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22 November 2018, Gateway House

Oceanic Industry 4.0

The emergence of the Fourth Industrial Revolution depends on the availability of rare- earth minerals, which occur extensively on the ocean floor of the Indo-Pacific. The technology to exploit this is available only to some countries currently: the global agreement on this must be fair and safeguard India’s future interests, says the author of this blog

Fellow, Space and Ocean Studies Programme

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The world has entered the era of the Fourth Industrial Revolution whose success depends on access to rare-earth minerals, the basis of our digitalising world. This is consonant with the geopolitical shift from the Atlantic to the Indo-Pacific, a region that is not only a larger planetary domain, but also calmer and more resource-rich compared to the North Atlantic.

There are vast mineral reserves on the ocean floor of this region. It came into prominence in 2010 when China banned the sale of its rare-earth minerals to Japan over geopolitical differences. This prompted Japan, United States and other countries dependent on China’s rare-earth minerals to seek other terrestrial resources as also explore newer and more abundant reserves, particularly on the ocean floor.

This is happening in spite of the technologically-advanced western and Asian countries already actively innovating processes for mining rare-earth elements from discarded electronics. Many have immense reserves of accessible and as yet unexploited land-based rare-earth minerals, which will soon be extracted hopefully through environment-friendly technologies.

However, significant advances to ensure the supply and diversity of future sources are under way. Earlier this year, a Japanese exploration consortium discovered semi-infinite reserves of rare-earth minerals within its own exclusive economic zone. At current levels of consumption, these new reserves can supply humankind with rare- earth minerals for the next 700 years. While not an urgent requirement currently, the importance of sub-marine resources will only deepen in this digital era, especially as their extraction becomes technologically feasible, and in time, commercially viable.

Therefore, it is imperative to prepare the framework for the exploitation of these global resources so that they are not colonised by a few who seek techno-economic dominance.

An early effort in this direction was the issue of international licenses by the UN-mandated International Seabed Authority (ISA). The ISA has set a precedent by issuing 29 international licenses for mineral prospection in the mid- and South Atlantic, the Clarion Clipperton Fracture Zone in the Eastern Pacific, the Western Pacific near the Federated States of Micronesia and the Central Indian Ocean basin. Most of these prospection licenses will expire 15 years from now, by 2033. Thereafter, the most technologically-capable nations may be expected to push for the actual extraction of these resources. In these 15 years, the Draft Regulations on Exploitation of Mineral Resources will need to be finalised and formalised.

The current ISA Draft Regulations set out the norms on environmental, life and property safety as also determine the royalty for extraction – the decisive factor for setting the market prices of these minerals.

These developments suggest that governments and companies interested in accurate geo-economic and techno-economic analyses of the extraction of these resources must find a balance between the differing perspectives of stakeholders, including environmental groups, mining corporations and governments.

A developing country like India has some technological capabilities in this, but it has not yet been able to exploit the one license it has been issued by the ISA in the Central Indian Ocean Basin. But that does not mean that the interests of the largest democracy and its people should be left out of consideration in future. Therefore, the formalisation of the ISA draft must take care of the collective interest.

The terms of this document cannot be like the UN Security Council which entrenches present technological prowess. It must be fair to countries that come later to the table – or in this case, the ocean floor.

This is critical because a fair, finalised ISA document is likely to serve as a template for the exploitation of resources on the Moon, and in outer space.

Chaitanya Giri is Fellow, Space and Ocean Studies, Gateway House.

This blog was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.

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