Local authorities in western Serbia on Thursday suspended a plan that would allow mining giant Rio Tinto to operate a lithium mine, following protests by environmentalists that shook the country’s populist leadership.
The mining had been expected to start in the near future, but a town council in Loznica voted to suspend a regional development plan that permitted the excavation of lithium. The vote followed the suspension last week of two key laws in Serbia’s parliament that ecologists said would help the multinational mining company start the project.
For three consecutive weekends, thousands of protesters in Belgrade and elsewhere in Serbia blocked main roads and bridges to oppose Rio Tinto’s plan to launch a $2.4 billion mining operation in Serbia. The protests were the biggest challenge yet to the increasingly autocratic rule of Serbian President Aleksandar Vucic.
“Whether there will be a mine depends on people (in western Serbia) and the study on environmental impact assessment,” Prime Minister Ana Brnabic said. “These are the two conditions that the president (Vucic) stated earlier.”
Rio Tinto said in a statement Thursday that it worked in accordance with laws and the highest professional standards throughout its 10-year presence in Serbia in order to launch “the largest mining investment in this part of the world.”
“We understand the interest of citizens in everything that happens in connection with the project, and we will continue to provide information on all aspects of the project for which we are responsible and in which we participate,” the statement said, according to independent Beta news agency.
Although Rio Tinto said it would adhere to all the latest environmental protection standards, organizers of the weekend protests said the lithium excavation could inflict lasting ecological damage to rivers and farmland in the region.
Now that the lithium mine plans are on hold, Vucic said earlier this week that from now on “we will have to speak in a different way to Rio Tinto and others.”
A few hundred meters from the huge furnaces of the Chinese-owned Smedrevo steel mill in central Serbia, the village of Radinac is covered in thick red dust. Cancer rates have quadrupled in under a decade, and residents want the plant to clean up or shut down.
Throughout its almost 150-year history, the company has faced accusations of corruption, environmental degradation and human rights abuses at its excavation sites.
Lithium, which is used in batteries for electric cars, is considered one of the most sought-after metals of the future as the world shifts to more renewable energy sources.
As Serbia faces an electricity shortage, Vucic has ignored European Union pleas for countries to reduce CO2 emissions and pledged to continue and even expand coal mining for power plants.
Environmentalists are upset at the Serbian government’s lack of response to rising pollution in the country.
Gana Gold generated R$ 1.1 billion (US$ 200 million) in revenue using illegally-obtained environmental licenses in Brazil, equivalent to 3 tons of gold extracted.
By the company’s own reckoning, its operations should be producing annual revenues of around R$ 30 million ($6 million) if operating within licensing limits.
Located inside a conservation area, the company has extracted 32 times more gold than the projected estimate it made to the regulating agency.
An embargo has been placed on Gana Gold along with R$ 10 million (US$ 2 million) in fines following reports of illegal activity.
A gold mine hidden in the middle of the Brazilian Amazon generated nearly $200 million in revenue in just over a year for Gana Gold Mineração, according to Brazil’s National Mining Agency (ANM). In addition to the unusually high earnings, Gana Gold is also suspect for extracting 32 times more gold than their projected estimates.
Now under investigation by the Federal Police, Gana Gold is only able to operate because the municipality of Itaituba where it is located overruled state and federal legislation to license it — and because the ANM turned a blind eye to its operations. The case is an example of the discord between the institutions that should be protecting the Amazon, the permissiveness of governments focused on facilitating mining in the region, and the success of lobbies in Brasilia on the part of federal senators and congressmen in the Bolsonaro administration.
A six-month investigation of Gana Gold as it hit its first billion led to the company’s mine in the Amazon.
A leader in gold extraction in Brazil’s northern region, Gana Gold is responsible for 18% of all gold mined in the state of Pará, according to the company’s website. Its high level of productivity stands out simply because the operation was slated to extract only 96.53 kilograms of gold, according to information provided by Gana Gold to the sector’s regulating agency. By the company’s own reckoning, its operations should be producing annual revenues of around R$ 30 million ($6 million) if operating within licensing limits.
But the company has declared income of over R$ 1 billion ($200 million) since 2020. In the first eight months of 2021, it surpassed the estimates provided to the regulating agency for the year by 32 times.
The level of productivity is uncommon: if accurate, it would rank the Gana Gold mine above the planet’s most profitable operations. The average grade (the geological measure of the number of grams of ore per ton of raw material extracted from the earth) would be much higher than those found at neighboring mines. Gana Gold declined a request to be interviewed.
The lucrative mine are inside a federally protected area neighboring the Munduruku Indigenous Land in Itaituba, a municipality in the southwest part of Pará State. The region is experiencing an actual gold rush that’s only intensified since the start of the Jair Bolsonaro administration in 2019. Bolsonaro is known to support clandestine prospectors and his administration has been fighting to legalize mining on Indigenous land.
It is a market that mobilizes billions of Brazilian reais every year, largely from undercover operations. More than one-fourth of the 174 tons of gold produced in Brazil in 2019 and 2020 was illegally mined, resulting in losses of R$ 9,8 billion ($ 2 billion) for the country according to a study carried out by researchers at Minas Gerais Federal University (UFMG) and by the Federal Prosecutor’s Office (MPF). The study was the basis for four MPF civil action suits in the state of Pará presented in July and August of this year, asking for suspension of prospectors in the region and of financial institutions accused of buying illegal gold until there is more control over sale of the ore. The suit does not apply to industrial gold mining, which is what Gana Gold does.
The study also shows that most of this production goes to countries like Canada, the U.K., and Switzerland. In the first half of 2021, the production of gold considered to be potentially illicit remained high, reaching 26% of the 46.8 tons of gold produced over the period, according to researcher Bruno Manzolli from UFMG.
Itaituba, where Gana Gold is headquartered, stands out in this scenario.
The UFMG researchers show that, together with the municipalities of Jacareacanga and Novo Progresso, Itaituba generated 85.7% of illegal gold sales with designation of origin in untouched areas with native forest between 2019 and 2020. In other words, ore was extracted illegally in other locations.
