U.S. Mulls Offshore Mineral Lease Sale

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)

Summary

The U.S. government started the preliminary process for a mineral lease sale off the coast of Virginia. Few countries have achieved commercial success with offshore mining.

Reshoring Minerals from Offshore

Keen on protectionist policies meant to insulate the U.S. economy from foreign suppliers, the federal government started the early-stage processes for a proposed lease sale for critical minerals off the coast of Virginia.

"America's economic vitality and national security depend on reliable access to critical minerals," Matt Giacona, the acting director of the Bureau of Ocean Energy Management (BOEM), said Friday. "By advancing responsible offshore leasing, we're reducing reliance on foreign supply chains and ensuring that the technologies of tomorrow are driven by American innovation." 

From aluminum to zirconium, the U.S. Department of the Interior put out its list of critical minerals in November. Many of those are scarce domestically, leaving the U.S. economy vulnerable to foreign suppliers.

"Our national and economic security are now acutely threatened by our reliance upon hostile foreign powers' mineral production," according to an executive order issued in March. "It is imperative for our national security that the United States take immediate action to facilitate domestic mineral production to the maximum possible extent."

The U.S. Department of Energy has already offered $500 million to support recycling of minerals from batteries through demonstration or commercial facilities. These include minerals such as lithium, graphite, nickel, copper, aluminum and a host of others.

Among the more sought-after minerals is lithium, but low market prices could be a deterrent to future investors. An October study from the Federal Reserve Bank of Dallas found that, of the 66 lithium projects it was tracking, more than half were still in the exploration phase, meaning production would still be another 10 years out. "Success is uncertain," the Dallas Fed said.

Industrial Info Resources is tracking 93 lithium mining and refining projects in the U.S. totaling $55.78 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can learn more about the U.S. lithium sector--including capacities, investment values and necessary equipment--here in a list of detailed project reports.

Research from the Center for Strategic and International Studies (CSIS), meanwhile, found these resources are available in significant quantities on the U.S. offshore continental shelf in the form of so-called polymetallic nodules, deposits that can contain high amounts of nickel, copper and other metals.

The CSIS, however, added that no country has been able to extract the marine resources at a commercial scale. And due to the concerns about the impact on the environment, 32 countries, from Canada to the United Kingdom, have a moratorium on seabed mining.

Elsewhere, seabed resources in international waters are governed by the U.N.-backed International Seabed Authority, of which the United States is not a party. The United States has nonetheless taken steps to unlock seabed resources in most of its territorial waters since Donald Trump returned to the White House in January.

Last month, the Trump administration received an unsolicited request for a lease sale off the Virginia coast from Odyssey Marine Exploration (Tampa, Florida), which triggered the federal review process. The company is already working to produce 350 million tons of phosphate materials at a seabed mining operation off the coast of Mexico.

Subscribers can go here for a company profile and access the detailed project report here.

To proceed with the Virginia lease, BOEM will invite feedback from state and tribal authorities, industry representatives and the public before it makes a formal decision.

By the Numbers

• 66 lithium projects reviewed by Dallas Fed
• 32 countries have a moratorium on seabed mining
• $500 million to support recycling of minerals from batteries

Key Takeaways

• Offshore Virginia considered for subsea mining.
• Few success stories so far.
• The U.S. economy depends on foreign supplies for many minerals.

About Industrial Info

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).