Study in support of Impact Assessment work for ocean energy - Europa

Study to investigate state of knowledge of deep sea mining

A proposal under FWC MARE/2012/06 – SC E1/2012/01

Client: DG Maritime Affairs and Fisheries

Rotterdam/Brussels,

01 August 2013

Study to investigate state of knowledge of deep sea mining A proposal under FWC MARE/2012/06 – SC E1/2012/01

Client: DG Maritime Affairs and Fisheries Brussels/Rotterdam, 01 August 2013

About Ecorys and Consortium Partners

Consortium Lead Partner ECORYS Nederland BV P.O. Box 4175 3006 AD Rotterdam The Netherlands T +31 (0)10 453 88 00 F +31 (0)10 453 07 68 E [email protected] Registration no. 24316726 www.ecorys.com

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BR27529

Table of contents

1 Administrative information 5

2 Introduction 6 2.1 Background 6 2.2 Relevance of deep sea mining for the European Union 7

2.2.1 Economic value 7 2.2.2 Environmental impacts 7 2.2.3 Resource use 8 2.2.4 Industry and research participation 8

2.3 Purpose of this study 11

3 Approach and methodology 13 3.1 Approach 13 3.2 Expertise required 15 3.3 Principles behind our approach 17

4 Elaboration of activities 18 4.1 Task 0: Study Inception 18 4.2 Business stream 19

4.2.1 Task 1: Technology Analysis 19 4.2.2 Task 2: Economic Analysis 25 4.2.3 Task 5: Project Analysis 29 4.2.4 Task 7: Preparing the public consultation and website 31

4.3 Legal stream: task 3: Legal Analysis 33 4.4 Environmental stream 35

4.4.1 Task 4: Geological Analysis 35 4.4.2 Task 6: Environmental Analysis 37

4.5 Deliverables 43

5 Organisation and work plan 44 5.1 Work plan 44 5.2 Project team 46

5.2.1 Core team 46 5.2.2 Expert team 48 5.2.3 Support staff 49 5.2.4 Quality assurance 49

5.3 Resource allocation 49

6 Budget 51

Annex I – CVs 53

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1 Administrative information

Tenderer

Ecorys Nederland BV

Watermanweg 44 3067 GG Rotterdam P.O. Box 4175

3006 AD Rotterdam The Netherlands

Contact Person

a) Surname Jan Maarten de Vet

b) Title (e.g. Dr, Mr, Ms) Mr

c) Position (e.g. manager) Director

Ecorys Brussels

d) Telephone number +32 2 743 8564 / +32 497 87 84 37

e) E-mail address [email protected]; [email protected]

f) Internet address www.ecorys.com

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mailto:[email protected]

mailto:[email protected]

http://www.ecorys.com/

2 Introduction

2.1 Background

Interest in deep sea mining operations has been developing since the mid-1960s when it was determined as an alternative way for accessing minerals, primarily for manganese nodules. However, as knowledge and technology progressed it became clear that real costs of this kind of exploration and extraction might go beyond what had been initially forecasted. At the same time, additional land-based deposits of minerals have been discovered which have redirected efforts and led to a decrease in market price. Nevertheless, over the past ten years access to raw materials has once again become a focal point for the European Union (EU). Currently, the EU is increasingly dependent on imports for some strategically important raw materials, while exploration and extraction of these materials is facing increased competition and a strongly regulated market environment. The European Commission (EC) has identified a list of 14 critical raw materials of which deposits and production are concentrated in countries outside the EU. Out of the 14 critical raw materials, 10 have primary deposits located in China. Strong reliance and limited current access coupled with uncertain future availability of these minerals for the EU have led to a revitalised interest to identify alternative deposits, including on the seabed. While it is presumed that seabed deposits of minerals can possibly outweigh those of land-based deposits, technologies to exploit these resources are not fully developed. Additionally, the impacts that seabed mining might have on the environment are still largely unknown. Impacts are presumed to vary to a large extent based on the types of ore and their location. While the same is true for many land-based mining operations, the levels of uncertainty are far superior with regard to deep sea mining. It is important to define tools which would allow comparing and rating the extent of impacts that the different mining operations might have. Ensuring that deep sea mining technologies keep interference with the benthic environment to a minimum is essential, since ensuring sustainable access to raw materials is one of the pillars of the EU`s raw materials policy framework.1 Moreover, strong regulatory restrictions for mining in international waters imposed by the United Nations Convention on the Law of the Sea (UNCLOS) limit the number of exploration licences granted. Granting such licences for deep sea mining in international waters falls under the competence of the International Seabed Authority (ISA), which was established under the UNCLOS to organize and control activities in international waters, particularly with a view to administering the resources. Social implications of deep sea mining are also likely to be relevant, particularly given the knowledge that most of the deposits are found outside EU waters – mainly in open water or near small island states in the Pacific Ocean. Some of the social impacts could be local employment, increased skills base, as well as disruption of the local economic structure. Similar concerns are also faced in land-based mining activities in other relatively remote regions such as the Arctic.

1 European Commission (2013): Raw materials, sustainable supply in the EU, available at http://ec.europa.eu/enterprise/policies/raw-materials/sustainable-supply/

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http://ec.europa.eu/enterprise/policies/raw-materials/sustainable-supply/

2.2 Relevance of deep sea mining for the European Union

2.2.1 Economic value Marine mining and deep sea mining are part of the EU`s Blue Growth strategy under the thematic area of marine mineral resources. 2 According to the Communication, up to 10% of global production of minerals such as cobalt, copper and zinc could come from the ocean floors by 2030, providing global annual turnover of up to €10 billion. The primary goal for the European Union is to identify the economic feasibility and environmental impact of accessing and extracting deep sea minerals deemed strategic, as well as to ensure the competitive position of European stakeholders. In order to ensure competitiveness it is important to assess social factors such as available and emerging skills for all technological and manufacturing phases of the deep sea mining process. This would also ensure that future financing of the sector, particularly in the case of research and innovation, takes into consideration long-term development potential. In terms of competitive positioning, as shown already in the marine minerals sub-function analysis that was part of the Blue Growth study, the EU-27 ranked second in terms of inventions related to this field, after the USA and before China, Japan and Korea, based on 2010 data. In terms of scientific citations the EU leads the rankings. However, in terms of patents assigned the picture is more mixed, with several large EU companies present along with enterprises from China, Korea and other parts of the world. This suggests that the economic value in terms of industry involvement needs to be addressed in further detail so as to identify potential strengths and weaknesses, as well as competitive advantages and disadvantages.

2.2.2 Environmental impacts One of the key concerns related to deep sea mining is the environmental impacts that threaten the ecological and physical properties of the seabed and of (deep water) ecosystems. Possible environmental impacts could include: • Loss of (unknown) biodiversity; • Sediment composition; • Water pollution and increased turbidity; • GHG emission; • Noise pollution; and, • Waste generation. Sustainability of marine and maritime areas have long been a primary objective for EU policies, including Maritime Spatial Planning and Integrated Coastal Management as well as more recent regional strategies such as the 2013 Action Plan for a Maritime Strategy in the Atlantic area.3

2 European Commission (2012): Blue Growth Communication. Available at http://ec.europa.eu/maritimeaffairs/policy/blue_growth/documents/com_2012_494_en.pdf

3 European Commission (2013): Action Plan for a Maritime Strategy in the Atlantic area, available at http://ec.europa.eu/maritimeaffairs/policy/sea_basins/atlantic_ocean/documents/com_2013_279_en.pdf

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http://ec.europa.eu/maritimeaffairs/policy/blue_growth/documents/com_2012_494_en.pdf

http://ec.europa.eu/maritimeaffairs/policy/sea_basins/atlantic_ocean/documents/com_2013_279_en.pdf

Therefore, it is crucial to understand the level of environmental impact that mining activities could have in the deep sea environment and in oceans around the world. Furthermore, these activities could also have spill-over impacts on increased port and shipping activities, which could potentially carry additional environmental consequences.

2.2.3 Resource use Raw materials are an essential part of consumer products and industrial applications around the world. As their main deposits are now to be found outside the territorial borders of the EU, ensuring access to these is of primary importance. A selection of 14 raw materials are now considered as "critical" for the EU. These are: Antimony, Beryllium, Cobalt, Fluorspar, Gallium, Germanium, Graphite, Indium, Magnesium, Niobium, Platinum Group Metals, Rare Earth Metals, Tantalum and Tungsten. Many of these are also found on the seabed and can be categorised in three forms in which deposits are present: • Polymetallic nodules contain: manganese, iron, silicon, aluminium, nickel, copper, cobalt and

rare earth minerals;

• Polymetallic sulphides can contain sulphides and concentrations of metals including copper, lead, zinc, gold and silver; and

• Cobalt rich crusts can contain metallic and rare earth elements such as titanium, cerium, nickel, platinum, manganese, phosphorus, thallium, tellurium, zirconium, tungsten, bismuth and molybdenum.

2.2.4 Industry and research participation In conventional land-based mining, rock is disaggregated by explosives and either shovelled/loaded into a truck or placed on a conveyor belt for transport to a stockpile or processing plant. In deep sea mining (hence called DSM) the overall process is similar: excavation, lifting (in this case vertical lifting to surface) and then transport (by ship) to a processing facility. However, more technological challenges exist when mining in crusts and vents which are embedded in the seafloor. Autonomous vehicles (ROVs) are required, to cut the deep sea for ferromanganese crust and polymetallic sulphides. However, there are risks. For example, the ocean depth as well as the size of the ore deposits puts immense pressures on machines. Additionally, physical cutting or physical ripping or grabbing of material using rotating cutter heads may result in wear/tear of machinery and abrasion. Risks of damage to expensive machinery requires detailed knowledge of the physical rock properties, which is often not available Depending on type and location of the deposit, the ROV needs to cope with extreme depths, potentially freezing conditions and varying undulation slopes. The riser, which transports the slurry excavated by the ROV, is put under extreme pressure from the depth, the weight of the ore and the underwater currents. In addition to these sub-surface issues, the operations vessel on the surface must remain stable in a fixed position in order to support the sub-surface vehicles. When finally the large amounts of ore reach the surface, they need to be transported to treatment facilities, which in some cases demands large distances to be covered on demanding expanses of sea. The technologies required for DSM exploration have benefitted from several decades of research related to technological innovation. The main sectors active in this area were the oil and gas and the dredging sectors. The rapid development of these industries has resulted in a current situation

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in which the bottom of the seas can be explored and sampled in most environments and depths (provided the availability of substantial investments). The World Ocean Review 2010 presents a schematic overview (shown below) of the technologies expected to be relevant for the different types of mineral deposits and currently used in the exploration phase.4

a) Depth profile using echo-sounder; b)ROVs for sampling and image taking; c) AUVs to take samples, echo, and pictures at the sea-floor; d) Large net construction to take samples by dredging the sea-floor; e) Multirosettes to take water samples at different depths; f) Grab arm to take individual samples (Maribus, 2010).

The technology for the excavation phase of deep sea mining is less developed and depends on the type of deposit. For nodules, previous attempts to harvest the sea-floor have brought some innovative ideas. The systems have never, however, been able to yield substantial results. The hydraulic mining system has been suggested as a way forward, as shown in the schematic below.

4 World Oceanic Review, 2010. Marine minerals and energy. Available at http://worldoceanreview.com/en/wor-1/energy/ [Accessed on 26 July 2013].