In the second half of 2020, the company extended the airstrip, which is now 850 meters long. Itaituba is among the municipalities with the worst deforestation rates in the Brazilian Amazon according to a study by IMAZON (the Institute of Amazonian Man and Environment) published in June of this year.
Because of the type of mining carried out there, involving heavy machinery equipped to remove 50,000 tons of earth annually to find gold, and classified as a high environmental risk under federal legislation, the license should be granted by the government of Pará State. Typically during the licensing process, the state secretariat requires a company to carry out an environmental impact study and later present this document to the ICMBio (Chico Mendes Institute of Conservation and Biodiversity), which is the federal regulator for preserved areas. Environmental protection laws on the books also require that the license should only be given if the institute concedes authorization for environmental licensing, or ALA, after analyzing the possible environmental impacts of the proposed activity.
In the case of Gana Gold, none of the above was carried out.
Gana Gold’s success story began in June, 2016 when a company called J.J.G.E. filed a gold ore research request for an area comprising 4,183 hectares near Água Branca, a prospecting community in Itaituba settled at the end of the 1970s. The site had been studied by another mining company, Brazauro Recursos Minerais, between 2006 and 2013. It concluded a report on the financials of exploration and the site was abandoned definitively in 2015.
Brazauro’s 2015 report also affirms that the company reported the presence of illegal prospectors at the location in 2012. Satellite images show that by 2016 there was illegal prospecting going on at the mine under the umbrella of J.J.G.E. It is impossible, however, to determine exactly who was responsible for the activity.
Then at the start of 2017, J.J.G.E. was given a license from the government mining regulators at the ANM to carry out a new study. That study found that the mine would be economically viable for exploration. After the study, the next step would have been to seek permission to remove the ore — what the ANM classifies as a “mining concession requirement.” However, the company chose to take an easier route to be able to start operations and requested a Guide for Use (GU) for experimental mining — a type of simplified authorization for extraction that can be granted during the research phase.
Although it involves less bureaucracy, a GU requires the applying party to present an environmental license. This means that in order to remove ore, the company must seek out the appropriate environmental agencies and present and environmental impact analysis together with a compensation proposal.
This is not what J.J.G.E. did.
In April 2018, the company instead handed the mine over to M.M. Gold Mineração, owned by Marcio Macedo Sobrinho, the current author of the mining requirement.
The licensing process should have been carried out by the Pará State Government, under jurisdiction of the State Secretariat of the Environment and Sustainability, or SEMAS. According to the full text of the mining process filed at the agency, the company even requested a license from the state secretariat in December 2018, but then changed its strategy. According to the company, though, it was only after “gaining knowledge” that the request could be made with the municipal environmental agency — even though, in reality, the municipal secretary has no authorization to grant it.
Based on this interpretation, the company used loopholes in established procedures and gained a license from City Hall in Itaituba to operate in just nine days. A document sent to the ANM on September 16, 2019 demonstrates the unusually rapid approval process. Typically, according to two environmental analysts interviewed for this report, this procedure takes anywhere from 30-60 days in order to carry out an analysis of relevant environmental impact documents.
The remarkably short time frame becomes even more confounding when one Guilherme Aggens enters the story. A forestry engineer and partner in Geoconsult, a consulting firm for the mining industry that had carried out some technical studies for Gana Gold, Aggens has a history of travel with politicians to Brasilia to lobby for the sector. The company granted him power of attorney on September 24 — eight days after it applied for the operating license with the city — granting him power over all administrative procedures regarding the mine with the Environmental Departments of the state of Pará, of Itaituba and also with the ANM. On the following day, the city’s Secretary of the Environment and Mining, Bruno Rolim da Silva, granted Gana Gold the license.
The dates could be a mere coincidence if, a week before, Aggens hadn’t posted photos of himself on a trip with Rolim on social media to lobby for the mining sector in Brasilia. The posts show meetings with politicians that support prospecting in the Amazon, especially on Indigenous lands, like senator Joaquim Passarinho of the PSD party of Pará and Itaituba city councilman Wescley Tomaz of the MDB party. During the trip, they also managed time in the agenda of then-Chief of Staff, senator Onyx Lorenzoni, close ally of President Jair Bolsonaro, who today is Minister of Labor and Social Security.
Aggens and Rolim’s relationship doesn’t appear to have begun with the Gana Gold mine. Both also appear standing together with the newly-elected Jair Bolsonaro in a photo published in November 2018 by attorney Fernando Brandão, a resident of Itaituba. A year later, Brandão would participate, together with prospectors, in a secret meeting with Ministers Ricardo Salles and Onyx Lorenzoni to place pressure on the government to punish IBAMA officials who had burned machinery used in environmental crimes.
City Hall of Itaituba was contacted about the mistakes in the license granted Gana Gold on July 14 asking which environmental legislation allows a municipality to grant a license for the mining company’s activity. No response was received. Secretary Bruno Rolim da Silva was contacted directly via WhatsApp on his personal number as to whether his relationship with engineer Guilherme Aggens influenced the fact that the concession was emitted in only nine days. No response was received, but there was a reaction from the company.
Also on July 14 about five hours after the inquiries were sent, Gana Gold filed a partial cession request with the ANM to transfer 4,001 hectares of M.M. Gold’s solicitation, which was originally for 4,183 hectares. However, the gold mine is situated precisely on the 182 hectares that were left to M.M. This is also where the processing plant and the landing strip are located. Aggens never answered the questions I sent to him asking for an explanation on why this change was requested, coincidentally, on the same day that I had questioned the company.
The mine’s authorization is also missing another important stamp of approval: that of ICMBio. As the operation lies within a federal conservation unit — the Tapajós Environmentally Protected Area bordering the Munduruku Indigenous Territory — the license should only be granted after ICMBio authorizes it. Incidentally, this requirement for ICMBio approval could cease to exist if the bill altering environmental licensing, which was approved in Brazil’s congress in May, is passed by the Senate and made into law.
