Catalyst N° 063 of 125 22 May 2025
What to make of Trump’s deep-sea minerals push
with Hans Smit, president and CEO, Ocean Minerals
In this note
The question
What does the Trump administration’s executive order on deep-sea mining actually change?
The answer
In Smit’s reading, mostly attention rather than access. It puts the United States on record supporting deep-sea mining and pulls a fringe industry into mainstream view, which he values highly, but it does not remove what has kept US waters idle, and in international waters it collides with a treaty the United States never ratified. He calls that collision a matter for lawyers and does not predict how it resolves. The real activity stays where it already was, led by the Cook Islands, where his own company holds one of three licenses.
03The argument
Smit’s framing is that the order is neither a piece of paper nor a light switch. Its concrete content is a direction to the US government to act supportively, and a scope that covers not only US waters but exclusive economic zones of other countries and international waters too. What he actually credits it with is visibility. In the three weeks after publication he fielded a run of calls from people who wanted to understand an industry they had previously encountered mostly through campaigns for a moratorium. He treats that shift in the information environment as the main effect, and is explicit that it is not the silver bullet some people read it as.
The reason it cannot be one, in US waters, is a contracting model the order does not touch. The United States treats seabed minerals the way it treats offshore oil and gas: federal agencies do the exploration and geophysical work, interpret it, define areas of interest, and put those out to lease. Applied to the deep seabed that means the National Oceanic and Atmospheric Administration and the Bureau of Ocean Energy Management surveying tens of thousands of square kilometers before anyone can bid, and he says the relevant vessels are already booked two to three years out, possibly four. Redirecting them means sacrificing jobs they are already committed to. His proposed fix is to copy the Cook Islands: grant an exclusive exploration license, attach a first right of refusal on a mining license to whatever is found, and let the companies that specialize in finding minerals fund the finding and recover it through commercialization. Behind the argument sits the sharpest fact in the episode, which is that his own company is not inclined to explore US waters. Not for want of resource, but because the current legal framework does not give investors the assurance they would need before spending tens of millions.
International waters are where he stops short, and the change in his register is worth noticing. Two regimes exist: a country’s exclusive economic zone, governed by that country’s law, and everything beyond it, which since the Law of the Sea treaty has fallen to the United Nations and specifically the International Seabed Authority. The United States never ratified. After the order, the Metals Company signaled it would seek licenses under US law to mine international waters, which he says met surprise and resistance. Smit describes the situation as vague and challenging, says it is for the lawyers to work out how a US-issued license squares with the Authority’s precedent and regulatory standing, and offers no prediction. He also does not treat the Authority as an adversary: he calls its work over the past several decades massive, crediting it with focusing the industry on where impacts actually occur.
On the industrial questions he is far more confident, and here the note is recording a participant’s case rather than a settled one. He argues the two technical objections are overstated. Extraction technology was first proven in the 1970s, so the question is application rather than invention. Refining requires no new chemistry: crush the nodules, dissolve the metals in acid so everything goes into solution, then run an existing separation train, with the only real unknown being what order to pull the metals out in. Every terrestrial mine builds a process plant tuned to its own ore, so building one here is normal rather than exceptional. The economics follow from grade rather than from cheap operations. He allows that operating cost per ton may be higher than running dump trucks, but says a ton of nodules carries the metal that a land miner would need to move four to eight times the tonnage to match, while the project avoids the roads, rail, power lines and dams that dominate greenfield mine capital. And the metal that carries the economics is not the one the headlines are about: manganese, not nickel or cobalt, is the largest component, and he says its market is large and stable enough that the project stayed profitable through the recent depression in nickel and cobalt prices and that new supply would not move the manganese price against itself.
04What you need to know first
- Polymetallic nodules
- Golf-ball-sized rocks sitting on the deep seabed, containing nickel, cobalt, copper and a large fraction of manganese, plus rare earths in the Cook Islands deposit. Unlike terrestrial ore they carry several valuable metals at once.
- Exclusive economic zone
- A country’s own offshore waters, where that country writes and enforces the rules. Everything past it is international water, where the United Nations Law of the Sea treaty applies through the International Seabed Authority. The United States has not ratified that treaty.
- Grade
- Metal recovered per ton of rock moved. The whole cost argument rests on nodules being high-grade and multi-metal, so that a small tonnage carries the metal of a much larger terrestrial tonnage.
- Exploration license versus mining license
- The first buys exclusive rights to look; the second permits extraction. The Cook Islands links them with a right of first refusal, which is the mechanism Smit wants the United States to copy.
05Details worth keeping
- Early activity concentrated in the Clarion-Clipperton Zone in international waters mainly out of fear of missing out: when the treaty regime came into force, major nations staked claims. Claims carry work obligations, so holders could not simply squat, and much of the resulting work was government-funded, including European Union and Chinese technology development. Smit counts that spending as broadly positive for the whole field.
