The Clarion-Clipperton Convergence

7,000 miles east of China, and 4,000 miles south of Alaska, an intersection is made not by contested islands or naval bases, but instead by something much more valuable, and equally as volatile. The Clarion-Clipperton Zone represents the richest mine of the deep sea, and correspondingly, has been contested. Such is the law of supply and demand. Governance, however, has fluctuated and left the zone in limbo- although protected under a mandate from the United Nations Convention on the Law of the Sea, and although the International Seabed Authority has historical precedent, it has since withdrawn from involvement. Mining Code negotiations failed after a decade of talks, as the US Executive Order of April 2025 was invoked, attempting to seize the chokepoint where opportunity presented itself. This Executive Order drew its credibility from the Deep Seabed Hard Mineral Resources Act of 1980, wherein US federal law regulated the exploration and recovery of minerals in the deep sea by companies, and as such a licensing regime was established. Executive Order 14285 served a contrary purpose- to expedite the process of obtaining such licenses. The Metals Company was quick to act upon such a development, and applied, that same month, for a unilateral permit, the coordinates of which fall within the Clarion-Clipperton Zone. The very same coordinates can be found in the paperwork of an International Seabed Authority (ISA) exploration contract. This governance overlap results in more than confusion; instead, it establishes a blatant contradiction, as TMC’s Nauru Ocean Resources Inc. (NORI) subsidiary holds an exploration contract through the ISA throughout blocks of the CCZ. These permits were issued under UNCLOS and administered through the Mining Code process- the issue therefore is not illegitimate claims of jurisdiction, but of competing legitimate parties. The US permit application under the Deep Seabed Hard Mineral Resources Act (DSHMRA) covers the same coordinate plots, although it falls under a different legal authority. The statute from 1980, under American jurisdiction, predates the UNCLOS ratification and was enacted through Executive Order, not an international treaty. Such a law effectively claims the region falls under US possession and sovereignty, while the UNCLOS and Mining Code claim it is internationally owned. Neither party recognizes the other officially- for much of the ocean, this is of lesser consequence; agreements are made, and treaties signed or ratified. That is because, however, such gray areas do not usually have contracts signed to allocate the land to a corporation. In this case, a double-issuance exists; multilateral attempts of obtaining a clear permit system burned ten years to produce a Mining Code that established its influence- although it failed. Meanwhile, the unilateral track of the United States took merely six months to produce a permit.

The exigence of such a jurisdictional delay in the Mining Code is a story of power politics in and of itself. The negotiations of the Mining Code stalled over the royalty and payment regime owed to the ISA- extraction was an agreed-upon clause; it was instead the tax off the top that led to stagnation. The environmental thresholds required a contracted fulfill obligations to move an operation from exploration to exploitation, as well as the consequence of sponsoring-state liability should a contractor’s operations cause seabed damage. However, such questions and complications of these specific rules were resolved by 2025; as such, there was no finished, established code. Therefore, the ISA was unable to approve exploitation applications from contractors, such as TMC’s NORI subsidiary, despite having held exploration rights for years. Come April 2025, Washington’s patience had ebbed, and a resolution was established through the Executive Order. A workaround from a blocked pathway to the CCZ to one open for business, at the behest of Washington. The ISA Council is pending a vote at present, the result of which tilts the consequences deeper than the contracts at issue. The first outcome is that of the Council acting to accommodate the contractors operating under national authority, with practical actions taken such as approval for its own contract holders, a protestation of the US permit- despite a lack of enforcement ability- or a negotiation taken to accommodate without losing leverage. Such outcomes concede that the ISA can not serve as a gatekeeper to the CCZ, and as such display a break-off from institutional practice, which has been upheld as yet for thirty years.