Three inquiry emails were sent between July and August to ICMBio’s press office, but the only response came from the agency for the Information Access Law (LAI) on September 1.
“At no point in time was any communication sent to ICMBio from environmental agencies, state or municipal, about environmental licensing for the mining process 850.397/2016 [the registry for the mine where Gana Gold extracts], which is for mineral research with a Guide for Use, in which case an environmental license and ICMBio authorization are obligatory,” states the agency response.
The bureaucratic soap opera ended in March, 2020 when the ANM shrugged off Brazilian environmental legislation and accepted the illegal document presented by Gana Gold, conceding permission for the company to mine 36.6 hectares — the area where extraction takes place withing the 4,183 hectares included in the original petition.
Carolina Santana, an attorney for the Human Rights Observatory for Isolated and Recently Contacted Indigenous Peoples, argues that processes already in place can’t simply be set aside.
“You are not allowed to choose the licensing agency for your undertaking,” Santana said in an interview. “Environmental legislation determines this. Independent of who made mistakes in this case, there are a number of illegal elements in this licensing process that must be investigated, mostly because of the presence of Indigenous communities in the APA Tapajós region.”
The Pará Agreement
As of September 2021, the Pará state government had not directly analyzed Gana Gold’s mining project because the company did not request its license from the state agency. In February, Pará Governor Helder Barbalho signed an agreement with six companies, including Gana Gold, to promote the gold industry in the state. The objective is to refine the ore in the state.
The grave errors in Gana Gold’s licensing process haven’t yet gotten a response from Barbalho’s administration. An email sent to his cabinet and to SEMAS requesting information about the agreement made with the company and asking if the government plans to maintain the agreement. A press officer from SEMAS did respond that they had granted no licenses to Gana Gold. Queries sent to gubernatorial advisors via WhatsApp received no response.
Gana Gold’s mine lies in the Tapajós Gold Province in the southwest of Pará, where conflicts over the precious metal are a threat the Munduruku Indigenous people and conservation units in the area.
Professor Luiz Jardim Wanderley from the Geography Department at Fluminense Federal University (UFF) explains, “There are three factors at work bringing more prospecting to the Tapajós region: first, a surplus of manpower because of the unemployment rate and Brazil’s economic situation, which was worsened by the pandemic; second, the rising price of gold; and third, of course, the actions the Bolsonaro administration has taken to weaken environmental controls, which encourages those investing in illegal mining.” Wanderley coordinated the report O Cerco do Ouro [The Gold Siege] together with researcher Luísa Molina for the National Committee for the Defense of Territories Against Mining. Published in April 2021, the document analyzes increased illegal mining on Munduruku lands.
In the Brazilian market, the price of gold is US dollar denominated. During times of economic crisis, it becomes a safe port for investors, which drives up the price. This was one of the factors that caused the price of gold to double between 2019 and 2020, reaching R$ 379 ($75) per gram between August and November last year. As vaccination moved forward in 2021, the price fell and is now around R$ 300 ($60)—a value 50% higher than before the pandemic.
With its license in hand in March 2020, Gana Gold began extracting gold and generated R$ 235 million ($47 million) during its first year of operations. Its performance ranked sixth among the state’s largest mining companies according to ANM data.
But it hasn’t all been easy for the company. In June, it was robbed by armed men who took 20 kilos of gold. No one has been arrested yet for the theft.
In 2021 alone, Gana Gold expanded its operation and reached R$ 883 million ($176 million) by August. However, according to the production estimate report that the company delivered to the ANM in October 2019, extraction at the site should generate up to 96.53 kg per year, which would result in estimated total annual revenue of around R$ 30 million ($6 million).
In order to generate R$ 883 million in revenues in 2021, Gana Gold would have to remove 3.14 tons of gold from its mine in the Amazon — 32 times its production estimate. This calculation relies on the same research methodologies as UFMG on illegal gold production cited by the federal prosecutor’s Office, which takes into consideration the information on weight and average gold prices in the tax month informed by the company on the ANM open data website.
In the opinion of researcher Luiz Jardim Wanderley, this discrepancy in values indicates that Gana Gold is extracting much more gold that it informed the ANM about.
“When it got its operating license quickly without having to go through the process of requesting a mining concession, the company produced no detailed analysis of incurrent environmental damage, nor did it promote the necessary public debate on those impacts, which is mandatory,” Wanderley said in an interview. “At any rate, the Guide for Use requires the company to present the appropriate environmental licenses. As the GU is supposedly used for smaller volumes, the environmental agencies ask for simplified procedures. However, Gana Gold has been operating at levels equal to an industrial mine.”
The large volume of ore extracted by Gana Gold in Itaituba also raises doubts as to the type of permission that was granted by the ANM, which was for experimental mining, comments Edson Farias Mello, Geology professor at Rio de Janeiro Federal University.
“It is uncommon for a gold mine to be developed under a Guide for Use, unless you’re talking about the initial phases for determining the character of the ore,” Mello said. “The concept of experimental mining covered by the GU is compatible with small volumes, which does not appear to the be the case [of Gana Gold. While the concession can take years to be granted, a GU is released in just a few months.”
But again on September 9, Gana Gold ran into trouble.
Around 30 Federal Police agents arrived at Gana Gold and served warrants to the company. They collected gold samples to verify whether the ore has the same geological characteristics as 39 kilograms of illegal gold seized at Jundiaí airport in the state of São Paulo in August.
During the operation, which was dubbed “Gold Rush,” Federal Police also arrested a man for carrying a gun with a serial number that had been scratched off. In a statement, without mentioning the name of Gana Gold, the Federal Police stated that the GU “was used to lend a legal appearance to illicit transactions involving a large volume of gold of spurious origin.”
According to the Federal Police the details of the ongoing investigation can’t be disclosed. They also state that those responsible could be held liable for crimes of usurpation of national assets, misrepresentation, illegal occupation of public lands, criminal organization and several other crimes against the flora.
