely equitable would establish the U.S. as a leader in mineral diplomacy.

Legal and naval warfare theorists have also argued in favor of the US ratification and engagement, highlighting the “vital U.S. interest to promote and strengthen the rules, norms, regimes and laws that support an open order of the oceans, and these standards are formed by and are reflected in customary international law and the United Nations Convention on the Law of the Sea”. 

The author wants to highlight that this is not naive faith in a sudden federal embrace of multilateralism. The current administration's skepticism of international institutions is well-documented, and there is no expectation here of an immediate conversion to a rules-based-order worldview. But there is an important difference between principled skepticism and strategic self-isolation. The former can coexist with targeted, interest-driven engagement with trading partners. The latter cannot.

The United States is currently failing at the latter. And, notably, this is one of the clearest reasons why U.S. influence on the international stage has weakened at a moment when it can least afford to.

2. Strengthen Alliances and Partnerships

Foreign policy objectives and mineral security can only be achieved by working with allies and low/middle income partners to establish transparent, sustainable mining, processing and circularity frameworks. Supporting countries like the DRC in building value-added industries, such as refining and recycling, could offset the economic losses they may face if seabed mining displaces terrestrial mining revenues. It would also come at a lower cost to the U.S. taxpayer.

3. Invest in Research and Transparency

The U.S. should fund independent studies on the environmental, economic, and security impacts of seabed mining. Scientific collaboration, not industrial secrecy, must guide policymaking. As RAND researchers warn, the information space around seabed mining is “primed for misinformation.” Transparent data can prevent panic, misinformation, and inform science-based regulatory approaches.

4. Develop Responsible Processing and Recycling Capacity for Critical Minerals

Even if the U.S. does not mine the seabed directly, it can lead in building environmentally responsible processing and recycling technologies. This approach would leverage American innovation while avoiding the environmental backlash likely to accompany early commercial deep-sea mining. Providing financing or investment guarantees for facilities that adhere to best practice industry and procurement standards would create an ecosystem for responsible critical minerals and shift attention away from risky and harmful forms of mining in the deep sea.

Conclusion

China’s new export controls underscore a fundamental truth: in the global race for critical minerals, control over processing and technology matters more than control over ore. While the current administration may plow forward and mine the deep sea, without parallel investments in processing, diplomacy, and legal frameworks, it could simply replicate the same dependencies that now bind the United States to China while creating a host of environmental, economic, and legal problems in the process. The “craze” over critical minerals is responding to very real risks of supply chain concentration, but the current strategies for addressing these risks, in particular deep sea mining, are not going to solve these problems. Indeed, there is reason to believe they will make them worse.

The United States stands at a crossroads. It can continue to react to China’s maneuvers or it can chart its own course, grounded in rule of law, scientific integrity, and international cooperation.