credit: Chris Mueller. David Heydon, CEO of Nautilus Minerals, on the banks of Lake Ontario.
credit:David Clugston. A deposit extracted from 5,200 feet below the surface of the Bismarck Sea, off Papua New Guinea, contains a rich supply of copper and gold.
credit:David Clugston.The chimney of a black smoker obtained off the coast of Papua New Guinea is rich in copper, zinc, gold, and silver.
credit:.caption_4="Seabed mining is carried out by a 6-ton remotely operated vehicle lowered from the surface."
credit:David Clugston.Active black smokers are too hot and sulfurous to be mined.
More than 5,000 feet under the sea, off the coast of Papua New Guinea, a small white crab flexes its claw. It has paused halfway up a rock outcropping and is approaching a tantalizing colony of snails when a flash of light illuminates the seabed. A wondrous, prickly landscape of spires appears and stretches off into the blackness. The crab taps its feet on the rock, takes a tentative step toward the snails, and is suddenly confronted by a 6-ton, 10-foot-tall, remotely operated robotic drilling machine.
The contraption is fitted with a series of circular, diamond-infused pulverizers, which it lowers onto a nearby rock surface. The pulverizers begin to spin, crushing the rock into gravel. A bloom of silt rises up over the seabed, enveloping the crab in a cloud.
Ten months later — this past November — the crab reappears on a videoscreen in the cavernous, sub-terranean convention hall of the San Francisco Marriott hotel. It’s the annual Hard Assets Investment Conference, and the room is jammed with booths touting uranium discoveries in Canada, gold deposits in Central Africa, silver digs in China, and zinc operations in Bolivia. And though it’s nine on a Sunday morning, an odd assortment of bankers, forklift operators, and retired insurance salespeople are also here, eager to weigh the benefits of investing their money in mining.
The crab is getting more than its share of attention. As it’s about to make its tentative bid for the snails, a series of bold yellow numbers pop up on the screen, delineating the mineral content of the rock it’s perched on: 12.2 percent copper, 4.2 percent zinc, and a substantial amount of silver and gold. A crowd gathers around the screen, including a man in a cowboy hat and jeans. He seems impressed but skeptical. Those numbers are just too high.
“There’s no mistake, if that’s what you’re thinking,” says David Heydon, looking dapper in pinstripe pants and a crisp white shirt. Heydon is a veteran Australian prospector and onetime dotcom entrepreneur. He returned to the mining industry five years ago to become CEO of Nautilus Minerals, a new breed of mining company with a head start on what may turn out to be the largest gold rush the world has ever seen. It is Heydon’s company that filmed the crab and retrieved the first commercial ore samples from the ocean floor. “The gold is just lying there on the seabed,” he tells the group clustered around the Nautilus booth. He has a breezy Aussie accent and, at 50, a light dusting of gray in his hair. “And let me tell you, we haven’t seen these types of mineral deposits since the beginning of modern mining.”
Heydon acknowledges that digging up the deep seas could make him a billionaire. But he insists that it’s also the solution to all the ills that land-based mining has caused. No indigenous societies need be disturbed. Better still, land doesn’t have to be butchered. There are no open pits, no leveled mountaintops. To make the most out of poor-quality ore, mining companies use cyanide to increase their yield and run the risk of polluting streams and lakes. None of that, he says, will happen underwater.
This new approach to mining comes as the industry reaches a critical juncture. Many of the major land deposits have been exhausted by the $225 billion-a-year industry. But demand for minerals has never been higher. China and India are rapidly developing a middle class that’s hungry to improve its quality of life. That means millions of new houses laced with miles of copper wiring and acres of corrugated iron roofing. It means TVs, cars, and cell phones flecked with gold and cobalt. “How do we tell the guy living in a thatched hut that he can’t have a new metal roof because it’s going to cause environmental problems?” Heydon asks. “When we were developing, we didn’t care about that, so why should they? It’s up to us to pioneer new options.”
Heydon talks a good game. And in the past year, he has almost single-handedly ignited the current rush to mine mineral deposits on the ocean floor. Shuttling between the UK, Australia, Canada, and the US, he’s delivered his spiel hundreds of times to investors like the ones gathered here in San Francisco, as well as to the world’s largest mining companies. Anglo American, the owner of the De Beers diamond dynasty and the world’s second-largest mining company, recently invested $25 million. An additional $75 million came from iron, steel, and zinc producers who are scrambling to hedge against the possibility that their terrestrial mines may become depleted. Nautilus went public on the mining-heavy Toronto Stock Exchange in May, raising $22 million more. This winter the company said it would issue additional shares, raising another $100 million. What was a concept-driven startup 10 months ago is now a company with a war chest of cash. And things are moving fast, at least for the world of heavy industry: Nautilus is on track to begin mining the seabed by 2009.