The exorbitant numbers placed the Tapajós region’s new mining company at the top of the ranking of the state’s gold miners — up from sixth place — leaving behind companies with decades in the sector. Not bad for a company that holds no environmental license from the appropriate agency.
The volume reported by Gana Gold does not appear to be new information to the ANM — data on the operation is available on the agency’s website. The agency also, in a communication regarding the company’s mining process, admitted at the beginning of the year that it is “favorable to” the company’s goal to expand the mine, and highlighted that “the project is important within the mineral sector’s portfolio.”
I contacted ANM staff for further explanation. The agency’s ombudsman, Paulo Santana, responded that there is “nothing abnormal or illegal” in the case of Gana Gold. The response also said that the “mine’s grade” could be as high as “20 grams/ton.”
This information is not coherent with the geological study presented by Gana Gold, which indicated an average grade ten times lower, of just 1.97 g/t. “We are obligated to stimulate and foment the mineral sector,” wrote Santana in response to questions regarding the ANM’s position on Gana Gold’s expansion.
The ombudsman’s evaluation also ignores the company’s practical performance reported to the ANM last year. According to the data declared by the company, the mine in Itaituba has recorded an average grade of 62.70 g/t — based on the supposition that the company is operating legally.
Last year, Kitco, a site specialized in mining, highlighted a mine in Australia with the highest average grade of gold per ton in the world, of 42.4 g/t. In other words, lower than Gana Gold.
Itaituba’s economy is driven by the gold business — both legal and illegal. The town’s mayor, Valmir Climaco, is an ex-prospector and prospecting enthusiast in the pandemic who has been the object of several complaints and was condemned in 2019 for illegal deforestation of 746 hectares of native forest in a preserved area. That same year, the Federal Police found weapons and nearly 600 kg of cocaine on one of his farms in Itaituba. In a statement, he affirmed that the property had squatters living on it and that he had no relationship with the criminals imprisoned during the operation.
This is the history that led City Hall in Nugget City — as Itaituba is called — to grant Gana Gold its operating license. The document has serious informational errors, including citations of environmental laws that contradict the license itself.
The document’s first error has to do with the type of activity. In its title, the city states that Gana Gold has applied for Mineral Research with Experimental Mining, but on the next page, it refers to the PLG, or Permit for Prospect Mining, which is a more rudimentary activity, different from the license granted and with a simplified license. It also cites a particular distinction which deals with prospecting.
In the patchwork of hills, lakes and sea that makes up England’s northwest corner, most people see beauty. Dave Cradduck sees broken dreams.
The coal mine where Cradduck once worked has long closed. The chemical factory that employed thousands is gone. The nuclear power plant is being decommissioned.
“Judging from the equipment used by the company and its processing — which includes crushing rocky material — it is clear that the company is working with primary ore,” stated geologist Edson Farias Mello in an interview. “Therefore, the activity cannot be classified as prospecting. This legislation defines that the Prospecting Permit, or PLG, can only be granted in places where gold occurs in secondary deposits.”
The error could have been just a mistake made by the municipal agency if it weren’t for one small detail: according to the state environmental legislation, City Hall does not have the autonomy to grant licenses for experimental mining, only for mining prospectors.
The operating license granted by City Hall to Gana Gold cites resolution No 116 of the State Environmental Council (COEMA), which specifies that municipalities can only grant the prospecting permit (PLG) or the “mineral research without experimental mining”. At the time when the license was granted, the valid COEMA resolution was No. 120, which presented the same mining rules as the resolution published the previous year. Article 1 of the resolution, which has validity as legislation, specifies another error committed: not consulting the federal environmental agency responsible for the management of Brazilian Conservation Units.
The resolution also states clearly federal and state agencies must be consulted for the licensing of activities or undertakings which will have local environmental impact inside State or Federal Conservation Units.” In February, the state council published new regulation on the types of licensing that city governments can grant, which maintains the same requirements.
When questioning the ANM about the irregular licensing of Gana Gold, I mentioned the environmental legislation that prohibits the municipality of Itaituba from granting licenses for experimental gold mining. Even so, without presenting any document or regulation to support his answer, ombudsman Paulo Santana wrote that “this technical body is aware that the municipality of Itaituba, PA has authorization for municipal environmental management, which was granted by the State Environmental Department (SEMES).” Santana also reinforced that “It is not up to the technical staff of the ANM to validate these documents.”
SEMAS, in turn, says such authorization does not exist. I questioned the state secretary on August 8 after receiving the email from the ANM’s ombudsman, and the response they sent me was that, beyond the federal legislation and the COEMA norms, “There is no instrument in force delegating competence between the State and the municipality of Itaituba for the classification ‘mineral research with experimental mining’.”
In a video released by the company, a helicopter and an airplane are seen landing at the mine — yet another signal that it is a large operation.
Neither the heliport nor the runway is registered with Brazil’s National Aviation Agency (ANAC). They are clandestine. In July, ANAC’s press office said the case was being checked by the agency’s “intelligence sector” and indicated possible punishment for those responsible.
But Gana Gold doesn’t need to concern itself with this for now, because in early June, the agency published a temporary ruling allowing take-offs and landings in unregistered places within the Brazilian Amazon. The justification given by the government was “to facilitate the transport of medicines, supplies and patients to communities in these regions” during the pandemic.
The area where the 106-hectare airstrip was built was illegally deforested in 2018, according to a lawsuit filed by the Federal Public Prosecutor’s Office in Pará, which cites Nill Vitor da Silva, the registered owner of the land in the CAR (Rural Environmental Registry) system. Registers in the CAR are self-declared, and Silva’s is listed as still “pending”.
Silva’s name does not appear anywhere as a Gana Gold partner. This could be the reason why the complaint filed by the Prosecutor’s Office, made by the Amazônia Protege program — which uses data from INPE and IBAMA to hold deforesters accountable — does not mention that the deforested site serves as a clandestine landing strip for the mining company.