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http://worldoceanreview.com/en/wor-1/energy/

Source: ISA, 2006b

Since the 1970s when interest in DSM first emerged, large progress has been made in relevant technology, primarily in the oil and gas industry. Additionally, European companies have become world leaders in technology for dredging, drilling, shipping, ROVs, transport and cutters. In dredging, for example, IHC Merwede is claimed to take up 50% of the world market of specialised dredging and excavation ships.5 Relevant skills in Europe have developed in line with many of the needs of DSM and the activities of several EU companies are propelling the development of such skills in the region. EU companies have built up a considerable experience and expertise in the adjacent technologies mainly used in oil and gas exploitation – only a limited number of companies are exclusively dealing with sub-sea mining. As an example, a non-exhaustive list of some active market players involved in DSM technology research are listed below. Company Main activity Country

Nautilus Minerals, Inc. Exploration UK/US

Neptune Minerals, Inc. Exploration Canada

Manafa Exploration/ Extraction Saudi-Arabia

Technip Exploration/ Extraction France

Bluewater Metals South Pacific Inc Exploration Australia

United Nickel Inc. Exploration Canada

Nauru Ocean Resources Exploration Nauru

IHC Merwede Extraction/Transport Netherlands

Harren & Partner Transport Germany

Voest-Alpine Bergtechnik Extraction Germany

SMS Siemag Extraction Germany

Subsea Minerals Extraction UK

Soil Machine Dynamics Extraction UK

Fugro Seacore Mining Ltd. Extraction UK

5 Interview with IHC Merwede, 26 July 2011

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Sources: Jarowinsky, Michael (2009), Thakur (2011) and Ecorys

It is clear that the development of technologies for deep sea mining will be essential for increased project feasibility, as well as for the provision of additional raw materials and for Blue Growth in the EU. In line with these important aspects, several European Public-Private Partnerships (PPPs) are ongoing to support the still nascent industry, mainly in Germany and France:

• In France, the government launched a partnership with and between a number of organisations including Technip, IFREMER and Areva to explore the polymetallic sulphides in the EEZ of the French Overseas Territory of the Wallis and Futuna Islands. The expeditions are part of the (previous) French government’s Grenelle de la Mer policy and aim map the oceans in terms of biodiversity and minerals for possible excavation and in support of French maritime technology.6

• The German ‘Kiel Cluster of Excellence - The Future Oceans’ has built up considerable knowledge on marine mineral resources. The cluster is a partnership between Kiel Liebnitz Institute of Marine Sciences (IFM-GEOMAR – an institute also participating in the project team proposed), the Kiel Institute for the World Economy and the Muthesius Academy of Fine Arts. It was funded by the German Research Foundation until around 2011.7

There are several company initiatives which bring together stakeholders, for example OceanflORE is a Dutch - Belgian joint venture between IHC Merwede and DEME which started in 2011. The venture aims to make offshore mining “possible, profitable and sustainable” by acting as an interface between mine owners, financial markets, competent authorities and technology providers. European initiatives are limited to more comprehensive studies, for example the FP7 project The Deep Sea & Sub-Seafloor Frontier (DS³F) is led by the University of Bremen in cooperation with eight other research institutes. The €1.16m project aims to provide scenarios and pathways to a sustainable use of the oceans. Marine mineral materials are one of the aspects investigated.8 The above gives just a first overview of technology concepts and stakeholders. Within the scope of the study, further elaboration of the elements will be addressed.

2.3 Purpose of this study

The Commission is preparing an impact assessment on seabed mining with the intention to ensure that EU Member States and stakeholders are able to capitalise on the potential of seabed mining to generate sustainable growth and jobs. The main purpose of this study is to feed information, data and specific examples into the impact assessment to substantiate the options of the impact assessment and support any final recommendations. Three main types of deep sea mining will be assessed in the study, these are: • Polymetallic nodules; • Polymetallic sulphides; and • Cobalt-rich crusts.

6 Grenelle de la Mer (2010) Exploration et mise en valeur des ressources minérales et de la biodiversité de la Zone Économique Exclusive (ZEE) française: la campagne d’exploration des fonds sous-marins au large de Wallis et Futuna est en cours. Press release, Paris 6 September 2010.

7 http://www.ozean-der-zukunft.de/english/the-network/the-cluster/overview/ 8 CORDIS (2011)

http://cordis.europa.eu/fetch?CALLER=FP7_PROJ_EN&ACTION=D&DOC=384&CAT=PROJ&QUERY=011df61b4e6a:14bb:73933ea8&RCN=93532

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This study looks to collect all available information – as accessible – on the technology, the economic, environmental and social factors that are relevant for deep sea mining operations. Consequently, the study focuses on the operations that are being planned or are being carried out as opposed to presenting general discussions on deep sea mining. Additionally, the findings of this study are also intended to provide a clearer picture of the current state of the sector worldwide and will be used to inform the Commission services specifically – but not exhaustively – in relation to: • Future research and development tender calls; • ERA-MIN and ERA-NET projects; • Strategic Implementation Plan for the European Innovation Partnership on Raw Materials; • Possible Horizon 2020 action; • Natura 2000 guidance; and • Implementation of the Marine Strategy Framework Directive.

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3 Approach and methodology

3.1 Approach

As identified in the tender specifications the proposed approach to this evaluation involves carrying out the following Tasks: • Task 1: Project Inception • Task 2: Technology Analysis • Task 3: Economic Analysis • Task 4: Legal Analysis • Task 5: Geological Analysis • Task 6: Project Analysis • Task 7: Environmental Analysis • Task 8: Preparation for public consultation Please note that the listing of the above tasks does not define a timeline of implementation, as some of the tasks are expected to be carried out simultaneously. This is necessary because information resulting from the analysis is expected to be exchanged between the project teams. In order to highlight the complementarity of the tasks, three main work streams have been defined. The work streams include those tasks and activities that are closely intertwined and would expect to be implemented in close coordination. The three streams identified are:

I. Business stream II. Legal stream

III. Environmental stream Before starting the work in each stream – which will run largely in parallel, an inception phase is introduced. The following table presents an overview of the work streams, the individual Tasks and the specific activities. Task numbers correspond to those in the Tender Specifications. It is noted that Tasks 7 (public consultation preparation) and 8 (dissemination) have been merged into one Task.

Table 3.1: Presentation of the Project Tasks Work streams Project Tasks Activities

0, Project Inception

1. Kick-off meeting

2. Inception report

3. Work plan

Business stream

1. Technology

Analysis

1. Describe proposed value chain from extraction to

refining. Preliminary analysis findings will be reported

after 4 months in the interim report

2. Workshop to present the interim report and discuss with

industry and scientific experts.

2. Economic Analysis

1. Define criteria for economic viability: include associated

costs with seabed topography and oceanography

2. Develop a simple econometric model with global

coverage to assess profitability using the previously

defined criteria

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Work streams Project Tasks Activities

3. Prepare three case studies, one for each deposit

category (polymetallic nodules, polymetallic sulphides

and cobalt- rich crusts) including market price scenarios

4. Identify strategically important scenarios for Europe

based on the case studies

5. Assess alternative methods to obtaining the minerals

including land-based mining, recycling etc.

5. Project Analysis

1. Provide an overview of the deep sea mining projects

including those in planning phase and for shallow

mining minerals

2. Summarise the involvement of countries in the projects

– including those external to the EU

3. Map seabed mining activities worldwide suitable for

incorporation into the EMODnet Human Activities portal

7. Preparation for

public consultation

8. Dissemination

1. Prepare a questionnaire after 2 months into the project,

inform and mobilise stakeholders

2. Prepare a draft consultation paper of max 4 pages

3. Set up a website and invite feedback

Legal stream 3. Legal Analysis

1. Describe national, European and international legal

frameworks (EEZ, ABNJ)

2. Identify similarities and differences between these

regimes

Preliminary analysis results will be reported after 4

months in the interim report

Environmental stream

4. Geological Analysis

1. Provide a comprehensive overview of worldwide sites

subject to surveys including availability and

interoperability of data

2. Make suggestions for prioritization of future mapping

and sampling efforts

3. Produce map layers showing possible and surveyed

mineral deposit, deep sea mining projects and

economic viability

6. Environmental

Analysis

1. Compile existing information on environmental impacts

of deep sea mining including literature review, inventory

of impacts and identify gaps of knowledge

2. Propose a roadmap towards a sufficient assessment of

impacts in order to define operational targets for GES

include estimation of costs and benefits

3. Compile an overview of monitoring techniques,

including literature review, inventory of existing

methods and identification of shortfalls

4. Contrast and compare deep sea mining with land-

based methods for the entire value chain

Preliminary analysis results will be reported after 4

months in the interim report

5. Organise a workshop on environmental impacts to

share methodologies, and guidelines on evaluating

GES descriptors and to fill the gaps

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The overall analysis will incorporate country specific examples as well as stakeholder perspectives and the results of the evaluation process will be disseminated to DG MARE and the stakeholders in up to three presentations. The individual tasks along with the staff involvement and expertise used are further described in the following chapter.

3.2 Expertise required

The Terms of Reference, and the topic as such, call for a team bringing together the necessary expertise particularly in: • The mining sector and in particular the sea bed mining sector, which we believe to be relevant

notably from a technology, commercial and project specific perspective, as well as from a geological and environmental angle.

• The EU acquis, especially as regard coastal and marine environmental policies and issues. • The demand side of raw materials and rare earth elements, from a worldwide perspective, and

the behaviour of the commodity markets that affect developments and prices in this sector. • The Commission Impact Assessment system, relevant in view of eventual follow-up actions that

may build upon the study to be delivered. The team proposed brings together comprehensive expertise on the subject of DSM as well as the thematic areas of legal, environmental, technological and economic analysis. We believe that the project team gathers all available expertise at the highest level. Aside from Ecorys, our consortium partner MRAG and our subcontractor GRID Arendal, external experts will also be used to complement internal expertise in the following three thematic fields: • Geological survey (GEOMAR Helmholz Centre of Ocean Research Kiel); • Mining engineering (TU Delft Department of Geosciences and Engineering); and • Deep sea ecology and environment (Seascape Consultants). Our aim is to assure seamless information flow between the tasks and the project teams involved. Therefore, the work of external experts will not be limited to one specific task but will be used horizontally. More detailed information on project staff and expertise is provided in chapter 5 of this proposal as well as in the description of the individual tasks. Ecorys will serve as the project leader for this study providing sound economic and environmental expertise to support the specific skills of our project partners. Ecorys also brings along 84 years of experience covering economy and competitiveness, sustainability, energy and water, transport and mobility, social policy, education, health and governance. Ecorys’ track record includes work on the side of commodities markets (raw materials sector, competitiveness of user sectors, trade agreement), project assessment and commercial & socio-economic feasibility assessment (individual project evaluations as well as ex ante & ex post programme assessment) as well as Impact Assessment support to the European Commission in various domains including that of Blue Growth. Our consortium partner, MRAG will provide legal analysis based on their far-reaching expertise on marine and maritime industries. MRAG will be represented in this project by Stephen Hodgson, who is an international natural resources lawyer with experience on international law such as UNCLOS as well as the legal implications of the implementation of EEZs. He will be supported by

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Andrew Serdy who lectures at the Institute of Maritime Law at the University of Southampton in the UK and will provide legal review. Our subcontractor GRID Arendal is a centre collaborating with the United Nations Environment Programme (UNEP), supporting informed decision making and awareness-raising through environmental information management and assessment, capacity building services and outreach and communication tools, methodologies and products. GRID Arendal was recently commissioned by the Secretariat of the Pacific Community to provide a comprehensive review of deep sea minerals in the region, in order to support the development of a regional Legal and Fiscal Framework for Sustainable Resource Management. GEOMAR Helmholtz Centre for Ocean Research Kiel is one of the world’s leading institutes in the field of marine sciences. The institute investigates the chemical, physical, biological and geological processes of the seafloor, oceans and ocean margins and their interactions with the atmosphere. Significant research emphasis is placed on, amongst other, seafloor resources such as gas hydrates and polymetallic massive sulphides. The Research Division of Dynamics of the Ocean Floor includes Magmatic and Hydrothermal Systems which hosts scientists specializing in geochemistry, mineralogy, petrology, and volcanology where the main research focus is on the geodynamic, volcanic, sedimentary and hydrothermal processes that shape the seafloor, and the impact of these processes on the environment, e.g. climate and natural hazards. GEOMAR cooperates closely with the University of Kiel in the education of future marine scientists and operates four research vessels. TU Delft has been providing technical education for over 165 years. The university collaborates with a large number of other educational and research institutes within the Netherlands and abroad and has a reputation for high-quality teaching and research. Its resource engineering department includes mining, mineral and environmental geotechnical engineering and has a strong and ongoing interest in all aspects with of deep sea mineral extraction, specifically via the following activities: • Variety of MSc thesis projects in collaboration with industry player and forefront developer IHC; • Participation in the EU funded “Blue Mining’ multi-disciplinary, multi – national R&D project; • PhD project on deep sea mining in collaboration with IHC; and, • Internships (with a view to future Master’s thesis projects) in collaboration with offshore supply

company Allseas. Seascape Consultants provides solutions and high-level advice to the offshore sector including industry, policymakers and regulatory bodies. In the past 12 months Seascape Consultants have carried out work for the International Seabed Authority, CBD, OSPAR, UNESCO, European Science Foundation (Marine Board) and has been a consultant for pipeline route surveys in the oil industry (Intecsea and South Stream). Seascape Consultants was recently awarded a grant from the EC DG Research to investigate environmental issues related to deep sea mining (MIDAS – Managing Impacts of Deep sea resource extraction) and has also recently been awarded a contract from DG MARE to run the secretariat for EMODNET. In this study Seascape Consultants will work together with the National Oceanography Centre in Southampton as well as Deep Seas Environmental Solutions Ltd (DSES). DSES provides independent advice to the International Seabed Authority (ISA) through participation in its expert advisory body, the Legal and Technical Commission (LTC).