Over the past two years, Heydon has unleashed unmanned underwater vehicles to canvas the western Pacific for new deposits. As a result of that research, Nautilus has laid claim to 106,500 square miles of seabed, an area larger than the UK. Heydon is moving so fast that most environmentalists aren’t aware of Nautilus’ plans. Nobody outside a small group of mining-industry executives and geologists has even asked whether mining the seabed is a good idea. There are no international or regional regulations on how to govern it, which leads to the inevitable question: Should the world trust David Heydon?
When Heydon turned 30, he bought a small boat and motored up the mouth of a remote river in Borneo, Indonesia. It was 1987, and he had been working in an office as a mining executive for most of the previous five years. The work didn’t really appeal to him. He had studied geology at the University of New South Wales and, before going corporate, spent a few years hunting in the Australian outback for zinc. “Those first couple of years out of college were wonderfully simple,” he remembers. “All you needed to do was get a dog, a 4x4, chop a tree, cut it into four pieces, hammer the stakes into the ground — and you’re a millionaire.”
As he headed deep into Borneo, reaching areas few Westerners had ever seen, he paid particular attention to the jewelry that locals wore. He eventually returned to the village where the women sported the biggest gold necklaces. His simple theory: There must be a lot of gold nearby. Only a few natives spoke English, so he took out his wallet and showed the villagers pictures of his two infants back in Australia. Everyone smiled, showing off teeth stained red from chewing betel nut. Then he pointed to their necklaces and to the earth. It didn’t take long for them to show him the stream where the gold came from.
Within a few weeks, he had built a small sluice and retrieved a pile of gold flakes. He had also gotten to know the villagers and built them a separate sluice to bring fresh water into the village. At night, as he fell asleep in his tent, he wondered at their indifference to material wealth. They could all be rich. Didn’t they want televisions? Wouldn’t they prefer to drive instead of walk? But there was no point. They didn’t have roads or TV reception. They were content, and their happiness hit Heydon in the gut because he knew he was just the first of many. Others would surely follow and set in motion forces that would likely destroy this traditional way of life. He wished it weren’t so.
Four years after Heydon’s trip to Borneo, a geologist named Ray Binns was leading a research voyage off the southern tip of Papua New Guinea when his 165-foot vessel, the Franklin, was threatened by a fierce cyclone from the south. The wind was already beginning to churn the sea into a white froth, and sheets of rain cloaked the densely forested islands on the horizon. Binns decided to make a run for safer waters to the north. Luck had turned against him again.
For five years, he had been fruitlessly searching the Pacific for a break in the seafloor where magma-heated water shoots up through Earth’s crust, picking up gold, silver, copper, and zinc as it goes. When the fluid comes into contact with cool seawater, the minerals precipitate out around the vent and form tall, rocky chimneys. These formations, known as black smokers, were famously discovered in 1977 near the Galapagos Islands and shown to harbor extremophiles — species that could survive in dark, corrosive, boiling environments.
Australia’s National Science Agency had tasked Binns with finding black smokers, which are located in areas where new earth is being formed. In these regions, vents are constantly born as Earth’s crust migrates, carrying with it a trail of cold, extinct smokers heavily laden with minerals. Over hundreds of millions of years, some of the deposits become dry land through continental drift or changing sea levels. In other words, active smokers represent the embryonic beginnings of today’s richest mines. Australian government officials believed that by better understanding how the smokers were created, scientists might help prospectors locate untouched deposits on land.
But after five years of searching, Binns still hadn’t found one. The agency was threatening to cancel the program, and this cyclone was the last thing he needed. As the ship motored into calmer waters, Binns dropped his instruments into the now-placid green sea. He watched absentmindedly as a seismograph-like machine etched out the silt levels in the water thousands of feet below. Suddenly, it started ticking up, drawing an urgently sloped line on the graph. Active black smokers shoot out telltale clouds of silt. The graph was showing that he was floating directly above one.
Frantically, Binns told the captain to do a U-turn and shouted for the deckhands to lower the video camera. A heavily encased 8-mm Kodak was thrown overboard and towed across the area. When the crew hauled it back up, the casing was scraped and battered. It had clearly collided with something — Binns and his crew found fragments of black rock embedded in the metal. They rushed the tape to the operations room, pressed Rewind, and watched as the camera slammed into the crusty pinnacles of a giant, spewing black smoker.