The second outcome is that the Council maintains the status quo; no exploitation approvals, resulting from the lack of a finished Mining Code, no recognition of the DSHMRA permit. Formally, this provides the ISA with its monopoly on legitimacy, if not power. It retains, in its facade, international cohesion and authority, but in practice it has no power to actually enforce such a role. The ISA fundamentally cannot, in this scenario, stop TMC from proceeding, which in turn provides credibility and power to the US’s authority on the region, at least to US corporations. The potential cost of this, however, is that other nations, namely China, follow the United States’s lead, with the resulting competition being one of markets without jurisdiction, competition with no arbiter, and likely, the decimation of the seafloor. The practice of this outcome is, as well, the further crystallization of a divide between the US and ISA, with a pair of unrecognizing licensing regimes over the same seabed. And in such an environment- where corporations must select between the United States and ISA, one which grants permits and one which does not- the choice becomes obvious.

Neither outcome restores the ISA to its prior power, which was maintained before April 2025; however, each grants some power to the United States over such a domain. The concern of legitimacy, in a field of chokepoints, must be put second, outside of the hands of institutions, and taken instead by the nation with the great power. At times of desperation, when institutions and governance muddy the water, only power can purify authority. The first outcome grants global clarity to the decay of the ISA’s position, while the second makes it de facto, while the authority insists the inverse. Denial or action, such is the choice that must be made by the ISA; as an institution without power, it cannot retain its legitimacy. Such games of power and legitimacy are played on all scales, domestic, organizational, geopolitical; but regardless of the July 2026 Council vote, the underlying pressure driving the TMC’s permit and Washington’s eagerness to invoke a statute from 1980 is the result of a chokepoint. Such a chokepoint is best seen from a commercial lens, rather than one purely of speculation on power and legitimacy. The CCZ and the contest surrounding it have muddied the water and require clarity. The cost of a lack of clarity is not just dilatoriness, but a fundamental economic weight. The chokepoints of critical minerals, such as cobalt, copper, nickel, and manganese, are at present dominated by China. Washington, attempting to slip out of such a chokehold, must first eliminate its vulnerability from the chokepoint- in such a case, that means owning these resources. Resources largely found in the CCZ. The cost of inaction is commercial costs, but more seriously, the international cost of independence from a mineral-rich China. Regardless of the cost of sea-mining relative to terrestrial mining, one cannot put a short-term price on long-term freedom, certainly not a superpower such as the United States.

Consider a scenario where the manufacturer of electric cars is trying to source the required permanent magnets needed for assembling their upcoming models. Instead of venturing into the global marketplace, the producer is confronted with the reality of a supply chain where all processors, producers, and distributors of the material are Chinese. In short, a monopoly. This is just one example of the current status of the critical mineral supply chain. In this case, the analysis will focus on how that dominance translates into product availability, price signal, and downstream impact on the buyer and end consumer. China's dominance in the processing of critical minerals is seen both in terms of production data and the supply chain available to the downstream producers. The International Energy Agency estimates that China holds close to 70% of the global capacity to refine strategic minerals, 91% of rare earth element separation, and 94% of permanent magnet manufacturing1. The extent of their dominance can be seen on business-to-business sites like Alibaba. Taking the example of neodymium permanent magnets, which are key in making electric vehicle motors. A search of the platform reveals that there are numerous Chinese companies providing customization services, OEM manufacturing, mass manufacturing, quality certifications, and international shipping. It is not just about selling the unprocessed materials; the Chinese companies have an integrated network that allows them to manufacture and sell the industrial components.2 For manufacturers, this means sourcing often begins within a Chinese supplier ecosystem rather than a competitive global marketplace.