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3.3 Principles behind our approach

Ecorys and its partners have wide-ranging experience in supporting EU policy-making as well as in providing geographic and sector analysis. The project team combines expertise and experience in applying EU guidelines on policy assessment with sector specific knowledge and skills. We recognise that the field of deep sea mining requires specific knowledge in relation to the specific character of the sector as well as of the geographic regions where its potential is found. We are therefore committed to the following principles in our work: 1. Interactive working: results and key findings of this analysis will be exchanges with the EC

counterparts to allow the Commission to build on insights gained and to allow the study team to make use of progress in the policy process considered at the EU side; hence we foresee close cooperation with our Commission counterpart;

2. Iterative; although the analysis process is technically organised in separate tasks, the findings of some tasks will feed into other tasks and vice versa. Hence we identify the need to go back to previous steps and to review problems and definitions in light of emerging findings;

3. Independence; we will carry out the research in an independent manner; all data and findings reported on will be traceable and defendable;

4. Solution-oriented: we are keen to support and advise DG MARE on possible directions and strategies to consider and will do our very best to be ‘part of the solution’; and

5. Future-oriented: Many of the Blue Growth sectors have a future oriented notion, being at a stage of development and notably this holds for deep sea mining. Hence our approach aims at gaining insights in trends, drivers and factors of uncertainty that may influence future developments. Where necessary lessons from past experiences, in deep sea mining, but notably in other sectors. In contrast to analyses conducted for other sectors, we propose not to set a future time horizon but rather use the analysis itself to establish views on reasonable time lines of development.

Throughout our analysis we intend to draw on the findings of earlier reports, publications and other literature, as well as to gather information from stakeholders through international workshops and interviews.

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4 Elaboration of activities

4.1 Task 0: Study Inception

Aim The inception phase is aimed at specifying the methodology used, detailing the timeline and defining the specific contents of the deliverables of the study. Specific aspects of the study such as elements of the legal analyses, access to information on on-going projects and identification of experts and stakeholders to be invited for the workshops are also foreseen to be assessed. Approach A kick-off meeting will be held in Brussels within four weeks of signing the contract. The kick-off meeting will be invaluable to discuss the key goals of the study, to confirm our approach and to identify information sources within the Commission and industry. Questions to be clarified will include the tasks of mapping of seabed activities as well as the level of assessment of on-going exploration projects. Subsequently, we would propose the following activities to take place in the meeting: • Present our proposed work plan; • Identify key staff within the Commission (DG MARE, DG Enterprise and any other DGs, as

appropriate) whom the project team will need to consult, particularly with regards to the legal analysis;

• Discuss the scope of environmental assessment with special focus on the comparison with land-based impacts; and

• Identify specific aspects of the project website and other dissemination tools. It will also be important to address and agree the nature of the questionnaire to be submitted within two months following contract signature as well as some specific details of the proposed workshops. The meeting will also provide an opportunity to discuss the reporting deadlines and dates of future meetings. Following the kick off meeting an internal project meeting will be organised involving the experts and support staff. The aim of this meeting will be to: • Discuss in more detail the methodology used in the tasks; • Address interdependencies between tasks and agreements on formats of data to be transferred

between tasks, as well as the exchange of intermediary analysis findings; • Identify project risks and develop mitigation mechanisms; • Agree on internal deadlines; and • Discuss the upcoming meeting and workshop schedule. From a project management perspective, in the inception phase, specific attention will be paid to knowledge management, project risks identification and project planning. Activities This phase consists of the following activities: • Kick-off meeting • Inception report (including a work plan)

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Expertise and team involved The tasks under the inception phase will be undertaken by the core team who have an oversight on project delivery, task allocation and timeline. The overall methodology put forth in the inception report and the work plan will be elaborated as part of the inception phase in collaboration with the experts of the specific thematic fields of geological survey, legal, environment and mining engineering.

Team member Activity Connection to other task

Roelof-Jan Molemaker Project team leader, assessment

of key issues and milestones

Project management and business

stream leader

Johan Gille Drafting of the workplan and the

inception report

Project management and

Technology analysis task leader

Steve Hodgson Presenting approach to legal

aspects

Legal analysis stream leader

4.2 Business stream

4.2.1 Task 1: Technology Analysis Aim The aim of the technology analysis task is to identify and describe the value chain of deep sea mining from extraction to refining. The value chain analysis will take into consideration separate options for processing, and include both land and sea-based processing techniques. Activities The following activities will be carried out under task 1: 1. Literature review 2. Development of at least four value chain concepts 3. Description of the proposed value chains and technology

a. Identify technologies used and who provides them; b. Assess differences from land-based technologies c. Identify which technologies require further development and how they should be prioritised d. Identify the existence of skills base in Europe for the manufacturing of the applications

necessary for mining as well as for their operation 4. Preliminary technology analysis, including assessment of technology gaps, added value to EU

economy (e.g. job creation) 5. Submission of interim report 4 months after the contract has been signed; and, 6. Organisation of a workshop to present the interim report Approach The methodology for Task 1 will commence with a literature review and an assessment of expert opinions of the technology currently available for deep sea mining. Following on from the assessment of published information at least four comprehensive value chain concepts will be developed which will include both on and off-shore processing using e.g. the continuous line bucket system and hydraulic suction. Literature review The methodology for Task 1 will commence with a literature review and an assessment of expert opinions of the technologies that are currently available for deep sea mining. As part of our literature review, we aim to assess where the relevant information lies, its availability (e.g. potential

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cost) and the main topics to address. An initial list of relevant literature, gathered in the process of preparing this proposal (which will be complemented as part of the task execution). Initial inventory of literature on technology

• Jones, G.R., Nautilus Minerals.

• IHS, Dredging and Port Construction, 2011

• DEME, 2011. The Next Frontier.

• Naval Postgraduate School, 2011. SMART Underwater Robot application and mining.

• EC, 2010. EU Research Projects – Deep Sea and Sub-seafloor Frontier.

• Petersen, S., 2011. Modern Seafloor Massive Sulfide Deposits: Challenges and Opportunities. IFM-

GEOMAR, Presentation to Marine Geosciences and Geotechnology Santos, February 14.-16. 2011.

• Ecorys/Deltares/Oceanic, 2012. Blue Growth: Scenarios and Drivers for Sustainable Growth from the

Oceans, Seas and Coasts – marine subfunction profile report.

• Kiel Institute for the World Economy, 2011. Metalliferous Sediments in the Atlantis II Deep – Assessing the

Geological and Economic Resource Potential and Legal Constraints.

• Southhampton University, 2012. Sustainable seabed mining.

• Porter Hoagland, Stace Beaulieu, Maurice A.Tivey, Roderick G.Eggert, Christopher German, Lyle Glowka,

Jian Lin, 2009. Deep sea mining of seafloor massive sulphides. Precautionary management of deep sea

mining.

• Virtual Reality Research of Ocean Poly-metallic Nodule Mining Based on COMRA’s Mining System.

• Deep sea Mining is Coming: Assessing the Potential Impacts. MIT.

• Bertram, Christine., Anna Krätschell, Killian O’Brien, Warner Brückmann, Alexander Proelss, Katrin

Rehdanz (2011) Metalliferous Sediments in the Atlantis II Deep – Assessing the Geological and Economic

Resource Potential and Legal Constraints. Kiel Working Paper No. 1688 | March 2011

• Birney, Kirsten., Amber Griffin, Jonathan Gwiazada, Johnny Kefauver, Takehiko Nagai, Douglas Varchol

(2006) Potential Deep sea Mining of Seafloor Massive Sulfides: A Case Study in Papua New Guinea.

Donald Bren School of Environmental Science & Management. Final group report from MESM

• BGS (2010) European Mineral Statistics 2004-08: A product of the World Mineral Statistics Database.

British Geological Survey 2010

• Glasby, G. P. (2000) Lessons Learned from Deep sea Mining. Science 28. Vol. 289. No.5479.

• EC (2011) Tackling the challenges in commodity markets and on raw materials. COM(2011) 25 Final.

• EC (2010) Critical raw materials for the EU: Report of the Ad-hoc Working Group on defining critical raw

materials. Version of 30 July 2010. DG Enterprise.

• EC (2007) The deep sea frontier: Science challenges for a sustainable future. DG Research.

• Halfar, Jochen, and Fujita, Rodney M., (2002) Precautionary management of deep sea mining. Marine

Policy, v. 26, 2, p. 103-106

• Horst U. Oebius, Hermann J. Becker, Susanne Rolinski, Jacek A. Jankowski (2001) Parameterization and

evaluation of marine environmental impacts produced by deep sea manganese nodule mining. Deep sea

Research II 48 (2001) 3453–3467

• ISA (2011) The Russian Federation Applies For Approval Of Plan Of Work For Exploration For Polymetallic

Sulphides. International Seabed Authority.

• ISA (2011b) Seabed council approves four applications exploratory contracts with authority in the deep

seabed area. ISA Press release from the 17th session of the ISA, 19 July 2011, SB/17/11

• ISA (2010a) COMRA Applies For Approval Of Plan Of Work For Exploration For Polymetallic Sulphides.

International Seabed Authority.

• ISA (2010b) Seabed Authority Concludes 16th Session; Adapts Draft Regulations On Polymetallic

Sulphides And Elects New Council Members. International Seabed Authority.

• ISA (2006a) Polymetallic nodules.

• ISA (2006b) Polymetallic sulphurs.

• ISA (2006c) Mining techniques.

• ISA (2004) Marine mineral resources: Scientific advances and economic perspectives. International Seabed

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Authority, United Nations Division for Ocean Affairs and the Law of the Sea, and Office of Legal Affairs.

• Jarowinsky, Michael (2009) Studie mit dem eines aktionsplans fur den bereich marine mineralische

rohstoffe. July 2010.

• Jones, Nicola (2011) Sea holds treasure trove of rare-earth elements. Published online 3 July 2011, Nature.

• Kato et al (2011) Deep sea mud in the Pacific Ocean as a potential resource for rare-earth elements. Nature

Geoscience: Letters, NGEO 1185

• Kojima, Kazuhiro (1999) Report on the cobalt-rich manganese crust resources in the waters of the federate

states of Micronesia. SOPAC Technical report 94. August 1999

• Maribus (2010) World Ocean Review 2010: Living with the oceans. Published by Maribus in cooperation

with Kiel Marine Sciences, International Oceans Institute, and mare.

• Merlo, J.L. (1964) The mineral resources in the sea. Elsevier Publishing Company, Amsterdam

• Petersen, S. (2011) Modern Seafloor Massive Sulfide Deposits: Challenges and Opportunities. IFM-

GEOMAR, Presentation to Marine Geosciences and Geotechnology Santos, February 14.-16. 2011.

• Reuters (2011) Nautilus Forms Strategic Partnership and Secures Vessel. Press release 13 April 2011 from

Nautilus Minerals Inc.

• OceanflORE (2011) http://www.oceanflore.com/

• Scott, S. et al (2008) Mineral Deposits in the Sea: Second Report of the ECOR Panel on Marine Mining

(September 2008).

• Thakur, Anrika (2011) Nautilus Minerals to get ship for offshore copper mine ops; shares up. Reuters. 14

April 2011.

• U.S. Congress, Office of Technology Assessment (1987) Marine Minerals: Exploring Our New Ocean

Frontier, OTA-O-342, Washington, DC: U.S. Government Printing Office, July 1987

• Van Dover, Cindy Lee (2011) Mining seafloor massive sulphides and biodiversity: what is at risk? ICES

Journal of Marine Science (2011), 68(2), 341–348.

• World Oceanic Review, 2010. Marine minerals and energy..