Binns quickly ordered an analysis of the rock pried loose from the camera. It was 20 percent copper — nearly the maximum amount possible for a rock. It also contained 10 parts per million of gold. The average land-based gold mine holds only one part per million. “It’s bloody El Dorado!” he shouted.
He had found more than he’d been looking for.
In 1993, after Binns returned from his second research trip to the black smoker, he told everyone he could about the extraordinary gold and copper content of his find. He suggested that it was silly to look at the trail of extinct smokers as simply a guide to land-based deposits. Why wait for geology to scatter and bury the minerals when they were sitting fresh, uncovered, and ripe for the picking right on the seabed?
To Binns’ surprise, nobody agreed with him. His boss said it would be hundreds of years before the deep sea was mined. A leading mining company complained to the government that taxpayers’ money was being spent looking for ways to replace land-based mining. Only one journalist came to Binns’ office to interview the geologist: Julian Malnic, editor of The Miner, a monthly industry journal, who had worked as a geologist himself. “My first thought was that this was like finding the Easter eggs before Mom hid them in the garden,” Malnic says. “I couldn’t believe there wasn’t a rush to do something.”
Malnic took photographs of Binns’ samples and also managed to snap some of the navigational charts identifying the location of the smoker. When he got home, he scrutinized the photos, jotted down the longitude and latitude, and mailed a mining claim to Papua New Guinea officials. Unbeknownst to Binns, Malnic then persuaded the Papua New Guinea government to award him its first-ever under-water exploration claim. Malnic had just staked Binns’ smoker.
For the next five years, Malnic tried to raise money for a proof-of-concept dig. He figured he needed about $10 million to hire a drilling ship to get an initial batch of rocks. But by 2002, he had run out of steam. Everyone told him it was impossible. And they had proof: In the 1970s, French, American, and German companies had tried to mine manganese off the deep ocean seabed. The endeavor cost more than $700 million and, in the end, didn’t produce enough commercial nickel1 to make the venture worthwhile.
Running out of ideas, Malnic thought of his old college buddy David Heydon, who also had mining experience, though he had detoured into Internet entrepreneurship in the 1990s. Heydon had leased freight containers, filled them with servers and satellite uplinks, cinched the containers to cargo ships, and created a webhosting company free of any government regulation. But his digital foray crashed with the market in 2001. Over lunch in Sydney several months later, Malnic asked him to join Nautilus, the company he’d created to commercialize his claims off Papua New Guinea. For Heydon, it was a chance to return to his first love, mining — and he wouldn’t be dogged by the doubts he’d suffered in Borneo.
The more Heydon looked into the idea, the more convinced he became. Technology had progressed substantially since the 1970s. Thanks to GPS and new stabilizing motors, ships were able to float over an exact point on the seabed. That would allow a pipeline to be built directly above a targeted site. The oil and gas industries had propelled advances in remotely operated vehicles now able to view, dig, and drill material at depths down to 8,000 feet. And the dredging companies had pushed the boundaries in their field, pulverizing millions of tons of sediment every year and pumping the crushed slurry to the surface. From Heydon’s point of view, the pieces were all there and, once assembled, promised to make underwater mining cheaper and more efficient than terrestrial extraction. So in 2002, he bought out most of Malnic’s interest in Nautilus Minerals and became the company’s CEO.
Rod Fujita can’t disguise his frustration. “David Heydon and Nautilus are about to make the same mistake made during the development of every other industry in history.” says Fujita, a senior scientist for Environmental Defense. “We’re letting him rush into this without studying the impacts. That was forgivable 100 years ago. It’s not now.”
Fujita has tried to alert the world to Heydon’s plans. He has called the Nature Conservancy and Greenpeace to warn them, but they showed little interest. “It hasn’t been in the news, and the mining happens where no one can see it, so maybe they don’t think it’s for real,” Fujita says. “But if it’s going to be regulated, we’ve got to set those regulations in place before they start mining, which means now.”