While there may be other suppliers available 2 beyond China, their numbers are fewer than those in China’s manufacturing and processing network. With China’s dominance in processing critical minerals, it can control prices in global markets due to a lack of competition and alternative suppliers. According to the International Energy Agency (IEA), China has the dominant position in refining, with a surprising 19 out of 20 strategic minerals.3 After 2025, export controls tightened supply; buyers outside China felt it immediately: while domestic prices in China stayed stable, prices for buyers in Europe spiked to six times what Chinese buyers were paying. The resulting shortages forced many European and American car companies to cut back production or shut down plants entirely, showing just how exposed buyers become when they depend on a single dominant source.4 This pattern is consistent with earlier research on rare earth price transmission, which found that domestic Chinese prices act as the key benchmark for export prices, with price changes in China typically replicated internationally. It is not enough for China to just produce the necessary minerals; its dominance in processing gives it the control to set these price benchmarks.5 This can also be seen on its own e-commerce platforms. Alibaba.com, the platform foreign buyers use, lists prices in USD or EUR and includes export paperwork and buyer protection. 1688.com, its Mandarin-only domestic counterpart, lists RMB factory prices with none of that included. The most precisely matched comparison found identical 5 mm diameter, N35-N52 grade round magnets were priced 41% to 98% lower on 1688 than the equivalent Alibaba listing. This gap is consistent with, though somewhat wider than, two additional shape-matched comparisons: round/disc magnets ran roughly 63% to 85% lower on 1688, and 3 rectangular block magnets, a shape commonly used in EV motor assembly, ran roughly 47% to 95% lower, both matched by general shape and grade category rather than confirmed dimensions. Fully specification-matched comparisons were limited by 1688's login-gated listings and Alibaba's use of custom-sizing categories for some products; the figures above reflect the closest available matches given those constraints. This isn't just currency conversion or shipping tacked on. One marketplace is priced for domestic buyers, and one is priced for foreign buyers.

This illustrates that China's commercial dominance extends beyond production capacity. Access to the lowest-cost supplier networks often depends on language, local market knowledge, and participation in China's domestic commercial ecosystem, advantages that many foreign buyers lack access to.6 China's market power in critical minerals goes beyond being a supplier and has serious impacts on manufacturers and end users globally. Buyers across electric vehicles, defense, robotics, semiconductors, and renewables all faced the same problem in April 2025: no alternative supplier to turn to. With processing capacity outside China still inadequate, companies couldn't simply switch suppliers, leaving them stuck with production delays or forced to build up costlier inventory buffers instead.7 The impact on global industry is immediately evident. Ford stopped production temporarily at its Chicago plant of the Explorer due to a shortage of rare earth materials, and Suzuki stopped production of its Swift because of a lack of sourcing of its parts. European manufacturers are affected too, with many announcing production delays. Mercedes-Benz has stated that they are stockpiling raw materials to stay ready. While the disruption may directly impact manufacturers in the short term, the ultimate cost is felt by consumers through the unavailability of products, delivery delays, increased production costs, and possibly even higher prices for products such as electric cars, electronics, and renewable technologies. Rather than merely controlling the supply of critical minerals, China's commercial dominance allows disruptions within its supply chain to ripple across global industries and economies.8 The dominance of China in the commercial field regarding critical minerals goes beyond just its processing of those minerals on a global scale; it also includes the dominance it holds in terms of international markets. From determining the availability of suppliers to setting global price signals and influencing the manufacturing of electric vehicles, renewable energy technology, and advanced electronics, China's market supremacy is felt way beyond its borders.

The ongoing governance dispute between the United States and the International Seabed Authority (ISA) over who has the authority to regulate deep-sea mining has attracted sustained attention since the Trump administration’s April 2025 executive order, “Unleashing America’s Offshore Critical Minerals and Resources”9. The order has been widely interpreted as a means of bypassing multilateral frameworks and directs American agencies to expedite the issuance of exploration licenses and commercial recovery permits in the area beyond national jurisdiction (‘the Area’) under the Deep Seabed Hard Mineral Resources Act of 1980 (DSHMRA)10.

While the growing focus on competing unilateral and multilateral approaches to deep-sea mining governance has become the focal point of contemporary debate, it risks obscuring a more durable strategic reality. China and its state-owned enterprises (SOEs) have established commercially significant positions across several stages of the emerging deep-sea mineral value chain. Three dimensions are particularly salient: institutional shaping within the ISA, commercial infrastructure that could provide scalability advantages for future polymetallic nodule supply chains, and concentrated midstream processing expertise. Together, these dimensions constitute structural advantages likely to persist regardless of which governance framework ultimately prevails.