Public documents also indicate that the land operated by Gana Gold may be irregular. Through the Mapbiomas platform — a project run by environmental NGOs and universities — one can see that, aside from Nill Vitor da Silva, the area occupied by the mine comprises an area of 405 hectares also registered in the CAR registry system, also listed as “pending.” It is registered under the name Sebastião Luiz da Silva, who also has no apparent connection to the Gana Gold group.
The name Márcio Macedo Sobrinho also comes up in the CAR registry as owner of the precise 402 hectares where the mine is located, next to the land that would belong to Nill Vitor and Sebastião da Silva. Sobrinho’s registration, made in July 2019, comes up as “suspended” in the CAR system in Pará.
Attempts to contact Gana Gold partners Márcio Macedo Sobrinho and Domingos Dadalto Zoboli were unsuccessful and there was no answer at the numbers registered in the ANM mining process. Emails to the company were returned as having an invalid address. The same questions were sent via email to engineer Guilherme Aggens, who said by WhatsApp that he would look at the content, but he did not respond to questions about why the company is extracting 32 times the limit established by the ANM, why ownership of the land is registered in the CAR system under three different names, or even as to Aggens’ relationship with Itaituba’s Secretary of the Environment, Bruno Rolim da Silva.
In a response via Brazil’s Information Access Law, ICMBio informed me that the agency only found out about Gana Gold’s activities “by means of an institutional video being passed among WhatsApp groups in the region,” and that it began to investigate the case at the time, in April of this year.
Finally, after the Portuguese version of this article was published in The Intercept Brasil on September 16 exposing Gana Gold’s activities, ICMBio decided to take a harder stance regarding the company. On September 23, agents of the federal environmental agency seized the operation and fined Gana Gold R$ 10 million ($ 2 million) for “building, installing and operating a polluting establishment without environmental licensing,” based on article 66 of decree 6514/ 2008. The embargo affects the entire 4,000-hectare area of the Gana Gold mining process within the Tapajós Environmentally Protected Area.
One of the largest mining operations ever seen on Earth aims to despoil an ocean we are only barely beginning to understand
A short bureaucratic note from a brutally degraded microstate in the South Pacific to a little-known institution in the Caribbean is about to change the world. Few people are aware of its potential consequences, but the impacts are certain to be far-reaching. The only question is whether that change will be to the detriment of the global environment or the benefit of international governance.
In late June, the island republic of Nauru informed the International Seabed Authority (ISA) based in Kingston, Jamaica of its intention to start mining the seabed in two years’ time via a subsidiary of a Canadian firm, The Metals Company (TMC, until recently known as DeepGreen). Innocuous as it sounds, this note was a starting gun for a resource race on the planet’s last vast frontier: the abyssal plains that stretch between continental shelves deep below the oceans.
In the three months since it was fired, the sound of that shot has reverberated through government offices, conservation movements and scientific academies, and is now starting to reach a wider public, who are asking how the fate of the greatest of global commons can be decided by a sponsorship deal between a tiny island and a multinational mining corporation.
The risks are enormous. Oversight is almost impossible. Regulators admit humanity knows more about deep space than the deep ocean. The technology is unproven. Scientists are not even sure what lives in those profound ecosystems. State governments have yet to agree on a rulebook on how deep oceans can be exploited. No national ballot has ever included a vote on excavating the seabed. Conservationists, including David Attenborough and Chris Packham, argue it is reckless to go ahead with so much uncertainty and such potential devastation ahead.
Louisa Casson, an oceans campaigner at Greenpeace International, says the two-year deadline is “really dangerous”. Given the potential risks of fisheries disturbance, water contamination, sound pollution and habitat destruction for dumbo octopuses, sea pangolins and other species, she says no new licences should be approved. “This is now a test of governments who claim to want to protect the oceans,” she said. “They simply cannot allow these reckless companies to rush headlong into a race to the bottom, where little-known ecosystems will be ploughed up for profit, and the risks and liabilities will be pushed on to small island nations. We need an urgent deep-sea mining moratorium to protect the oceans.”
Mining companies also insist on urgency – to start exploration. They say the minerals – copper, cobalt, nickel and magnesium – are essential for a green transition. If the world wants to decarbonise and reach net-zero emissions by 2050, they say we must start extracting the resources for car batteries and wind turbines soon. They already have exploration permits for an expanse of international seabed as large as France and Germany combined, an area that is likely to expand rapidly. All they need now is a set of internationally agreed operating rules. The rulebook is being drawn up by the ISA, set up in 1994 by the United Nations to oversee sustainable seabed exploration for the benefit of all humanity. But progress is slower than mining companies and their investors would like.
That is why Nauru’s action is pivotal. By triggering the “two-year rule”, the island nation has in effect given regulators 24 months to finish the rulebook. At that point, it says TMC’s subsidiary Nauru Ocean Resources Inc (NORI), intends to apply for approval to begin mining in the Clarion-Clipperton zone, an expanse of the North Pacific between Hawaii and Mexico.
The deep ocean is the least known environment on Earth, a realm that still inspires awe and wonder. By one estimate, 90% of the species that researchers collect are new to science, including the pale “ghost” octopus that lays its eggs on sponge stalks anchored to manganese nodules or the single-celled, tennis-ball sized Xenophyophores. In the midnight, hadal and abyssal zones, fish and other creatures must make their own light. Biolumescent loosejaw and humpback blackdevils, a type of anglerfish, have evolved with in-built lanterns to seek out and draw in their prey. First-time human visitors often go expecting darkness and return filled with wonder at the undersea displays of living fireworks. Marine biologists believe there may be more bioluminescent creatures in the deep sea than there are species on land.
There is also thought to be a greater wealth of minerals such as copper, nickel, cobalt and rare earth elements such as yttrium, as well as substantial veins of gold, silver and platinum. Most are found near hydrothermal vents or in rock concretions known as polymetallic nodules that can be as big as a fist or as small as a fleck of skin. The challenge is gouging them out and lifting them up to the surface. When the first attempts were made to harvest nodules in the mid-1970s, the chief executive in charge of the operation exasperatedly described the task as like “standing on the top of the Empire State Building, trying to pick up small stones on the sidewalk using a long straw, at night”. Today’s technology has moved on, but scientists and conservationists doubt that it is ready and the environmental risks are fully understood. They would like more time. Nauru and TMC have given them less. The countdown clock now has 21 months left, and counting.