- The Cook Islands awarded three exploration licenses in 2022, each five years, and the holders are now in year four. They are Moana Minerals (the transcript renders it “Mohana”), owned and operated by the US-based Ocean Minerals; a second holder Smit names only by the initials CIC; and a joint venture between a Belgian company and the government-owned Cook Islands Investment Corporation.
- Japan is his clear second: a significant nodule field announced in its territorial waters last year, now being developed under University of Tokyo guidance. He says the Cook Islands are ahead because they already have a regulatory path running from prospecting through exploration to exploitation.
- The environmental work, as he describes it, is baseline data collection rather than technology development. Three to four years of it, because the deep ocean has no equivalent of the environmental record a homebuilder can draw on, feeding an impact statement and then an “adaptive management” process that continues after operations begin.
- A refining alternative to building a plant: produce a nickel-cobalt or nickel-copper-cobalt hydroxide and send it to existing facilities that already separate those pairs.
- He treats “the processing technology doesn’t exist” as a recent addition to the arguments against the industry, and says the separation technology is precisely what already exists.
- The polymetallic mix doubles as a hedge. Kann makes the point and Smit confirms it with his own sensitivity analysis: exposure to four or five metals means one crashing does not sink the project.
06Claims worth citing
All figures as stated on 2025-05-22, a few weeks after the executive order. The project economics come from the chief executive of a company holding one of the licenses and are forward projections rather than operating results. Commodity prices referenced were at cyclical lows at the time.
- The Law of the Sea treaty was ratified in 1984 and about 136 countries have signed up; the United States has not. Dates and counts are as he gave them. Smit
- Cook Islands: three exploration licenses awarded in 2022, five-year terms, holders now in year four, mining license applications intended within about two years, first production two to four years away. Smit
- Deep-sea nodule collection technology was first proven in the 1970s. Smit
- The federal survey vessels needed to open US waters are booked two to three years out, possibly four. Smit
- A ton of nodules yields the metal of somewhere between three and five land-based mines, and a terrestrial operation would move four to eight times the raw tonnage for the same metal. The two ratios are stated loosely and in the same breath, so treat the “three to five mines” phrasing as informal. Smit
- Project economics for his Cook Islands project: mining system capital around $500 million, processing plant around $2 billion, total project $3-4 billion, yielding roughly $500 million of free cash flow a year at internal rates of return in the thirties to 40%. Ocean Minerals projections, stated by Smit
- Manganese is by far the biggest component of what they are producing, in his phrasing, and the reason the project pencils; he does not say whether he means by mass or by revenue. It kept the project profitable through the recent crash in cobalt and nickel prices, and the manganese market is large enough to absorb the new supply without self-cannibalizing. Smit
- Kann’s framing figure for the resource overall: literally trillions of dollars of nodules on the seabed. Kann
07Where it’s contested
- The guest is a participant, and the episode has no counterweight. He runs a company holding one of three Cook Islands licenses, and every number about extraction cost, project return and environmental impact is his company’s. That is worth stating plainly rather than alarmingly: it is a reason to attribute those figures rather than to discount the analysis, which is detailed and specific.
- The environmental question is answered, not examined. Kann’s own opening names contested environmental impact as one of four things blocking the industry, and the only treatment it gets is Smit’s, which recasts it as a data-collection exercise on proven technology. He characterizes opponents as an “anti contingent” spreading misinformation and asks people to park their emotions and judge on merit. Those are positions rather than findings, and nothing in the episode tests them.
- Three of the host’s four stated blockers are dissolved by the guest without pushback. Kann’s opening names four: a missing regulatory regime, the environmental fight, capital and extraction technology, and refining. Smit affirms only the regulatory one and describes the other three as non-problems. Kann does not challenge any of the three, so the divergence between the episode’s framing and the guest’s answers is never resolved on air.
- Where Smit is genuinely uncertain, he says so. The international-waters question is the clearest case: vague, challenging, still to be worked through, and explicitly handed to the lawyers. He does not forecast whether a US-licensed operation there would survive contact with the International Seabed Authority.
- He declines the host’s framing of a race. Kann puts it to him that the order amounts to the United States competing with the rest of the world for international-waters resources. Smit does not adopt that framing; he splits the question, calls the exclusive-economic-zone half clear and leaves the other half open.
- He also declines the easy adversarial line on the Seabed Authority, calling its environmental work massive and foundational even while advocating that the United States change its own approach.
- One asserted cause worth tagging as assertion. He says the near-absence of activity in US waters is due to the regulatory issue “rather than anything else,” which rules out resource quality and economics by statement rather than by evidence presented here.