Navigating the waters of deep sea mining financial risk: The half-trillion dollar gamble

INSIGHT by Planet Tracker

Betting on resource extraction over nature preservation is a financial mistake, according to Planet Tracker’s latest report, “How to Lose Half a Trillion“, which finds that sectors dependent on preserving intact ecosystems have outperformed those engaged in exploitation by threefold in terms of financial returns over the last three decades.

Correcting this mistake is crucial now, as ambitions crystallise to mine the deep sea. The analysis finds that chasing this ecological disaster could cause over USD 500 billion in value destruction, of which USD 30-132 billion in the mining sector itself.

“Before factoring in any environmental impacts, the economics already appear uncompelling. High operating expenditures mean that returns will be negative for investors in deep sea mining, which will also destroy value in other sectors, such as terrestrial mining and fishing”.

-Report lead author François Mosnier, Head of Oceans at Planet Tracker

Moreover, the negative impact on the deep sea’s ecosystem services could lead to natural capital destruction of at least USD 465 billion, predominantly through habitat destruction.

However, there is a silver lining. Financial market participants have the power to prevent this potential loss of at least half a trillion dollars by endorsing a moratorium on deep sea mining.

“It is not often that financial markets can claim a major success in nature conservation while avoiding significant destruction to corporate value and natural capital. Preventing deep sea mining would be such an opportunity”, stated Mosnier.

The findings of this report underscore the need for a paradigm shift in the way financial markets perceive nature. By recognizing the inherent value in preserving ecosystems, investors have the potential to safeguard both the environment and their financial interests.

How to Lose Half a Trillion can be downloaded here.