History does not offer much encouragement to the denizens of the deep that the issue will be resolved in their favour. Mining has provided the building blocks of civilisation. Without ore, humankind could not have had the iron age, the bronze age and certainly not the great cultures of ancient China, Nubia, Egypt, Greece, Rome, the Aztecs or Mayans. In modern times, particularly the great post-second world war acceleration of the past 70 years, more has probably been gouged from the Earth than in all of previous human history combined.
The materials for a built and manufactured environment are extracted at the expense of natural beauty, resilience and stability. For most of human history, this was considered a fair trade-off. The costs – cleared forests, scarred landscapes, polluted water, air filled with dust, carcinogens and greenhouse gases released into the atmosphere – were either unknown or deemed small compared with the gains. They rarely appeared on corporate or national balance sheets. Miners extracted oil, gas, coal, iron, gold, copper, lithium and other minerals, while leaving other species, remote communities and future generations to pay the price.
‘A throwback to the robber baron era’
Mining has often proved a trade based on imported resources and exported risk. In recent decades, this trade-off has come into question as scientific knowledge of the consequences has advanced. Environmental concerns have prompted calls for stricter regulation. But, oversight, if it exists at all, is often shaped by those who stand to benefit in the short term rather than those left to clean up the mess. And mines are moving further from power centres, which means less likelihood of Nimby protests, media coverage, challenges by conservationists or legal redress. Most of today’s mega-mines are in remote regions: the Carajás iron-ore complex and the Paragominas bauxite mine in the state of Pará, northern Brazil; the Oyu Tolgoi copper mine in Mongolia’s Gobi desert; Bingham Canyon copper mine in Utah’s Oquirrh Mountains; Chuquicamata copper mine in Chile’s Atacama desert; Mirny mine in Siberian Russia; or the many offshore oil and gas wells in the Gulf of Mexico, the North Sea, the Caribbean and elsewhere.
If mining in the deep ocean is technologically challenging and expensive, then independent oversight is even tougher: beyond all national jurisdictions, too expensive for environmental organisations to reach, too inaccessible for all but invited journalists to visit, and totally free of people so no chance of hold-ups by protesters. Fish, crustaceans and microbes might suffer, but they cannot complain.
Just like almost every other mining project in history, TMC and other mining companies promise to maintain the highest environmental standards, and to operate within guidelines laid out by regulatory bodies. And just like almost every other mining project in history, it is in their interest to exert pressure on those same regulatory bodies to ensure projects go ahead quickly with environmental standards that do not sink their bottom line.
Payal Sampat, mining programme director at the Earthworks environmental charity, said the rushed approach to deep-sea mining was reminiscent of the wild-west prospectors of the 19th century. “This really is a throwback to the early robber baron era. Our global heritage is being decided in small backroom discussions. Most people are completely unaware that this enormous planet-changing decision is being made. It is very non-transparent.” She said the mining industry had never been properly regulated. Today’s mega-pits are so big they can be seen from space, but they are governed by laws drawn up 150 years ago in the era of picks and shovels. “Deep-sea mining really represents a continuation of that destructive extractivist mindset. It is all about looking at the next frontier rather than using the resources we already have much better.”
Nauru ought to provide a salutary reminder of the destructive spiral that follows when an ecosystem is sucked dry. Once described as a Pacific idyll, the island’s topsoil was stripped of phosphate first by the British, then the Germans, then New Zealanders and Australians. They wanted the deposits to fertilise gardens and farmland in their own countries, and promised to restore the landscape and fully compensate those affected by environmental damage. By the time of independence in 1968, enough phosphate was left to briefly make the country’s 12,000 inhabitants the second-richest people on Earth. As phosphate prices rose from $10 a ton to more than $65 in the 1970s, gross domestic product per capita topped $50,000, second only to Saudi Arabia.
But within two decades, the resource was virtually exhausted, leaving an inland moonscape of gnarled, spiky rock and an economy in tatters. Restitution funds were supposed to rehabilitate 400 hectares (1,000 acres), but they have been frittered away in the past 25 years with barely six hectares recovered.
The gutting of the topsoil has caused unforeseen problems to the local climate, vegetation and society. Loss of vegetation has prevented rain clouds from forming over the island and led to more droughts. Several endemic plant species are now endangered and food production has been affected. Locals have turned from healthy local produce, such as coconuts, to fatty and salty tinned goods, resulting in one of the highest levels of obesity, heart disease and diabetes in the world. As one former finance minister put it: “Nauru was once a tropical paradise, a rainforest hung with fruits and flowers, vines and orchids. Now, thanks to human avarice … and short-sightedness, our island is mostly a wasteland.”
The 12,000 inhabitants have resisted repeated attempts to relocate them to an island off Queensland and looked for new ways to make a living. After the economy collapsed, the desperate government turned to offshore banking. But with customers that included the Russian mafia and al-Qaida, the US Treasury blacklisted the island as a centre of money laundering and corruption. After that failure, the microstate rented itself out to Australia as a detention centre for asylum seekers, a business that now provides more than half of the state revenue. When that declined, Nauru began to eye up the surrounding seabed by teaming up with TMC, which is paying tens of millions of dollars a year in royalties for its fully owned NORI subsidiary.
At the ISA, Nauru is supposed to be a sponsor nation for TMC. In reality, the island acts more like a client state for the corporation, and a company executive can behave as its spokesperson. In 2019, as chairman of DeepGreen Metals, Gerard Barron, was listed as a member of the Nauru delegation and spoke from the island’s seat in the plenary meeting.