It is noted that information on technology state of play and ongoing research and development is found mainly at two categories of sources: scientific research (universities, including through work funded by the EU FP) and industry players, with also cooperation models between the two. To some extent industry may consider their data confidential, though several large players appear very active in marketing their technologies and have shown willingness to share information and data already in the Blue Growth study and through other platforms. As there may be industry bias in data gathered on stages of development (and associated costs, necessary in task 2), our scientific partners from TU Delft will assist in judging the information and providing views over realistic levels of development and outlooks on trends therein. Value chain Based on our preliminary findings within the context of the 2012 Blue Growth study9 it is our understanding that the value chain of deep sea mining can consist of 4 main steps, as illustrated in the figure below.

Figure 4.1: Value chain for seabed mining as per the 2012 Blue Growth study

9 Ecorys et al (2012): Blue Growth Final report, available at https://webgate.ec.europa.eu/maritimeforum/system/files/Blue%20Growth%20Final%20Report%2013082012.pdf

21


http://www.oceanflore.com/

Source: Based on Birney et al. (2006)

Briefly, our understanding is that each value chain of DSM consists of four main steps: 1. Exploration phase: different techniques for locating and testing ore content and quality is carried

out through locating, sampling and drilling; 2. Demonstration phase: small-scale extraction is initiated, and technologies tested; 3. Extraction phase: Remotely Operated underwater Vehicles (ROVs), cutters and risers are used

to carry the ore from the bottom up to the surface; 4. Transportation phase: shipping and ship-building is the main focus; and, 5. Processing phase: the extraction of minerals in processing plants is carried out. Here also the

site location plays a key role. As a baseline, our understanding of these steps is described in the box below.

Box: Our understanding of the value chain

Exploration In the exploration phase, different techniques are used to locate mineral deposits. To find manganese nodules multi-beam echo sounders (side-sonars) this enables near real time “reading” of bottom strips.10 The strips are assembled with GPS to create an aggregate picture. Side-sonar is complemented with deep-tow sonars which are pulled along the deep sea to collect samples and pictures. Extraction To date, no excavation of solid minerals has taken place beyond 200 meters below sea-surface.11 Samples of nodules, polymetallic sulphurs, and rare earth minerals are taken at depths from 2000 – 5500 m. Clearly, the technical challenge of carrying out large-scale mining operations at those depths presents real challenges. A key technology is the Remotely Operated Vehicles (ROVs) which has been used to dig trenches for cables on the sea-floor, which are expected to cut and lift pieces of the mineral deposits. The sludge then needs to be vacuumed and pumped up to carriers at the surface. The main difference from the earlier versions of ROVs used at depth of 500 meter or less in oil and gas exploration, is that the mineral deposits are positioned at 2000-5500 m depth.12 Transport Transport of possibly thousands of tonnes of ore to processing plants will be crucial in deep sea mining, in particular when deposits on international waters are explored. Hayden (2004), for example, argues that price for shipping will be a key condition for where mining activities will first take place. The only known vessel under construction to cater to the specific needs of

10 ISA (2006a) Polymetallic nodules. Available at http://www.isa.org.jm/files/documents/EN/Brochures/ENG7.pdf

11 ISA (2006a) Polymetallic nodules. Available at http://www.isa.org.jm/files/documents/EN/Brochures/ENG7.pdf

12 McLeod, Jodie (2008) New Frontier Mining Under the Sea. Mining-technology.com, 26 Nov 2008. Available at http://www.mining-technology.com/features/feature46357/

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http://www.isa.org.jm/files/documents/EN/Brochures/ENG7.pdf


http://www.mining-technology.com/features/feature46357/

deep sea mining is built by the Kiel-based ship-yard Harren and Partners in Germany.13 At €127 million, the vessel constitutes a major budget post in deep sea mining ventures. Processing Due to the large quantities of ore, processing will take place on-shore.14 Several techniques for processing manganese nodules have been suggested. In general two techniques have been tested: hydrometallurgy, where the metals are separated with acids (hydrochloric or sulphuric) or basic reagents (ammonia), and smelting.15

Variation in the value chain, as found in literature, encompass • Onshore processing; • Offshore processing; • Continuous line bucket system (this may include hydrodynamic separation); • Hydraulic suction; and • Surface harvesting systems (for nodules). We will draw on the findings of the Blue Growth study and of available literature and examine the suitability and relevance of the value chain variations identified. As described by the Blue Growth study core maritime activities are surrounded by both upstream and downstream processes. Upstream of the value chain are suppliers of equipment and resources, who may also have their suppliers. Downstream are processing sectors and subsequently distribution and sales. This is important since large parts of the economic activities take place not in core sectors themselves, but in adjacent economic activities.16 In addition to the four components in the above graph, relevant other inputs include research, particularly at the exploratory side concerning technologies and environmental impacts. At the other side of the operational cycle factors like decommissioning and reshaping the underwater landscape could be considered. Technology description For each link in each value chain that we have identified, the following sub-tasks will be conducted: • Assessment of technologies currently used and available, including comparison (where

possible) with land-based mining techniques; • Identification of companies developing and providing these available technologies; • Identification of which technologies require further development, i.e. assessing the stages of

development of various available technologies; • Prioritisation of technologies requiring further development. A priority list will be set, based on

criteria including economic, environmental and social aspects; and, • Identification of skill requirements for the manufacturing of DSM technologies in the EU. Technology analysis Strengths and weaknesses of all identified technologies will be analysed within the broader context of EU policy. Some of the most important factors to analyse include the following: • Job-creation potential of DSM technology;

13 Hayden, David (2004) Exploration for and Pre-feasibility of mining Polymetallic Sulphides - a commercial case study. David Haydon, Nautilus Minerals Ltd. ISA Workshop presentation 2004.

14 Hayden, David (2004) Exploration for and Pre-feasibility of mining Polymetallic Sulphides - a commercial case study. David Haydon, Nautilus Minerals Ltd. ISA Workshop presentation 2004.

15 ISA (2006a) Polymetallic nodules. Available at http://www.isa.org.jm/files/documents/EN/Brochures/ENG7.pdf.

16 ibid

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• Added value of DSM technology development to the EU economy (including a discussion of

costs of the technology); • Existing gaps in the development of DSM technology and how the EU’s role can be advanced

(e.g. to fill these gaps); • Priorities of the EU at the moment in terms of technological innovation generally, and

specifically concerning DSM; • Identify the market situation by assessing the most important researchers (e.g. corporate,

public-sector, academic, etc.); and, • Identify and analyse the patent situation. The preliminary findings of this task will be summarised as part of the interim report which will be submitted four months following contract signature. Findings of the interim report and further analysis will be discussed at the workshop which is expected to be organised within one month following the submission of the interim report. International workshop Industrial and scientific expertise will be critical for the effective execution of our workshop. Therefore, the workshop aims to invite the best accessible commercial, academic and public sector stakeholders involved in seabed mining research and activities. Altogether approximately 25-30 stakeholders are expected to be invited to a one-day workshop in Brussels. A draft list of potential experts has already been developed and will be further elaborated as part of the inception phase. A brief description of the workshop is presented in the box below.

Box 4.1: Technology workshop Building on the available science and industry network that our partners in this assignment bring along, we aim to draw in renowned experts from science as well as industry in mining technology both in relation to land-based as well as seabed mining. We present our findings as in the interim report and will seek to address any concerns or questions including gaps in data. Furthermore, we are aiming to discuss a wider set of issues related to technology such as legislations, research and development, access to skilled labour etc. The workshop will also present case studies of particular technologies as used in practice and will seek to address concerns and obstacles. Initial findings of the economic and environmental tasks that relate to technology aspects will also be drawn into the workshop agenda.

Our consortium has access to a large external network of industrial and scientific expertise. Some of these experts, and their affiliate organisations, are listed in the table below. The value added of this network is particularly relevant for the organisation of the workshop, whereby we would have the opportunity to tap into our additional industrial and scientific expertise to provide views to improve our value chain analysis. Output 1) Description of value chain from extraction to refining 2) Preliminary analysis of technology as part of the interim report 3) International workshop 4) Full analysis of technology in the final report

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Expertise Task 2 will be carried out under the management of task leader Johan Gille, who will be assisted by a team of experts representing both in-house Ecorys personnel as well as specialists from TU Delft. The task team is presented in the table below. The project team will involve participation from the overall team leader whose involvement will assure a close collaboration between this task and the economic analysis task team and serve the purpose of effective information sharing.

Team member Activity Connection to other tasks

Johan Gille (task leader) Value chain assessment Team member of the economic

analysis task

Jorg Benndorf (TU Delft) Mining technologies (landbased vs sea) Team member in the economic

analysis task

Mike Buxton (TU Delft) Seabed mining technologies; costing

estimates

Team member in the economic

analysis task

Loic Blanchard Assessment of literature, interviews EU

activities

Team member projects analysis

Joey van Elswijk/ Sanne de

Boer

Technology inventory, cost analysis

and value chain assessment support

Roelof-Jan Molemaker Exchange/input from economic analysis

task

Team leader & Task leader for the

economic analysis

Ecorys events team Workshop organisation Environmental analysis

External experts Specialist inputs on selected

technologies

4.2.2 Task 2: Economic Analysis Aim The economic analysis aims to present an overview on the economic viability – including associated costs and benefits- of possible deep sea mining projects (where this task will build on the inventory covered under task 5). Economic viability will be defined by a list of criteria that will reflect on the associated costs of extraction, the value of natural resources as well as the sustainability of conditions. Activities The activities under this task include: a) identifying and drawing up criteria to determine economic viability; b) producing a simple econometric model to assess the profitability of deep sea mining

operations; c) preparing three case studies (one for each type of mining) to assess possible future

consequences of commercial operations; d) indicating scenarios where seabed mining could become strategically important for Europe;

and e) contrasting the costs and economic implications of seabed mining with alternative methods for

obtaining the minerals including some variables of land-based mining and recycling. Approach The economic analysis will build upon the available literature as well as the integration of the information coming from the other tasks, including the technology assessment, geological analysis and the environmental analysis. At the same time this task might feed back to the other tasks in

25


determining what criteria might be assessed to establish economic viability. In addition interviews are foreseen with key stakeholders and experts. Criteria to determine economic feasibility The first step in the economic analysis is to determine the criteria that impact on the economic viability of deep sea mining. In effect this determines the structure of the econometric model, even though this may need to be simplified due to limitations in data availability or because certain criteria are intrinsically hard to model (e.g. commodity price volatility, geopolitical developments). Nevertheless these criteria are also important to identify as this will influence investment decisions. Use will be made of the value chain components as identified under task 1. The scheme shown on figure 4.2 depicts the main elements that are expected to determine the economic viability of deep sea mining. It also gives an impression on the sources of information that will be used to establish what are essential parameters and the approximate values for these parameters.

Figure 4.2: on sources for economic viability indicators

The structure follows the stages and processes that are relevant for deep sea mining, as shown also under Task 1, thus comprising the full value chain. In doing so we start by looking at a life cycle approach, not only including the mining and processing operation itself but also including the exploration stage and decommissioning stage. Whereas it is unclear at this moment whether decommissioning is important for deep sea mining, it is a considerable cost factor in land mining. In addition to the above factors, output parameters will be defined to measure the economic feasibility. Typical output parameters are rate of return, net present value and/or cost/benefit ratios. Various sources are being used for this. They include both an analysis of previous studies on the feasibility of deep sea mining but also direct input from the various other tasks in the study (e.g. technology costs).17

17 See for example Menard & Frazer (1978) Yamazaki (2008) Soreide et. Al. (2001); Andrews et al. (1983), Charles et al (1990), Egorov et al (2012)

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With regard to revenue, a separate analysis will be presented on the expected global demand for the various types of minerals (separately addressing the category of rare earth elements), the working of commodity markets and resulting prices for minerals and metals that are mined in the deep sea (see text box 4.2). This will not only address the resulting prices (including existing forecasts and historic volatility) but also create an understanding of the underlying drivers.