Fujita’s main concern is that the marine environment surrounding extinct black smokers is not well understood. Active smokers have been closely studied, and Nautilus agrees that their ecosystems are too rare to be mined (and the corrosive effluent makes them more challenging anyway). But the long line of extinct smokers stretching away from active vents has barely been investigated by scientists. Researchers don’t know what species are down there, much less how mining might affect them. “This has the potential to be more environmentally destructive than terrestrial mining,” Fujita says. He explains that giant clouds of silt could be carried across the ocean, a kind of under-water acid rain that wipes out life as it goes. “I like to call it oceanic smog,” says David Helvarg, one of the few other environmentalists tracking the issue. “It could take up to 40 years for the sediment to settle.”
Heydon has a ready answer. “The environmentalists think that we’re running out of ore on land, so now we’re going to rape and pillage the sea,” Heydon says. “It’s just a reaction — it’s not thought through.”
The reality, he says, is that mining the sea will have a lighter impact on the planet than mining on land. Plus, Nautilus has to do it right if it wants to build a business. As the pioneer, it has first-mover advantage, but if it creates an environmental disaster, it could ruin the industry it’s trying to build. In other words, Heydon thinks the world has every reason to trust him.
As evidence of his good intentions, Heydon has hired a team of marine biologists to study the dig site. They are in the midst of a 12-month investigation of ocean currents in the Bismarck Sea. Even if they find that the currents are strong, Heydon doesn’t see a problem. The water sucked from the seabed will be pumped back down after the ore is removed. Most of the water column will be unaffected.
The other major environmental issue is the possibility that a mine site might be the home of a unique species. Nautilus has, in fact, come across new critters in the area. Cindy Van Dover, director of the Duke University Marine Laboratory and one of the only scientists studying dormant smokers, recently discovered a small snail near the planned Nautilus mine site. “It was unknown to science, but it’s possible that there could be many more places where it exists,” she says. “We just don’t know.”
Nautilus is funding part of Dover’s research in the Bismarck Sea — just as the company funded work being done by the Woods Hole Oceanographic Institution. In fact, a large portion of scientific research on extinct smokers is paid for by Nautilus, leading to a sort of mini-boom in the previously overlooked specialty. There is a resulting lack of independent expert opinion. If this is a business strategy, it seems to have worked perfectly.
1 Correction, Fri March 16 12:00:00 EST 2007
The $700 million mining effort in the 1970s failed to find enough commercial nickel to make the venture worthwhile, not enough commercial manganese, as originally reported. (Return to the corrected text)
Dover, for one, doesn’t seem worried about environmental disasters. She argues that dormant smokers in volcanic arcs are periodically affected by underwater eruptions. The species living there are likely to be robust and well adapted to turmoil. And even if one smoker is destroyed, it’s not an unusual event. “There are those of us who say these things get run over by eruptions and lava flows, so it shouldn’t be a big deal to mine some of them.”
Back at the San Francisco Marriott, Heydon is winning converts, one pitch at a time. One of his more convincing points: the Belgian shipbuilding firm Jan De Nul, a leader in the dredging industry, is constructing — at no cost to Nautilus — a 627-foot ship customized for underwater mining. Its name: the Jules Verne.
The dredger will charge to operate the ship and is betting that Nautilus will have plenty of work to do when the vessel launches in 2009. Heydon’s first exploratory dig, last January, used a makeshift vessel and still produced a batch of world-class mineral samples. Since its IPO, Nautilus’ stock price has more than doubled.
Rick Rule, a speaker at the conference and a broker specializing in mining stocks, used to joke about Nautilus. “I called their project the world’s largest open-pit mine with a pumping problem. Now the joke is on me.”
Sitting on the ground next to Heydon in the Nautilus booth is a 200-pound chunk of a black smoker from that first dig. It could well be the same rock that the crab climbed in its quest for the snail colony, but now a small placard announces that the fragment is 20 percent copper and contains a large amount of gold. Prospectors have already offered to buy it on the spot, as if eager to carry it out of the conference room and onto the streets of San Francisco on their shoulders. One estimated its value at $100,000.
Heydon refused the offers. For him, the rock represents more than the precious minerals it contains. It’s a symbol of the dawning of the age of aquatic mining. “People are going to look at this moment and wonder why we went to all the trouble to dig up the earth when fresh minerals are being born every minute on the seabed,” Heydon says, turning his attention to another potential investor. “Land is rare. Perhaps we should preserve it.”
Contributing editor Joshua Davis (jd@joshuadavis.net) wrote about ultramarathoner Dean Karnazes in issue 15.01.#### Podcast: Writer Joshua Davis and Wired Senior Editor Mark Robinson discuss the story.
Listen: (9:28 Minutes)
https://downloads.wired.com/downloads/Audio15_03/DeepSeaPodcast001.mp3