Little wonder then that eyebrows were raised when this tiny nation, which constitutes just 0.00016% of the world’s population, took the initiative to open up the seabed. Few observers doubt that this was done at the behest of TMC.
Matthew Gianni, co-founder of the Deep Sea Conservation Coalition, said: “This is all about money – money for DeepGreen [TMC] and its shareholders and money for Nauru – and the fear that if DeepGreen doesn’t get a licence soon, investors will walk away from the company and both DeepGreen and Nauru will lose out on any revenue.” He said the case showed the need to shake up international governance. “The ISA’s decision-making process is seriously flawed and needs to be fixed.”
In lieu of comment, The Metals Company referred questions to three external experts that it said specialised in deep-sea ecosystems and plume dynamics.
TMC is among a cluster of mining companies that argue seabed minerals are essential if the world is to make the transition from fossil fuels to renewables. Barron, its chief executive and chairman, is fond of stating that a single 75kW electric vehicle battery requires 56kg of nickel and 7kg each of manganese and cobalt, plus 85kg of copper for the vehicle’s wiring. To convert the world’s 1bn-plus combustion-engine cars to electric would require far more metal than is currently produced on land. Barron says tapping seabed resources would still not close the supply gap, but that it could accelerate the transition, reduce mining emissions and provide revenue for poorer countries. As a sign of TMC’s commitment to the environment, he says the company would halt production after the world has enough minerals for 2bn batteries, because that would be enough to allow full recycling.
But many battery-makers and industrial users are lining up with the conservationists rather than the miners. In April, BMW, Volvo, Google and Samsung joined a World Wildlife Fund (WWF) call for a moratorium on seabed mining. Scientists and campaigners say TMC is creating a false sense of urgency about the need for deep-sea minerals. They say existing mineral supplies are sufficient for the coming 10 years and after that much of the demand could be met by fast-improving recycling technology. Others are sceptical about the promise of a 2bn battery cap. Lisa Levin, a professor of biological oceanography at Scripps Institution of Oceanography, said: “Once you start up a new industry it won’t just be DeepGreen [TMC], it will be multiple countries. It will be very hard to stop. Mining needs to continue for 20 or 30 years to recoup investment. It’s not something you put back in the box.”
Who are the ISA?
Many observers accept that deep-sea mining will go ahead at some point. But it needs to be done carefully, after the risks are fully assessed, the technology is perfected and oversight systems are made as robust as possible to ensure minimal impact on ocean ecosystems. The world might have more confidence that this was the case if the regulatory body was more open, more democratic, less focused on commercial gain and more attuned to environmental loss. As it is, however, the ISA is geared towards ploughing ahead.
It held its first meeting in Kingston, Jamaica, on 16-18 November 1994. The venue for this and subsequent gatherings was the Jamaica Conference Centre, which boasts of being “the Caribbean’s most sophisticated meeting place”. In the heat outside, angular concrete lines stand out between palm trees and fountains. Inside, the air-conditioned conference centre is decorated with bright hand-woven panels. This is a multinational world where you pay in dollars. ISA delegates roll up in diplomatic limousines, some with little flags on the bonnet, and congregate between meeting rooms, the marble lobby, and over cocktails in bars looking out across the Caribbean. In the evenings, delegates and contractors are invited to soirees hosted by the Jamaican government or dinner at the mansion of the ISA secretary general, Michael Lodge, high on the hill overlooking the harbour.
Lodge, a British lawyer, wants member states to agree on a rulebook that will set standards for mining practices and allow commercial operations to begin. Discussions on this topic have been under way since 2017, but have been snarled up over how to share future mining proceeds among nations. The ISA prefers to treat this as a technocratic problem. But, as the intervention of Nauru has shown, this is about much more fundamental issues of global governance and politics. Does the world want to be pushed into the final frontier of the global commons by a desperate microstate and a multinational mining company? Is it willing to take the risk that the ocean floor will end up like Nauru, a victim of over-exploitation and false promises of restoration?
Archive documents show corporations have tried to influence the ISA since its inception. In the 1980s, multinational corporations, such as Lockheed Martin and Sumitomo, were lobbying governments to ensure the UN Convention on the Law of the Sea “should contain a bias in favour of mining production”.
The UN general assembly subsequently approved the funding of the ISA in 1994, noting that the ocean floor and subsoil, beyond the limits of national jurisdiction, were the common heritage of humanity and should be dealt with in line with “the growing reliance on market principles”. Other species and ecosystems were an afterthought. To circumvent regulatory hold-ups, wealthy nations also pushed for a “two-year rule” that could be initiated by any country. Once that process begins, the onus shifts to the regulators to adopt exploitation regulations within 24 months.
In theory, every country in the world is involved in the ISA’s decision-making. In practice, power lies with a small group of experts that is weighted in favour of mining. There is no specialist environmental or science assessment group to vet applications for new contracts. Instead, new contracts are initially made by the ISA’s Legal and Technical Commission (LTC), which comprises just 30 members. Their decisions can only be overturned by a super-majority of two thirds of the full council, which comprises 36 states.
The commission has a 100% record of approving exploration applications, for which ISA charges a $500,000 (£365,000) processing fee. Membership of the LTC is skewed towards extraction rather than environmental oversight – a fifth of the members work directly for contractors with deep-sea mining projects. They include Nobuyuki Okamoto, who established Japan Oil, Gas and Metals National Corporation, which has started its own seafloor exploration, and Carsten Rühlemann, who works for Germany’s Federal Institute for Geosciences and Natural Resources, which holds exploration contracts in the Pacific and Indian Oceans. Many others have a background in mining or oil and gas exploration. Among them are the chair of the commission, Harald Brekke, who is a senior geologist at the Norwegian Petroleum Directorate; Pakistan’s representative, Khalid Mehmood Awan, who has worked for offshore oil and gas companies; and an Australian geologist, Mark Alcock, who is listed as working previously in surveying for petroleum and minerals exploration. By comparison, only three members are obviously focused on marine ecosystems, such as Gordon Lindsay Paterson, a zoologist at the Natural History Museum in London.