Box 4.2: The importance of commodity prices All earlier studies that have been done on the feasibility of (land) mining point at the importance of commodity prices. Metal and mineral prices are notoriously volatile and depend strongly on movements in supply and demand. Notwithstanding the price volatility of metals’ and minerals’ prices have shown a strong upward trend over the past decade. Demand for metals and minerals in turn are influenced strongly by underlying market conditions. For example manganese is mainly used in steel and iron production and is hence influenced by developments on these markets. Rare earth metals on the other hand are found in many high tech and electronic appliances including hybrid cars, displays and satellite systems or are used as catalysts in the car industry. Additionally, supply itself is obviously influencing the market. Innovation is a clear influencing factor as is political and economic stability of some production countries. Also deep sea mining itself might impact supply and price developments (provided it leads to high supply). Finally the market structure is of relevance. Not all goods are traded globally on an open market. Some markets, in particular the market for rare earth metals are open to speculation or geopolitical influences. In particular the role of China is important in this respect as it uses its dominant position on the rare earth metals market to influence its industrial policy, requiring foreign companies to move their factories to China.

Setting up an econometric model Based on the information available, a simple econometric model will be built, aimed at supporting the assessment of future mining operations. The final list of criteria will also feed into the parameters of the model. This model will be developed in a Microsoft Excel environment. It will be kept relatively simple to avoid a black box character and to determine the most important parameters. Where possible, separate components of the value chain will be modelled separately. Similar models have been developed by Ecorys in the past, for example to model the economic feasibility of seaweed production at sea for biofuel purposes. The following box gives a short description of the model.

Box 4.3: Draft description of the econometric model The econometric model will follow the general structure of the criteria developed and be constructed around the following elements: - Exogenous parameters. These are mainly related to prices of metal and minerals on the world market. But also specific parameters (e.g. related to transport costs) can be introduced here or costs of exploration or mining licenses. - Resources characteristics. Quantity, abundance, grade and composition of ores/nodules to be mined. - Location characteristics: water depth, topography, oceanographic conditions (including meteorological conditions, e.g. if there are conditions under which no mining activity can take place), distance to port/processing sites.

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- Phases: The three recognized stages in the life cycle of deep sea mining will be distinguished (exploration, mining, decommissioning) - Costs of key processes in each stage distinguished in capital (investment) costs and operation/maintenance costs. They might distinguish between the 3 different types of mining operations (polymetallic nodules, polymetallic sulphides and cobalt-rich crusts) as different technologies and characteristics apply. Key processes within the mining phase are: (a) Collection; (b) Vertical lift; (c) (pre)processing; (d) Transportation; and, (e) Metallurgical processing. - General characteristics of mining operations e.g. duration, economic life of equipment. - Output parameters: rate of return, cost/benefit ratios. The model will be developed in such a way that the user can vary specific inputs in a “cockpit module”, e.g. where s/he can assess the implication of changes in cost components or external factors to the project feasibility. An example of this is the estimate of the development of technology costs, which could go down when experience is being gained and the sector is maturing. Other variables that can be used for sensitivity testing are factors like energy and commodity prices, or environmental mitigation costs.

The econometric model, once validated in the case studies, will also be used in the determination of a map layer on economic viability. The output parameters in these map layers will be expressed in a simple colour coding scheme indicating the economic viability potential (no hard indicators can be provided as this will be also determined by exogenous parameters, in particular commodity prices). Case Studies Once the functioning parameters of the model have been established and agreed upon with the Commission services, three case studies will be prepared – for all three main mining operation types – to establish possible scenarios for future large-scale mining operations. The location of the case studies (where mining takes place) will closely follow trends that can be observed in currently existing license and prospective license areas. In these case studies the economic feasibility will be calculated under three different commodity price scenarios, which will be based on existing commodity price forecasts. Based on this various additional sensitivity and break-even analysis can be applied determining the necessary conditions for the commercial viability of deep sea mining operations. These break-even analyses can be applied on all elements of the econometric model as indicated above, and can also be used to determine the most critical parameters. Specific break-even analyses will be carried out on resource characteristics and commodity prices. Comparative Analyses To assess the comparative economic feasibility of deep sea mining vis-á-vis alternative methods for obtaining metals and minerals, a high level comparison will be made with recycling techniques and land-based mining techniques. A similar life cycle cost approach over the whole value chain will be used as for deep sea mining. In addition, attention is paid to potential reserves and supply characteristics of other technologies. Other strategic considerations The final part of this task is a description of considerations other than economic that might influence decisions to become involved in seabed mining. Typical aspects to be included in this analysis are:

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• Security of supply; • Diversification of supply; • Safeguarding key enabling technologies; • Protecting critical sectors and infrastructure; • Stockpiling; • Long term reserve planning (securing future opportunities); • Risk moderation (on supply); and • Geopolitical considerations. Output 1) Determining criteria for the economic viability of projects including strategic scenarios and

alternative methods; 2) Econometric model on profitability; and 3) Three case studies assessing impacts of commercial scale activities. Expertise Task 2 will be carried out under the management of the team leader Roelof-Jan Molemaker, who will be assisted by a team of experts representing both in-house Ecorys personnel as well as specialists from GEOMAR at the Helmholtz-Zentrum für Ozeanforschung in Kiel, Germany. The task team is presented in the table below.


Roelof-Jan Molemaker (task

leader)

Cost assessment, criteria setting

and feasibility

Overall team leader/Public

consultation task leader

Jorg Benndorf / Mike Buxton (TU

Delft)

Costing of mining chain &

processing

Phil Weaver (Seascape

consultants) Costing of DSM technology

Johan Gille Transport/shipping expertise.

Transport costing, Task leader Technology analysis

Jan Maarten de Vet Case study design, link to projects Task leader projects analysis

Eszter Kantor Environmental & geology aspects Liaison to environmental task

Elaine Baker (GRID) Environmental costing Task leader environmental

analysis

Jip Lenstra Economic model design

Paul Baker Input-output analysis, Market and

pricing developments

Gerbrand van Bork Finance analyst; financial feasibility

& financial risk assessment

Andreas Pauer/Federica

Gerber/Joey van Elswijk Team member- support staff Team members of public

consultation; technology analysis.

4.2.3 Task 5: Project Analysis Aim The aim of Task 5 is to identify all relevant projects related to seabed mining currently on-going or in the planning phases. Activities assessed will include exploration, extraction, processing and related transport activities, as shown in the value chain presented under task 1. While the specification calls for the inclusion of all shallow mineral mining operations including those that are in the planning phase, we suggest including only those shallow water operations that

29


are related to polymetallic nodules, polymetallic sulphides or cobalt-rich crusts (such as gold or diamond) and exclude aggregates mining. Activities Activities carried out under this task include: a) Overview of global deep sea mining operations including exploration, extraction, processing

and transport activities as well as shallow mining operation related to the three main types of minerals. Specific activities include:

- Identification of consortia members for all projects and description of their contribution using the value chain analysis defined under task 1;

- Reporting on the progress- to-date of the projects identified ; - Listing possible obstacles by the projects (as available through information exchange and

literature sources); - Identification of public and private financing (lending and equity); and - Indicating whether the project relate to EEZs or ABNJ.

b) Summarising for all nations identified as supporting or hosting deep sea mining projects, their involvement (including countries outside of the EU (as available through information exchange and published sources)

c) Mapping deep sea mining activities worldwide and delivering them in a format suitable for inclusion in the EMODnet portal and for public viewing (mapping methodology will be aligned with mapping of geological and environmental factors, see task 4)

Please note that some of the information requested under this task might be considered confidential (especially in the case of third country involvement such as China or Russia). We will do our very best to access information through published and unpublished sources using literature review and interviews. However, it is likely that not all information will be made available through these channels.

Approach The project analysis will rely heavily on information sourced through published literature, interviews and email/telephone exchanges with relevant stakeholders. Some information might also be available in news sources and study reports. We will seek to identify industry project teams (EU and other projects) and private enterprises to gather information on on-going projects including those that are currently being planned. We will mobilise the extensive network of our project team to identify the key stakeholders and initiate direct contact with them via email. We are planning to hold one-to-one interviews as well as focus group meetings at the time of the international workshop or on alternative dates (depending on the availability of key stakeholders). We realise that some of the information on on-going projects might be deemed confidential, therefore we expect possible limitations to the extent of information that might be accessible for example with regard to project financing. The project analysis is expected to result in a project fiche a 5-10 page description of a selected set of main projects (on-going and planned), including the following details: • Project description including location (EEZ or ABNJ); • Project leader; • Project members; • Project timeline- progress to date; • Possible obstacles encountered; and • Sources of financing.

30


Regarding information on projects organised by countries external to the EU, we offer to compile a joint country fiche where information might be more difficult to obtain. To conclude each of the project fiches, and based on the number of licences granted, we will identify how full scale mining activities would impact the price of metal, the competitiveness of companies and access to resources. Results will feed back into the economic analysis of Task 2. Information from the legal analysis of Task 3 is expected to provide a contextual background on the regulative elements and reporting and other requirements that might be imposed on the projects identified. Output 1) Overview of stakeholder involvement in worldwide seabed mining – project fiches; 2) Summary of third country involvement (particular attention to Brazil, India, China, Korea,

Australia); and 3) Mapping of seabed mining activities worldwide and delivering in a suitable format for inclusion

into EMODnet (aligned with mapping work under task 4). Expertise Task 5 will be carried out under the management of Jan Maarten de Vet, who will be supported by a team of internal experts. The involvement of Johan Gille, task leader of the technology analysis will ensure the necessary information exchange particularly in relation to the detailed description of consortia activities of on-going projects.


Jan Maarten de Vet (task leader) Assessment of literature,

interviews EU activities Legal analysis team member

Loic Blanchard Assessment of literature,

interviews EU activities

Johan Gille Review of technologies applied Task leader Technology analysis

Martin Wegele Stakeholder interviews

Marjan van Schijndel Project feasibility calculations Economic analysis team member

Jakub Gloser /Federica Gerber Assessment of third country

involvement Economic analysis team member

4.2.4 Task 7: Preparing the public consultation and website Aim The public consultation process is an essential element for gathering data as well as stakeholder perspectives on the potential benefits as well as the concerns associated to deep sea mining. Our proposed public consultation aims to collect information from wide network of stakeholders on some of the key questions. The aim is to provide information such that the Commission may to gain insight into the development of the sector in order to identify its impacts and associated costs and benefits for relevant stakeholders. Activities The following activities will be carried out under Task 7: a) Preparation of a questionnaire for public consultation;

31


b) Informing stakeholders at regional and national level; c) Mobilising stakeholders; d) Preparation of a draft consultation paper; and e) Setting up website using the maritime forum , supporting the dissemination of information about

the project and inviting feedback. Approach A questionnaire with a maximum of 20 questions – in addition to basic information questions – will be compiled to address stakeholders involved or affected by deep sea mining. The questionnaires will be structured in such a way as to derive the information most relevant to stakeholders` perspectives and involvement. The public consultation will take into consideration both national and EU level perspectives, as well as environmental and sustainability concerns that might arise in connection with deep sea mining activities. The questionnaire will contain a mix of open-ended and closed-ended questions including multiple choice. A draft of the questionnaire will be submitted for approval to the Commission and the final version will take into account any comments made and clarifications requested. Coinciding with the draft questionnaires, a draft consultation paper will also be submitted to the Commission. This consultation paper will serve as background note providing transparency and to the public consultation. The consultation paper is likely to include the following chapters: • Reasons for publication; • Background; • Scope; • Timing; and • Questions. The consultation paper aims to support the questionnaires and is intended to be used on the site of the European Commission to explain stakeholders the conceptual framework of the impact assessment and the aim of the information collection procedure. In order optimise dissemination direct contact will be initiated with the stakeholders via email. The email will provide further information regarding the purpose of the consultation and contain a direct link to the consultation webpage. Prior to contacting stakeholders, a list of relevant institutes and persons will be drafted, building on the network of the various project partners as well as the contacts obtained during the execution of other tasks. A draft list will be submitted to the Commission to complement before actually contacting these stakeholders. Where necessary and possible, a categorisation of stakeholders will be included. Output 1) Draft questionnaire 2) Draft emails to stakeholders (for consistency); and 3) Draft consultation paper Expertise Task 7 will be carried out under the management of the Roelof-Jan Molemaker, the overall Team leader who will have the widest oversight on the development of the individual projects. He will be supported by deputy team leader, Johan Gille who also serves as team leader of the technology analysis task. The setting up of the project website will be carried out by Ecorys support experts.

32


Support staff selected for this task is also involved in the aforementioned two assignments thereby assuring that preliminary findings of the technical and economical tasks - both of which will start simultaneously following contract signature - will be taken into consideration during the compilation of the questionnaires.


