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Mineral deposits of base metals, precious metals, and rare earth elements have been discovered on deep seabeds, and the commercial exploitation of these resources seems poised to begin after faltering for many years. The development of seabed resources could be socially beneficial if all goes well, but the industry faces daunting challenges and uncertainties. Emerging regulations and contracting mechanisms are the principal means for managing these uncertainties. This article recommends a complementary approach: the use of ex ante benefit–cost analysis of proposed seabed mining contracts that incorporates a fundamental uncertainty evaluation. We argue that such an ex ante evaluation will improve the state of information for the decision-making, reducing the risk of regulatory noncompliance or costly contract disputes after seabed mining begins.
The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
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