Fixed on ESG, Ep. 15 - Deep-Sea Treasure Trove: Opportunity or Risk?

IS DEEP-SEA MINING A VIABLE SOLVE FOR METALS SCARCITY AND KEY TO THE GREEN TRANSITION?

Although deep-sea mining has never occurred at commercial scale, the growing interest in the minerals and metals found on the seabed could prompt a shift in the status quo. As the world looks to address climate change, increased demand for required base metals and critical minerals that support large scale deployments of green technologies is a real concern. Against this backdrop, some point to deep-sea mining as a potential solve, but it’s not that simple.

The topic is also garnering further attention—and increased scrutiny—since the International Seabed Authority missed its July 9 deadline to adopt seabed mining regulation. As it stands, the organization is now required to review, and therefore could provisionally approve, applications for deep-sea exploitation without any governing framework in place.

PGIM Fixed Income’s Co-Head of ESG Research, Armelle de Vienne, and ESG Research Specialist, James Malone, CFA, discuss the many dimensions of this complex subject: its potential and criticality as it relates to the green transition, the pros and cons of deep-sea mining, and the countries and industries lobbying for and against deep-sea mining. Further, the duo explores the investment implications, including the near- and long-term implications of this highly capital-intensive business, if there’s economic foundation to make the endeavor profitable, and the impact to corporate and sovereign issuers. Find all of this and more in this episode of Fixed on ESG, hosted by Client Manager, Ruth Klavert.

Recorded on July 25, 2023.

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