Roelof-Jan Molemaker (task

leader)

Drafting questionnaire and

consultation paper

Team leader and Economic

analysis task leader

Martin Wegele Mobilisation and dissemination of

information (including website)

Projects analysis team member

Sanne de Boer Supporting the drafting of the

questionnaire

Technology analysis team member

Jakub Gloser Supporting mobilisation and

dissemination work

Economic analysis team member

Marjan van Schijndel Consultation reviewer Economics and projects analysis

task member

4.3 Legal stream: task 3: Legal Analysis

Aim The aim of Task 3 is to provide a description of the relevant legal framework at international, EU level and national levels relevant to the exploration and exploitation of deep sea minerals. The analysis will compare significant similarities and differences in the different regimes thereby contributing to a better understanding of the legal challenges faced by the sector as well as the needed policy development at the appropriate level. Technological as well as environmental regulatory elements will be taken into consideration during the analysis which will take into account all three main types of deep sea mining. Activities The following activities are carried out under Task 3: a) The description of the national, EU and international legal framework governing deep sea

mineral exploration and exploitation including environmental impact assessments b) The assessment of the relevance of the EU environmental acquis for the identified legislative

acts - Taking into consideration exclusive economic zones (EEZs) and continental

shelves within the EU - EEZs of overseas countries and territories (OCTs) - EEZs of at least 5 other countries in which mining activity is already taking place

or the results of underwater surveys have been promising - The ABNJ

c) Assessment of significant similarities and differences in the different regimes d) Preliminary analysis is provided after 4 months in an interim report. Approach The methodology of Task 3 for will be based primarily on an analytical review of the relevant legal instruments together with published articles and relevant reports. A limited number of interviews will be conducted in person or by telephone. Targets for interviews include the International Seabed

33


Authority as well as relevant services within the European Commission (including DG MARE and DG ENV) and other non-governmental stakeholders. The approach to this task will follow the applicable normative hierarchy with a review of the position under international law, EU law and then national legislation. The legal analysis will comprise of an assessment of all the relevant policies and regulatory practices that are perceived to have an impact (direct or indirect) on the sector of deep sea mining. In terms of international law the analysis will include an analysis of the relevant provisions of the United Nations Convention on the Law of the Sea (‘UNCLOS’), the Agreement relating to the Implementation of Part XI of the UNCLOS of 10 December 1982, as well as the Mining Code that relate explicitly to deep sea mining. We will also analyse relevant provisions on maritime zoning and the protection of the marine environment. Remaining at the level of international law, we will also consider other relevant instruments, including those relating to the protection of the marine environment, such as the Convention on Biological Diversity (CBD). We will also consider ongoing moves to protect the marine environment in areas beyond national jurisdiction including as relevant the activities of regional seas conventions such as OSPAR, relevant instruments concluded within the auspices of the International Maritime Organisation relating to navigation as well as legal regime for waste disposal at sea. As part of the analysis, we will consider the rights and duties of states in areas both within (continental shelf/EEZ) and beyond national jurisdiction. We will also assess customary international law as relevant given that not all States are party to UNCLOS including certain States that are involved in deep sea mining activities. In terms of the analysis of EU policy it is anticipated that we will focus primarily on environmental legislation including both horizontal instruments (relating for example to environmental impact assessment) and the conservation of biodiversity (such as the Habitats Directive and Marine Strategy Framework Directive) since, for example, the more specific Mining Wastes Directive does not apply to offshore activities. With regard to the evaluation of national legislation in terms of the EU Member States we propose to focus on those that have continental shelf or EEZ claims that are capable of supporting deep sea mining or which have experience in this sector. To this end, we propose to focus on France, Germany, Greece, Spain, Portugal, Italy, and the United Kingdom. Similar comments apply with regard the Overseas Countries and Territories: at this stage we proposed to examine France and Denmark (in the context of Greenland). We stress that a finalised list of countries will provided at the inception stage. With regard to third countries, we propose to examine the relevant national legislation of Canada, China, Fiji, Japan, Papua New Guinea and the United States of America. In each case we will analyse national legislation applicable to deep sea mining in areas within and beyond the relevant jurisdiction. To gather and analyse the necessary information we will make use of a team of correspondents working from a common checklist. Some data may be obtained from the ISA National Legislation Database. The table below presents a preliminary overview of the international level regulatory elements and practices that would be included in the analysis.

Table 4.1: Preliminary list of regulative elements and practices to address within the legal analysis Regulatory Body Regulative elements and practices to review

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Regulatory Body Regulative elements and practices to review

United Nations Convention on the law of the sea

International Seabed Authority Granting of exploration and exploitation licenses in high seas

International Maritime Tribunal Jurisdiction over all disputes concerning the interpretation and

application of boundaries and obligations

International Maritime

Organisation

International Convention for the Safety of Life at Sea

International Convention for the Prevention of Pollution of the Sea by Oil

United Nations Environmental

Programme Convention on Biological Diversity

United Nations United Nations General Assembly Resolutions

Findings of the regulatory review are expected to feed into the eventual impact assessment process by identifying possible barriers and by describing the current scenario. Output 1) Preliminary assessment of legal framework relevant for deep sea mining in the interim report;

and 2) Full assessment of the legal framework in the final report. Expertise Task 3 will be carried out under the management of the Steve Hodgson representing MRAG, who will be assisted by Andrew Serdy as legal reviewer from the Institute of Maritime Law of the University of Southampton as well as a team of internal experts including Jan Maarten de Vet, whose participation is meant to assure effective information exchange between the project and the legal analysis teams.


Steve Hodgson (task leader) Legal analysis, policy review EU

and international law

Report feeding in the

environmental analysis

Andrew Serdy External expert- legal review, UK

Linette De Swart Support to legal analysis

Jan Maarten de Vet Feeding project-specific

information

Project analysis task leader

External experts Third country legal analysis

4.4 Environmental stream

4.4.1 Task 4: Geological Analysis Aim The aim of the geological analysis is to establish an overview of the geological features of the deep sea mineral deposits that have thus far been identified. The analysis aims to include a description of physical properties for abyssal plains, oceanic ridges and seamounts. The task aims to identify the variety of seabed types that contain deposits for the three main types of minerals. The analysis will also feature the visualisation of these deposits in the form of maps providing an overview by location, mineral type and current mining projects with economic viability (cost) estimations.

35


Activities The following activities are undertaken under Task 4: a) Comprehensive overview of world wide sites that have been subject to surveys for the three

main types of mining activities a. Including abyssal plains, oceanic ridges and seamounts; b. Indicating the availability of the surveys and the interoperability of the data;

b) Suggestions for prioritising future mapping and sampling efforts; c) Visualisation of findings by creating map layers showing;

a. Likely mineral deposits; b. Surveyed mineral deposits; c. Seabed mining projects; d. Economic viability of the projects (based on criteria identified under Task 2; and

d) Delivering the map in a form suitable for integration into the EMODnet and for public viewing. Approach The project will use published and unpublished survey reports as far as is accessible to the project team, as well as primary databases, scientific literature, and other sources to create a database and in a second step geo-referenced map libraries of deep sea mineral resources. The map libraries will include global and regional spatial geological data such as topography (predicted topography from satellite altimetry and ship-based bathymetry) as well sediment thickness and the age of the ocean crust. This data needs to be assembled from publicly available databases and forms the base layers in a uniform ArcGIS format as this information is crucial for the evaluation of the resource potential of selected regions and to predict prospective areas for new resource discoveries. Other layers will contain important geological information on structural features such as location of seamounts, fracture zones, spreading centres and will be compiled and digitized from scientific papers and/or updated from publicly available databases. The main part of the project will be the compilation of relevant data on the various known mineral occurrences based on scientific literature. This information will be incorporated into a database and will form a map layer with deposit-scale geological information including data on the location of the three types of mineral resources as well as geological information relevant for their economic potential such as their water depth, host rocks and the contained resources (type of metals, metal content, distribution, tonnage). The latter information will additionally be provided with metadata identifying the quality of the data, as this is of fundamental importance for any assessment of their resource potential. Non-geological information impacting resource potential will be made available through separate layers and will include environmental data (regional bio-geographical provinces from scientific databases and reports as well as the location of existing and proposed Marine Protected Areas; information gathered from public sources in Task 4) and juridical information such as the EEZ boundaries (public sources; e.g. VLIZ, version 7), proposed continental shelf extensions; existing exploration and mining licenses (gathered in Tasks 4 and 5). The final product of the geological analyses will be a series of kml-files providing deposit information for easy use and distribution.

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Box 4.4 Early indication on the process of mapping

Since this is a global and regional overview we would favour the use of an ArcGIS format for gathering the geological data with a later export of the resource information from a database into a scalable digital map base such as Google Earth. Metal tenor, grade and size could be made visible via color-coding and size of the symbols. Information provided would also include the type of surveys that have been done and the source of the original data, if known. Within Google Earth some data such as regional topography and the boundaries of EEZ’s are already available.

Output 1) Overview of sites subjected to geological surveys and relevant for deep sea mining; 2) Suggestions on future prioritising of sites for mapping and sampling; and 3) Map layers containing the geological coordinates of likely deposits, surveyed deposits and

projects (indicating their economic viability) produced in a format suitable for inclusion into EMODnet

Expertise The task wil be led by Sven Peterson (GEOMAR). Eszter Kantor will serve as Ecorys core team liaison taking responsibility for fulfilling reporting requirements and coordinating information exchange with other tasks. The implementation will be carried out an expert team representing GEOMAR, from the Helmholtz-Zentrum für Ozeanforschung Kiel as well as by a team of internal experts, whose participation is intended to ensure effective information exchange between the project and the legal analysis teams.


Sven Petersen

(GEOMAR) (task leader)

geological analyses and resource potential

Report feeding in to the environmental

analysis

Colin Devey (GEOMAR) volcanology, geological analyses -

Eszter Kantor compilation of data on minerals Core team liaison; team member


Tea Laurila (GEOMAR) compiling information and producing maps Mapping of environmental impacts (task 6)

John Jamieson

(GEOMAR)

compiling information and producing maps Mapping of environmental impacts (task 6)

Stefanie Kaiser/Verity

Nye (Seascape/NOC) Task support -

Jip Lenstra Task reviewer Economic analysis

4.4.2 Task 6: Environmental Analysis

Aim The aim of Task 6 is to provide the European Commission with a detailed assessment of the possible environmental implications of deep sea mining activities. These environmental impacts are analysed in the context of relevant legislative frameworks and thereby provide an overall assessment on possible barriers and further development. Activities The following activities are going to be carried out under Task 6:

a) Compiling existing information on environmental impacts of deep sea mining including - Review of relevant available literature

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- Creating an inventory of impacts on descriptor criteria and indicators (as per the

MSFD) related to pressure characteristics, (and if available) management and mitigation practices;

- Distinguishing between impacts common to all three types of deep sea mining (polymetallic nodules, polymetallic sulphides and cobalt-rich crusts) and specific ones;

- Where necessary distinguishing between pressures and associated impacts incurred during prospecting, exploration, extraction and processing phases;

- identifying gaps in current knowledge and creating an inventory of specific additional research needs;

b) proposing a roadmap towards sufficient assessment of impacts in order to define operational targets for good environmental status;

c) compile existing information on environmental monitoring techniques; - review literature; - create an inventory of existing methods; - identify shortfalls and create an inventory of additional research needs;

d) contrast and compare deep sea mining with land-based methods and recycling for the entire value chain

e) preliminary analysis of the activity will be reported in an interim report, which will be submitted 4 months after the signing of the contract

f) organisation of an environmental impacts workshop for experts (including industry representatives, geologists, biologists, economists, environmentalists, engineers) to share methodologies and guidelines on how to evaluate impacts on GES descriptors, especially to fill the gaps previously identified.

Approach The methodology under Task 6 will include the following tools: • desk-based research; • interviews; • international workshop for stakeholders ; and • analysis of questionnaire results.