A spokesperson for the ISA said: “Members of the LTC are elected by the council from among the candidates nominated by states parties to UNCLOS [United Nations Convention on the Law of the Sea]. States parties shall nominate candidates of the highest standards of competence and integrity with qualifications in relevant fields. The council shall endeavour to ensure that the membership of the LTC reflects all appropriate qualifications. In the election of members of the LTC, due account shall be taken of the need for equitable geographical distribution and the representation of special interests.”
It added that 31 contracts for exploration had been granted so far and the “evaluation by the LTC of an application for a plan of work for exploration is a rigorous process”.
Some members of the LTC privately recognise the need for change, so the risks to this vast new area of exploration can be properly evaluated. “We probably know more about outer space than we do about this [deep-sea] frontier,” said a delegate who asked to remain anonymous. “I have heard suggestions for more environmental oversight, and I cannot say I have a contrary view.”
It is not just small island states that are complicit. Seabed resources are supposed to benefit all of humanity and promote sustainable development, but just three companies from wealthy nations have a hand in eight of the 10 contracts to explore for minerals in the Pacific’s Clarion-Clipperton zone that have been awarded since 2010: the Canadian-registered TMC (formerly DeepGreen), the Belgian corporation Dredging Environmental and Marine Engineering (DEME), and UK Seabed Resources, a subsidiary of the US arms manufacturer Lockheed Martin.
The role of these companies is opaque. None of the parent companies are included by the ISA in its list of contractors. A common practice is to operate through subsidiaries or by taking shares in partners in small island states, often in conjunction with national governments. This leads to concerns about accountability in the event of an accident: the subsidiaries are often small, which could leave poor nations with huge liabilities.
The British government has fudged its response to Nauru pulling the two-year trigger. This seems appropriate for a former colonial power that is still struggling to match its claims for environmental leadership with actions that run against its continued dependence on exploiting overseas resources. In 2019, the House of Commons environmental audit committee, including the Tory MP Zac Goldsmith, now Lord Goldsmith and minister for Pacific and the environment, concluded that deep-sea mining would have “catastrophic impacts on the seafloor”; that the ISA benefiting from revenues from issuing mining licenses was “a clear conflict of interest” and that the case for deep-sea mining had not yet been made.
However, ties between the UK government and the deep-sea mining industry have been unhealthily cosy. A Cabinet Office official has moved to Lockheed Martin, which owns UK Seabed Resources, to head their government affairs department. The former prime minister David Cameron used Lockheed Martin’s estimates of the potential value of the deep-sea mining industry, rather than independent analysis. When Greenpeace was finally granted a freedom of information request for the deep-sea mining licences between the British government and UK Seabed Resources, it found it was “riddled with errors and inaccuracies”, that it was based on outdated legislation and that it extended for a duration beyond the limits permitted by UK law.
When asked a parliamentary question about Nauru and the two-year trigger, the then business minister Nadhim Zahawi refused to support a moratorium and said the UK’s position was to wait for sufficient scientific evidence and strong environmental regulations. Zahawi has a deeper background in mineral exploration than any other MP. Before he joined the government, he received more than £1m in salary and bonuses from Gulf Keystone Petroleum, worked as a consultant for the Canadian oil firm Talisman and declared shares in the oil firm Genel Energy and Gulf Keystone. There is no suggestion of wrongdoing but – like many members of the LTC – he may be predisposed towards the extractive industries, having made a living from them for so many years.
Activists say it is not too late to stop the clock; opposition is gaining momentum. The world congress of the International Union for the Conservation of Nature earlier this month voted overwhelmingly to ban deep-sea mining. Support for the motion came from government delegates as well as civil society. Although the vote is non-binding, it highlights the broad unease at the shotgun tactics of Nauru and TMC. There are also plans for an appeal to another UN body, the International Tribunal for the Law of the Sea, against allowing deep-sea mining.
Our common heritage
Few countries are outright opposed to the mining, but many would prefer to wait. Their motives differ widely. On one side are nations such as Costa Rica, Fiji and Germany that are wary about the environmental implications. On the other are nations such as Chile and many African countries, with strong terrestrial mining interests, that do not want to see more competition that could drive down prices for their minerals. The African Group of nations has come out strongly against Nauru’s move, saying it is “likely to weaken rather than facilitate the development of an effective regime fully embodying the common heritage of mankind principle”.
Academics and civil society groups believe TMC has overplayed its hand. They hope its premature move to set a deadline will spur reforms of the ISA. Pradeep Singh, an ISA observer and ocean expert at the Institute for Advanced Sustainability Studies in Potsdam, Germany, said: “It does not say too much about the ISA decision-making process, to be honest, except that it is regrettable that the provision has been invoked. Perhaps the timing of the move to invoke the provision is less related to actually getting the process moving at the ISA but more related to increasing market confidence or value, and attracting investors to invest in the contractor.”
The case raises still deeper questions about humanity’s treatment of the Earth, particularly the dangerous gap between caring for our immediate local environment while turning a blind eye to what happens in the planet’s more remote corners. The French philosopher Bruno Latour traces this back to colonial thinking, which continues in present-day neoliberal capitalism. “Every state delineated by its borders is obliged, by definition, to lie about what allows it to exist since, if it is wealthy and developed, it has to expand over other territories on the quiet, though without seeing itself as being responsible for those territories in any way,” he writes in his new book After Lockdown: A Metamorphosis. “That’s a basic hypocrisy that creates a disconnect between, on the one hand, the world I live in as a citizen of a developed country, and, on the other, the world I live off, as a consumer of the same country. As if every state was coupled with a shadow state that never stopped haunting it, a doppelganger that provides for it on the one hand and is devoured by it, on the other.”
A pithier argument is made by Will McCallum, head of oceans at Greenpeace UK, who fears the deep sea will suffer like all other newly opened territories. “Any claim of not being environmentally damaging is meaningless, as we have no idea now what that environment is,” he said.
“We have never entered a frontier and not fucked it up more.”