China’s involvement in the ISA derives from its standing as a state party to the United Nations Convention on the Law of the Sea (UNCLOS), which it signed in 1982 and ratified in 1996. Unlike the United States, which is not a party to the Convention, China has participated continuously as an ISA member for three decades11. Over this period, it became one of the Authority’s principal financial contributors, maintained a substantial presence in Council negotiations, and accumulated the largest portfolio of ISA exploration contracts held by any state12. Five of the ISA’s thirty-two contracts are held by the China Ocean Mineral Resources Research and Development Association (COMRA), China Minmetals Corporation, and Beijing Pioneer Hi-Tech Development Corporation, including three exploration contracts in the Clarion-Clipperton Zone (CCZ) for polymetallic nodules rich in manganese, nickel, cobalt, and copper13.

China’s technical cooperation through the ISA-China Joint Training and Research Center in Qingdao14, together with its long-standing contractor status, has generated institutional experience, regulatory familiarity, and legal access to prospective mining areas that would be difficult for later entrants to replicate. Drawing on Evelyn Goh’s concept of institutional shaping, these accumulated structural positions embed Chinese state actors in the agenda-setting processes through which technical standards, regulatory norms, and commercial rules for deep-sea mining are negotiated, most notably in the development of the Mining Code15. This institutional positioning has been evident in practice. In 2023, for example, China “single-handedly” opposed efforts by Chile, France, Palau, and Vanuatu to include a proposal for a precautionary pause on deep-sea mining licenses on the ISA Assembly’s agenda16.

Institutional positioning, however, represents only one dimension of China’s broader commercial advantage. A second concerns the commercial infrastructure and industrial capabilities required to support a future deep-sea mineral production system. Although no integrated commercial production chain yet exists, future mining operations will require the coordination of seabed collection using subsea mining vehicles and vertical lifting systems, topside dewatering, cargo storage, maritime transport, and midstream processing at a commercially viable cost17. China has accumulated capabilities across several of these functions through investment in offshore engineering, maritime logistics, shipping, and port infrastructure. Its large merchant fleet and extensive port network—developed to support China’s terrestrial commodity trade—represent commercially relevant assets that could readily support future deep-sea mineral supply chains18. These capabilities do not guarantee future dominance, but they provide Chinese firms with a favorable commercial position should the industry mature.

The third—and arguably the most consequential dimension—concerns what happens once polymetallic nodules extracted from the CCZ reach land. As with terrestrial mining, extraction and transportation constitute only the initial stages of value creation; it is realized through the metallurgical separation and refining of manganese, nickel, copper, cobalt, and other constituent minerals into industrial feedstocks. While the ISA regulates activities in the Area, including seabed collection, scholarship by Kirchain et al. assumes processing and refining occur on land under the jurisdiction of sovereign states19. Consequently, changes to the governance of extraction need not alter the geography of downstream value creation, which will instead depend on where processing capacity ultimately develops.

Commercial-scale processing of polymetallic nodules remains in its infancy. The Metals Company, through its subsidiary Nauru Ocean Resources Inc. (NORI), demonstrated the smelting of CCZ polymetallic nodules at PAMCO’s existing pyrometallurgical facilities in Japan in early 202520. Indeed, most prospective developers envisage relying initially on existing metallurgical facilities before investing in dedicated processing plants, given the considerable capital expenditure required21. This favors jurisdictions that already possess mature refining industries and metallurgical expertise.

China enters this transition from a position of considerable strength. It possesses extensive expertise in processing many of the principal metals contained in polymetallic nodules. Moreover, even where refining appears geographically diversified, Chinese firms frequently retain ownership over processing assets. The International Energy Agency reports that although Indonesia is now the world’s largest producer of refined nickel, Chinese firms own approximately 65 percent of global refined nickel production through their investments in Indonesian refining capacity22.

