Tesla to Discuss Deep-Sea Mining at General Meeting

The US Securities and Exchange Commission (SEC) has allowed a proposal from an activist investor and non-profit organization, As You Sow, focused on deep-sea mining, to be considered at Tesla's upcoming annual general meeting. While Tesla argued that these matters should not be under shareholder scrutiny, SEC disagreed and prompted discussion on the matter.

The proposal urges Tesla to endorse a moratorium on deep-sea mining, aligning with the principles outlined in the Business Statement Supporting a Moratorium on Deep Sea Mining, which has garnered support from various entities including automakers like BMW, Volvo, and Volkswagen, Google, Samsung SDI, financial institutions, and NGOs like Greenpeace. In the absence of Tesla's commitment to a moratorium, As You Sow has requested the company's board to provide reasoning and evaluate the anticipated necessity for deep-sea materials.

As You Sow argues that Tesla's reluctance to support a moratorium raises concerns among shareholders regarding reputational and regulatory risks associated with deep-sea mining. Additionally, they highlight the legal, technological, and financial uncertainties surrounding deep-sea mining, making it a costly and risky endeavor for Tesla to integrate such minerals into its supply chain.

Tesla had attempted to have the proposal omitted, contending that it pertains to ordinary business operations like supplier selection and raw material sourcing, which should not be subject to direct shareholder oversight. However, SEC disagreed with Tesla's stance, stating that the proposal addresses broader societal impacts beyond ordinary business matters.

Previously, As You Sow also filed a similar proposal with General Motors, albeit without the call for a moratorium. Instead, it seeks public disclosure of policies concerning the use of deep-sea-mined minerals in production and supply chains. These resolutions form part of As You Sow's biodiversity program, reflecting increasing shareholder apprehension regarding the systemic risks posed by biodiversity loss and imminent ecosystem collapse.

Deepsea Mining in the World

Currently, the International Seabed Authority (ISA) has approved 31 contracts, 30 of which are active, each lasting 15 years. Among these contracts, several involve governmental entities such as the governments of India, Poland, and South Korea, as listed on the ISA website. However, most contracts are with private companies that have directly engaged with ISA for deep-sea mining activities.

China leads with five of these ISA contracts, followed by Russia and South Korea with three each. Japan, India, Germany, Poland, France, and the United Kingdom have two contracts each. Brazil, Jamaica, Kiribati, Cook Islands, Singapore, Tonga, and Nauru each have one contract.

While Mexico has not yet started deep-sea mining, it has a substantial opportunity to do so. With access to both the Atlantic and Pacific Oceans and its proximity to the Clipperton Fracture Zone, a rich area for mining, Mexico's mineral reserves are estimated to contain 21 billion t of polymetallic nodules. These are believed to hold about 6 billion t of manganese, 226Mt of copper, 94t of cobalt, and 270Mt of nickel.