In order to ensure effective coordination of implementation and task delivery, internal project meetings will be held at regular intervals, involving external experts. We will also create an online hub that allows for the sharing of documents and findings. Compiling information on impacts Implementation of this task will commence with desk based research to assess literature including published studies, reports, statistics as well as interviews and reports of stakeholders active in the field of deep sea mining. The research will address the three types of deep sea mineral deposits in the context of several indicators such as benthic community structure, pelagic species (and the relevant unknowns), sensitivity, light, noise, turbidity, genetic resources, recruitment, etc. Relevant information relating to sand and gravel extraction will also be taken into consideration and integrated into the final analysis. Through the literature review we aim to draw a comprehensive overview on the environmental impacts of the three different types of mining and would identify the key impacts by size of area and/or possible size of population affected. A number of impacts are expected to be identified as a result of the literature review and the interview process. An inventory of these impacts will be compiled and inter-linkages to MSFD

38


descriptors and indicators will be highlighted.18 The compilation of the inventory will be based on a number of essential data sources such as the Nautilus EIA19, NGO documents, relevant publications from the International Seabed Authority, dredging guidelines, research publications etc. The final output of the findings is expected to be summarised in a table format similar to table 4 below. Further explanation will be provided on the impacts relevant for the specific types of ores and the phases of operation during which the impacts occur.

Table 4.2: Template for the inventory of impacts

Impact MSFD descriptor

relevance

Type of

mining

Impacted

Area Duration Recovery

Relevance for land based

mining

Defining the

impact

GES

descriptors

1-11

Nodules/

sulphides/

manganese

crusts

Deep

sea/water

column/air

/surface

layer

Long

term/short

term

Slow/rapid High/moderate/

low/very low

As part of this inventory, we will seek to distinguish as much as possible between impacts relevant to specific mining activities from those more generic ones. Criteria affecting the relevance of the impact for a specific mining activity may include: • Exploration and mining footprint; • Technology involved; • Waste nature and volume; • Community perception; • Ecosystem services; • Distance from shore; • Environmental conditions especially current regime; • Seafloor morphology; • Seabed sediment properties; • Processing options; and • Value of resource and safety. In order to distinguish between pressures and associated impacts during the prospecting, exploration, extraction and processing phases of deep sea mining we intend to draw on ISA reports and data for nodules. Finally, to identify gaps regarding current knowledge on impacts, we will use desk-based research, interviews and round table meetings at the international workshop as well as additional communication with stakeholder via emails or face-to-face meetings. Roadmap to identify operational targets for Good Environmental Status Based on the impacts identified a roadmap will be proposed containing the necessary steps to identify operational targets for Good Environmental Status (GES).20 The roadmap is expected to include a sequence of activities such as data gathering and transparency in reporting as well as to highlight the establishment of conservation areas where mining activity should be prohibited (by

18 European Commission (2012): Good Environmental Status (GES) of the Marine Environment, available at http://ec.europa.eu/environment/water/marine/ges.htm

19 EIA Report for the Nautilus (2013): available at http://www.environment.gov.ck/attachments/article/110/Nautilus%20Resort%20EIA%20Report.pdf

20 Based on Member States` agreement

39


http://ec.europa.eu/environment/water/marine/ges.htm

http://www.environment.gov.ck/attachments/article/110/Nautilus%20Resort%20EIA%20Report.pdf

reviewing different assessment tools such as Marxan) taking into account EU and international legislation on MPAs. An example Table of this information is shown below. Information for the compilation of the roadmap will build on published sources and stakeholder interviews. The interviews will identify where processes and techniques differ and will establish points where no information is currently available.

Table 4.3: Proposed template for preliminary roadmap on operational targets for GES Step 1: Gathering raw data on deposits and ecology

Description:

Cost and benefit estimation:

Recommendations for implementation:

Step 2: Transparency of information exchange

Description:



Step 3: common indicators for technology assessment

Description:



We expect that the proposed roadmap will remain a “dynamic” document that allows for the incorporation of new findings. Once we have identified basic environmental impacts and prepared a roadmap to measure operational targets, the next step will be to monitor the operations. In order to establish monitoring criteria we will assess the tools that are currently available for the review and monitoring of the environmental impacts. Review and inventory of monitoring techniques Seabed mining operators are obliged to satisfy best environmental practices and to provide the regulatory authority with reporting/monitoring information confirming that best practices are being applied.21 The regulatory authority then needs to verify that the monitoring measures are in place and that the mining operator is adhering to the best environmental practices. A set of monitoring techniques needs to be in place to fulfil this requirement. These monitoring techniques may include: • National and international legislative framework; • Monitoring surveys; • Setting environmental performance targets; • Reporting requirements; • Quality control scheme (ecological-technological); and, • Third-party independent assessment etc. The technologies used to monitor also include physical monitoring devices such as Autonomous Underwater vehicles, ROV and remotely piloted aircraft. We will collect information on the

21 ISA (2011): Environmental Management Needs for Exploration and Exploitation of Deep Sea Minerals, ISA technical study No 10, available at http://www.isa.org.jm/files/documents/EN/Pubs/TS10/TS10-Final.pdf

40


http://www.isa.org.jm/files/documents/EN/Pubs/TS10/TS10-Final.pdf

availability and relevance of these techniques, create an inventory and highlight any gaps in knowledge or accessibility of information. Comparison with land-based mining We intend to further contrast the impacts of seabed and land-based mining from an environmental perspective, although we must note that due to the diversity of ores accessed through land based mining we expect to capture only those impacts that are relevant for deep sea mining operations (excluding aggregates). We will also make use of findings resulting from the technology analysis under Task 1.

Box 4.5: Compare and contrast alternatives to access minerals As a result of the research and consultation process, the impacts of seabed mining would be compared and contrasted with those of land mining as well as recycling processes. This comparison would be carried out using a set of criteria applicable to assess environmental impacts of a large variety of activities on rather diverse locations, such criteria can include: - Ambient water quality in streams, or effluent discharge standards; - Air emissions, and/or workplace air quality; - Noise emissions, or exposure; - Waste disposal, especially waste materials allowed to be dumped; and, - Human exposure to dust, toxic chemicals or radioactivity.22 A key goal of the exercise would be to establish a set of basic criteria for harmonising practices, while taking into account the special characteristics of deep sea mining that can differ based on the technique, the location and the type of ore being mined.

Workshop Findings of the assessment will be discussed at the international environmental workshop which is expected to be held shortly after the interim report for Task 6 has been submitted. The workshop will provide an opportunity to discuss the Task results and validate its findings in light of on-going exploration work. As part of the workshop, we will invite stakeholders involved in deep sea mining as well as environmental NGOs and academia. Furthermore, the international workshop is expected to feed further information as thematic sessions are organised on the topics of: • Direct and indirect environmental impacts; • Land-based mining contrast; • Transparency of operations and ways to achieve it; and, • Possible criteria for operational targets on Good Environmental Status.

A draft agenda and draft list of invitees will be shared with the Commission for reflection prior to the workshop.

Output 1) preliminary assessment of environmental impacts in the interim report 2) full assessment of environmental impacts in the final report 3) roadmap on compiling operational targets for GES 4) workshop on environmental impacts Expertise

22 As per the UN environmental guidelines for mining operations, available at http://commdev.org/files/814_file_UNEP_UNDESA_EnvGuidelines.pdf

41


http://commdev.org/files/814_file_UNEP_UNDESA_EnvGuidelines.pdf

The environmental task will be led by Morten Sorensen and Elaine Baker of GRID Arendal. Ecorys input into Task 6 will be coordinated by Eszter Kantor, ensuring smooth cooperation and information exchange between experts of GRID Arendal, Seascape Consultants and the team of internal experts including the events team responsible for the organisation of the workshop. Since Task 6 is expected to receive inputs from the geological and the legal analysis tasks, effective coordination between the project teams (GEOMAR specialists in particular) is essential.


Elains Baker (Grid Arendal) (task

leader)

Overall coordination of the


Morten Sorensen (Grid Arendal)

Literature review, inventory and

categorisation of impacts, review of

monitoring techniques

Economic analyis

Yannick Beaudoin (GRID

Arendal)

Assessment of specific

environmental impacts; task

reporting

Eszter Kantor EIA, overview of findings,

synthesis

Core team liaison, geological

analysis

Phil Weaver/ Henry Ruhl/David

Billett (Seascape Consultants,

NOC and DSES)

Literature review, roadmap of GES

operational targets, EIA Economic analysis

Ecorys events team Workshop organisation Technology analysis

External experts Involvement with on-going projects

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4.5 Deliverables

The following deliverables are foreseen to be submitted during the course of the project – as requested in the tender specifications. 1) Inception report and work plan

We will submit the inception report within two weeks after the kick-off meeting. It will contain the updated work plan, in light of any comments received from the Commission during the kick-off meeting, as well as the detailed planning and draft set-up off the workshops to be organised. The inception report will also contain an updated timeline, as well as listing literature to be consulted and potential stakeholders to be contacted. 2) Draft questionnaire and consultation paper

Two months after the contract has been signed, we will submit a draft questionnaire and consultation paper to the European Commission. The questionnaire will address stakeholders and provide information on the developments of deep sea mining and its impacts. 3) Presentation of interim reports on the technology, legal and environmental analyses

An interim report presenting the preliminary findings of Tasks 1, 3 and 6 will be submitted to the Commission four months after contract signature. The report will provide an overview of the methodology used in the tasks and present preliminary analysis results. 4) Presentation of preliminary results (up to three presentations in Brussels)

A maximum of three presentations on the key figures and results of the interim reports will be given to the Commission and other stakeholders – as identified by DG MARE, in Brussels. 5) Draft map layers

Draft map layers containing geographic coordinates and draft findings will be delivered to the Commission 6 months after contract signature. 6) Draft final report

Seven months following contract signature, a draft final report will be submitted to the Commission Services. The draft final report will summarise the findings of the project thus far, provide a summary on the methodology used in the individual tasks and include all diagrams and tables used in the analysis. Information deemed confidential will be provided in separate annexes. 7) Presentation of the draft final report to stakeholders A power point presentation for stakeholders will be submitted to the Commission on the study findings as presented in the draft report.

8) Final report Following the receipt of Commission comments on the draft final report, a final report will be submitted, in Microsoft Word and PDF formats, which will address any comments received from the Commission. The main text of the report will contain all key findings and analysis whereas supplementary tables and diagrams will be placed in an annex. The main text of the final report will not exceed 200 pages. Tables and data will be delivered also in Microsoft Excel or Access formats. The final report will be submitted within nine months following contract signature and will include separately map layer files developed.

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5 Organisation and work plan

5.1 Work plan

The study work will be organised following the requirements as outlined in the Tender Specifications and as presented in the previous chapter of this proposal. The study activities have been grouped into seven distinct tasks as elaborated in the previous chapter, which are bundled in three work streams. The planning for these tasks, along with the deliverables and meetings, is provided in the scheme below. As some of the work in the different tasks will be carried out simultaneously, care will be taken to assure a high level of information exchange between project team members and external experts. This coordination will be carried out by Ecorys core team members and will culminate in regular team and project meetings, via teleconferencing or face-to-face discussions. More specifically, components addressed by the project management at the start of the project are the following: • Knowledge management: as information will be gathered and knowledge gained with various

tasks and by team members from multiple partner organisations, good knowledge management is essential to be able to deliver integrated results. For this, knowledge exchange mechanisms will be set up including regular task leader exchanges, team meetings bringing together experts from related tasks. Furthermore, to align the work of the different tasks an online hub will be set up using the Basecamp portal.23

• Project risks: as the time frame for this study is quite short, the project needs to run in full speed and delays or insufficiently detailed findings of certain tasks would immediately affect the delivery of other tasks. Hence such risks should be managed properly and

• Project planning: because of the intensity of the work and the large set of sub-products and results to be developed, use will be made of sophisticated project management tools, e.g. the Microsoft Project package, to set-up a detailed project planning and to allow day-to-day monitoring.

23 https://basecamp.com/

44


https://basecamp.com/

Table 5.1 Workflow table

Abbreviations: KoM = kick-off meeting ICR = Inception report DQ = Draft questionnaire ITR = Interim Report WS = Workshop ML = Map layers SHP = Stakeholder presentation FR = Final report

Month of the project 1 2 3 4 5 6 7 8 9

Task 0 – Project Inception KoM ICR

Task 1 – Technology Analysis ITR WS DFR SHP FR

Task 2 – Economic Analysis DFR SHP FR

Task 5 – Project analysis DFR SHP FR

Task 3 – Legal Analysis ITR

Task 4- Geological Analysis ML DFR SHP FR

Task 6- Environmental Analysis ITR WS DFR SHP FR

Task 7- Public Consultation preparation and dissemination

activity (website) DQ

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5.2 Project team

The study team is composed of experts internal to the consortium as well as external experts representing the following institutions: Ecorys, MRAG, (as consortium partners under the Framework contract), GRID Arendal (subcontractor to the consortium) and GEOMAR and the Seascape Consultants (external experts with whom cooperation agreements has been made specifically for this assignment. Building on the previous insights gained through the Blue Growth study, Ecorys will take the lead of for this project, with Roelof-Jan Molemaker as the team leader. The project team is composed of a core team managing the implementation of the study, supported by specialist experts and by support staff.

