DEME, deep-sea mining and Belgian banks
This article is by FairFin for BankWijzer - the Belgian Fair Finance coalition
A new sector is on the verge of a breakthrough on the ocean floor: deep-sea mining. More and more companies are setting their sights on the precious minerals at the bottom of the Pacific Ocean. They frame deep-sea mining as 'sustainable', 'innovative' and 'necessary for the climate transition'. But is this true?
While we cannot yet fully assess the impact of deep-sea mining, it is already clear that it has major impacts on the environment, the climate, the people of the Pacific islands and the Global South. This is why FairFin is taking a close look at the financial flows to DEME. This Belgian company, through its subsidiary Global Sea Mineral Resources (DEME-GSR), is currently taking its first steps into deep-sea mining.
Deep-sea mining is a form of mining that involves extracting raw materials from the seabed. Because there too, collected in nodules and crusts, we find precious minerals such as cobalt, lithium and manganese. These minerals play a major role in today's approach to the climate transition: they are needed in the production of wind turbines and electric cars, among other things. Thus, a veritable gold rush to the deep-sea emerged over the last decade.
DEME explores the deep-sea floor
This demand for precious minerals and the prospect of large profits motivated Belgian company DEME, through its subsidiary GSR, to explore the deep-sea floor.
The company obtained a 15-year contract for a stretch of seabed in international waters: they are allowed to explore and test the possibilities of deep-sea mining in that area. They got this contract through Belgium as a 'sponsor state'. In order to get such a contract to explore the ocean floor in international waters, companies have to apply to the International Seabed Authority (ISA), and they can only do this with the formal support of a state.
Disturbing ocean life
DEME resolutely chooses to present deep-sea mining in the most successful, sustainable and green way possible. But this burgeoning sector is not without risks. Although oceans occupy two-thirds of our earth's surface, we still know very little about the deep-sea and the various creatures that live there. It is therefore, impossible for us to correctly assess the full impact of deep-sea mining, yet we already know the consequences will be grave for people and the planet.
Deep-sea mining loosens a layer of about 15 to 40 cm from the seabed, creating dust clouds in the water. This disrupts marine life and forces fish such as tuna, swordfish and marlin to migrate, or starve. This has major consequences for local fishermen, who rely heavily on these fisheries as food and income.
Residents of Pacific islands have raised the alarm on several occasions, yet they are hardly listened to, if at all: their governments continue to apply for deep-sea mining contracts under pressure from Global North mining companies.
More CO2 in the air
In addition, that top layer of the seabed also plays a major role in CO2 absorption: when this layer is disturbed, the ocean cannot play its role as a 'blue lung' and less CO2 is absorbed from the air. Deep-sea mining may thus worsen global warming.
The deep-sea also recovers extremely slowly. Even after decades, the damage of 'exploratory' deep-sea mining is still visible. Thus the impact of more intensive and industrial deep-sea mining will be many times higher.
Who finances DEME?
Financial institutions play a crucial role here. They choose to finance deep-sea mining companies like DEME without conditions. For instance, Ackermans & van Haaren stands out as DEME's largest shareholder: this holding company owns 62% of DEME's shares, which was worth some 1.6 billion euros at the time of our research. BNP Paribas and the National Bank of Belgium (NBB) are also shareholders. They held shares worth some 6.9 million euros (BNP) and 4.2 million euros (NBB) at the time of our investigation.
In addition, KBC, ING, Belfius and BNP Paribas gave loans to DEME, but there is little transparency about this from the banks or the company itself. Even through specialised databases, FairFin could not find more information on how many loans DEME took on and how many bonds they put on the market.
A strict policy on deep-sea mining
Banks should not simply finance deep-sea mining (companies) without any conditions. FairFin advocates the application of a precautionary principle when financing deep-sea mining. It is better to prevent than to repair, and so we should not invest in an activity of which we do not yet know how harmful it will be for people, the environment, and the climate.
Financial institutions should clearly formulate their policies towards deep-sea mining. Currently, no bank in Belgium that finances DEME has a policy on deep-sea mining. When financial institutions invest in companies that mine metals and minerals, they must ensure that they are extracted fairly without irreversible harmful impact on people and the planet. Deep-sea mining cannot guarantee that.
We are currently at a tipping point. Due to a legal loophole in the United Nations Convention on the Law of the Sea (UNCLOS) - the legal framework for all oceans and maritime activities - commercial deep-sea mining can quickly become a reality, without an adapted legislative framework. Similarly, DEME-GSR hopes to start deep-sea commercial activities in 2029.
We must, therefore, increase the pressure now to stop deep-sea mining. Several countries, NGOs, scientists and the European Parliament have already called for a moratorium, a temporary halt to deep-sea mining, until we can better assess the effects of deep-sea mining and know more about oceans in general. Financial institutions should also support this moratorium in their policies: they can enshrine a temporary ban on financing deep-sea mining in their lending principles.
Want to take action? Put pressure on the financial sector and your bank by sending a complaint letter to your bank.