5.2.1 Core team The Core Research Team will be responsible for the overall execution of the study work. It is comprised of the Team Leader and experienced evaluators and economists from various backgrounds. The core team is responsible for the sound conduct of the study and the issuing of the deliverables. The composition of the proposed team is outlined in the following table.

Table 5.2 Project team Name Proposed role/ level Category Company

Roelof-Jan Molemaker

Team Leader, task leader task 2

economic analysis and task 7

consultation

I. Ecorys

Johan Gille Deputy Team Leader; task leader

task 1 technology analysis I. Ecorys

Jan Maarten de Vet Core team member, task leader

task 5 project analysis I. Ecorys

Eszter Kantor

Core team member, task liaison

task 4 geological analysis task 6


I. Ecorys

Steve Hodgson Core team member, task leader

task 3 legal analysis I. MRAG

Short profiles of the core team members are provided below. Roelof-Jan Molemaker- team leader Roelof-Jan Molemaker, project director of the previous Blue Growth study and managing director of the Ecorys Brussels office. Roelof-Jan has a vast experience in both international and national projects in a wide range of themes. His expertise covers both policy and sector studies and ranges from institutional and organisational issues to, financing and infrastructure investments. He is a key policy advisor to international organisations such as the European Commission, World Bank and various international financing institutions. During his professional career of more than 20 years has worked in a large number of countries across the world, including countries in Asia, Africa, and Latin America. From his position as director of Ecorys Brussels and his market directorship for the European Union, he is well acquainted with EU policy in general across various domains.

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One of the key areas of expertise is the evaluation of policies, programmes and projects, both ex-ante and ex-post. Roelof-Jan has also been leading on the Impact Assessment for Ocean Renewables. He is therefore well-placed to apply these insights to this study. He has a proven ability to work efficiently in virtual teams and a solid track record in working in large multidimensional projects. Johan Gille- deputy team leader Johan Gille is a senior consultant at ECORYS and has nearly 13 years of experience in policy studies covering freight transport, seaports developments and maritime affairs. He is leader of the Ports and shipping sector within the Ecorys group. Johan was deputy team leader for the Blue Growth study, a scenario study on oceans and seas for DG MARE providing the basis for DG MARE's near future policy in which he contributed to the R&D mapping exercise on thirteen sectors. Johan was also project manager of an Ecorys funded research project into the economic impacts of climate change for the Arctic region. Currently he is deputy team leader of the Blue Growth framework contract for DG MARE and has been contributing to assignments dealing with ocean energy and coastal tourism, mainly from the perspective of data analysis and data structuring. Johan has a degree in Science & Policy (Utrecht University) where he took courses on geology and physics, and he has an interest in technical advancement of (offshore) industry sectors. He led asssignments on offshore market segments for shipbuilding enterprises and participated in the study on competitiveness of the European shipbuilding industry for DG ENTR. Jan Maarten de Vet – core team member Jan Maarten de Vet is director of Ecorys in Brussels. He has extensive experience in European policy preparation in the areas of competitiveness and sustainable development. Jan Maarten has been team leader of the Blue Growth (DG MARE), where he studied amongst others the potential of minerals extraction through deep sea mining. Currently, he is project director of the DG ENTR Framework contract on Industrial Competitiveness and Market Performance. Within this context, he has been overseeing several major studies, including those on the Steel industry, Structural change, Construction, Tourism, Space industry and Business services. He has also been lead-author and presenter of an Issues paper on Sustainable competitiveness policy for the Belgian EU Presidency. Before joining Ecorys he worked as Young Professional for the OECD in Paris, in particular with the Industry division. Eszter Kantor – core team member Eszter Kantor is a Senior Consultant with Ecorys Brussels with a background in Economics and a MSc in Environmental Management. Ms Kantor has worked extensively on European Commission Assignments covering a wide range of thematic fields such as marine litter, waste shipments, competitiveness and policy evaluations. Ms Kantor is currently the day-to-day project manager of the Blue Growth Study on the North Sea and the English Channel and a key contributor on the impact assessment study of Blue Biotechnology. Previously she has worked on the Operational Programmes and later on the actual bi-annual action programmes under the Structural Funds in Hungary as a public servant. She was also involved with research and development managing a Centre of Excellence project at the Institute of Solid State Physics and Optics of the Hungarian Academy of Sciences under FP5. Steve Hodgson – core team member Steve is senior legal consultant at MRAG. He has 18 years of work experience. Steve is an expert knowledge in legal aspects of Maritime Spatial Planning, Marine Surveillance Data, Legal Aspects of Marine Environmental Data (DG MARE). Within that, he was team Leader on EU Framework project on Legal Studies in the fields of the Common Fisheries Policy and Maritime Affairs. Led studies on the legal aspects of maritime spatial planning (which in turn fed into the Communication

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Roadmap for Maritime Spatial Planning: Achieving Common Principles in the EU), marine environmental and surveillance data (which contained detailed descriptions of existing data sharing mechanism and analysis of relevant laws), legal aspects of Arctic shipping, and impact assessment of revision of current exclusions of seafaring workers from scope of EU social legislation. Besides, he gathered extensive experience in cost and benefit analysis, notably on behalf of DG MARE (Costs and benefits arising from the establishment of maritime zones in the Mediterranean Sea). Steve has a Masters in Environmental Law (SOAS, University of London, 1994) as well as a BA in Law & French (University of Sussex, 1986). Besides his native language English, he is fluent in French and Russian.

5.2.2 Expert team The expert team is composed of a number of specialists who have acquired specific deep sea or land-based mining expertise through various assignments. They all have proven track records in specific fields of deep sea mining relevant to this assignment and contributed to this proposal from their various perspectives. Their names, key fields of expertise and involvement in the various tasks are listed below.

Table 5.3 Expert team members

Expert Expertise Tasks involved

Dr. Michael Buxton (TU Delft) Geo-science, base metals, sediment

hosted ore bodies

Technology analysis,

economic analysis

Dr Jorg Benndorf (TU Delft) Mining technology, raw materials

processing, Costing of mining activities

Technology analysis,

economic analysis

Jip Lenstra (Ecorys) Economic model set-up Economic analysis,

Geological analysis

Gerbrand van Bork (Ecorys) Financial calculations, financial

modelling Economic analysis

Marjan van Schijndel (Ecorys) Project evaluation, CBA Economic analysis,

Projects analysis

Paul Baker (Ecorys) Economic modelling Economic analysis

Andrew Serdy (IML, University of

Southampton) Marine law specialist Legal Analysis

Sven Peterson (Geomar) Mineralogy and geochemistry Task leader geological

analysis

Prof. Dr. Colin Devey (Geomar) Seafloor dynamics, Geodynamics +

Marine Petrology & Geochemistry Geological analysis

Elaine Baker (Grid Arendal) Seafloor geomorphology

Task leader

environmental analysis;

Geological analysis,

Morten Sørensen, (Grid Arendal) Geographer, topographer Project analysis,


Yannick Beaudoin (Grid Arendal) Social-ecological economics Environmental analysis

Prof Phil Weaver (Seascape

Consultants) Seabed environments

Economic analysis,

Environmental analysis

Dr David Billett (Seascape/DSES) Deep sea biologist Environmental analysis

Dr Henry Ruhl (Seascape/NOC) Deep sea biologist Environmental analysis

Please note: the CVs of those sector experts that were not listed in the admin part of the initial proposal for the

Blue Growth framework contract are attached as an annex to this proposal.

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5.2.3 Support staff The support staff will play a prominent role in providing a sound basis for the expert evaluations and will assist in synthesising the findings of the different tasks. We will also assure continuous dissemination of information between the project teams using an online hub, where documents and findings will be uploaded by the team members.

Table 5.4 Support staff members

Team Member Expertise Tasks

Joey van Elswijk Value chain analysis Technology analysis; economic

analysis

Sanne de Boer Literature review and policy

support, Cost assessment

Technology analysis

Andreas Pauer Econometric support Economic analysis

Jakub Gloser Third country project analysis,

Information and dissemination Project analysis, Public

Consultation

Federica Gerber Case study support Economic analysis, projects

analysis

Linette de Swart Legal review support Legal Analysis

Martin Wegele EU project analysis Project Analysis; Public

consultation

Stefanie Kaiser (NOC) Literature review, analysis of

impacts Environmental Analysis

Verity Nye (NOC) Environmental analysis support Environmental Analysis

Miles Macmillan-Lawler (GRID) Environmental analysis support Environmental Analysis

Please note: the CVs of those country experts that were not listed in the admin part of the initial proposal for the

Blue Growth framework contract are attached as an annex to this proposal.

5.2.4 Quality assurance Quality assurance will be performed by Jan-Maarten de Vet, team leader of the previous Blue Growth study and director of the Ecorys Brussels office.

5.3 Resource allocation

Table 4.4 below shows a more detailed breakdown of man days per individual tasks as mentioned in the workflow table (see chapter 4.1)

Table 5.5 Man days per tasks

Allocated man days per expert category

Cat I Cat II Cat III Cat IV subtotals

Task 0: Project Inception 13 13

Business

stream

Task 1:Technology analysis 72 40 112

Task 2: Economic analysis 110 28 138

Task 5: Project analysis 40 42 82

Task 7: Public consultation and

website

11 18 29

Legal stream Task 3: Legal analysis 80 15 95

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Allocated man days per expert category

Cat I Cat II Cat III Cat IV subtotals

Environmental

stream

Task 4: Geological analysis 88 88

Task 6: Environmental analysis 147 147

Project

management

Core team management tasks 45 45

Totals 606 143 749

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6 Budget The total budget required for the project is € 890.700 in direct response to the service request. The specification of cost per staff category is shown in the below table. fee rate days costs

Category I Senior consultant € 1.100 606 € 666.600

Category II Consultant € 825 0 -

Category III Junior consultant € 625 143 € 89.375

Subtotal € 755.975

Direct costs (travel, workshops, purchase of specific reports)

Workshop I € 45,000

Workshop II € 45,000

Kick-off meeting € 1,750

Project meetings € 8,800

Interim meeting € 1,750

3 presentations of preliminary results € 4,200

Field trip I € 3,600

Fieldtrip II € 4,200

Fieldtrip III € 8,800

Fieldtrip IV € 6,600

Subtotal € 133,900

Total in € € 889, 875

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Annex I – CVs

Team members proposed of which CVs were already presented in the framework proposal are: Ecorys: • Roelof-Jan Molemaker • Johan Gille • Jan Maarten de Vet • Martin Wegele

MRAG: • Steve Hodgson

GRID Arendal: • Yannick Beaudoin • Miles Macmillan-Lawler CVs of the following persons, not previously presented in the framework proposal, are attached to this proposal: Ecorys: • Eszter Kantor • Paul Baker • Jakub Gloser • Andreas Pauer • Linette de Swart • Jip Lenstra • Sanne de Boer • Federica Gerber • Joey van Elswijk • Marjan van Schijndel • Gerbrand van Bork • Loic Blanchard GRID Arendal: • Elaine Baker • Morten Sørensen TU Delft: • Dr. Michael Buxton • Dr Jorg Benndorf Geomar: • Sven Peterson • Prof. Dr. Colin Devey • Tea Laurila • John Jamieson Seascape Consultants:

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• Prof Phil Weaver • Dr David Billett (DSES) • Dr Henry Ruhl (NOC) • Stefanie Kaiser (NOC) • Verity Nye (NOC) IML Southampton • Andrew Serdy

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BELGIUM – BULGARIA – HUNGARY – INDIA – THE NETHERLANDS – POLAND – RUSSIAN FEDERATION – SOUTH AFRICA – SPAIN – TURKEY – UNITED KINGDOM

Documents

Study in support of Impact Assessment work for ocean energy - Europa