Interviews conducted by RAND with representatives from several seabed mining companies reveal a corresponding commercial dilemma. While actively seeking to avoid partnerships with Chinese firms due to concerns about ownership requirements, intellectual property, offtake arrangements, and the implications of the United States’ Foreign Entity of Concern provisions under the Inflation Reduction Act, they also acknowledged that China’s technical expertise and competitive costs could prove difficult to avoid if commercially viable alternatives fail to emerge23. As the report notes, “Given China’s demonstrated technical expertise in mineral processing, a seabed mining program will inevitably be accompanied by a sophisticated and, ultimately, low-cost nodule processing capacity.”24

Taken together, these three dimensions—institutional positioning, commercial infrastructure, and midstream processing—provide China with structural advantages across the emerging deep-sea mineral value chain. For Western policymakers, any meaningful counter-positioning strategy will require investment on a scale that current policy mechanisms do not yet match. While 2019 ISA-commissioned modeling estimates a dedicated processing facility would cost more than “two billion USD to develop and construct”25, financing under the United States’ Defense Production Act projects exceeding at fifty million USD generally require additional congressional authorization26. Since commercial-scale nodule processing has yet to be integrated into any national industrial base, there remains a strategic window to establish alternatives before existing advantages become entrenched; otherwise, deep-sea mining risks replicating the pattern already evident in terrestrial critical mineral supply chains, where much of the strategic and economic value is captured through processing concentrated in China.

Such a concentration in such a volatile and valuable asset is, for the United States, a clear liability. As a holder of legitimacy in the world order, the United States chose, throughout recent history, to deliberately exchange power for legitimacy, creating middlemen in institutions, such as the ISA served, in a more globalized world. It is for this reason the ISA wishes to retain its independent power and authority, even if it is merely a facade- that is the rationale of the vote to ignore the United States. However, this outcome is unlikely. Not all international organizations can enact what they wish; such organizations may hold authority but lack power to make or keep actual change. Authority without the ability to provide the carrot or utilize the stick is simply smoke and mirrors. However, it can insulate its authority through success and an act of denial- the powers that do respect and obey the ISA, after all, not all nations are as powerful as the United States, grant the ISA some legitimacy. The CCZ displays a unique development where the United States prefers power to legitimacy, by using its international power to create its own legitimacy. The ISA is more likely, therefore, to conclude the July 2026 vote with an act to limit this power with its legitimacy. While this addresses and acknowledges the influence of the United States and the minor erosion of the ISA, it also posits an opportunity to reclaim power. What better way to regain relevance, after being sidelined, than to take the world’s hegemon to trial? Such a rationale is one that, if successful, establishes a precedent of power in institutions above nations, as the UN has reflected time and again. The ISA, working under UNCLOS, has legitimate backing. The ISA must weigh the options blatantly- a theoretical, paper monopoly, or a gamble- to try and restrict a superpower, with risk of losing further authority, or gaining significantly more, at a time when it is already slipping away. The path of least resistance is, of course, holding the line; it requires no use of enforcement, of which the ISA lacks the mechanism. Accommodation would require the council to relinquish power in the admission of a legal defeat, publicly- but it could also funnel a path to greater power. It is this gamble, with the backing of UNCLOS and thereby, likely involving an International Tribunal for the Law of the Sea (ITLOS) for resolution. The probability of success, or even the likelihood of this prediction- that an institution has a predisposition for gambling with power- is incalculable, and, should it fail, only bolsters the United States’ authority on the seas. However, if it succeeds, it does set a precedent on authority in the region, and thus a valve on a critical chokepoint for the United States.

China’s dominance in processing, as well as its structural headstart, results in leverage, and a Council seeking to retain power by restricting violators such as the United States, paves a path for arbitrated extraction in the CCZ. A monopoly cannot be granted if the ISA claims this chokepoint as its own domain, to either China or the United States- although this does not resolve China’s preexisting monopoly on processing the rare earth metals extracted. China’s command of downstream processing capacity for cobalt, nickel, copper, and manganese exists today, was built over decades, and will not unwind because a Council vote goes one way or another. Should this prediction be correct, and the ISA moves to counter the US and restrict its claims in the CCZ- thus forcing the world to work under the framework of ISA contracts and DSHMRA permits- or if it is incorrect in this prediction, and the ISA ignores the United States, and hybrid permits are the resolution, the ore itself is not the constrained resource. Rather, it is the ability to process it into industrial quality materials, which, regardless of the outcome of the vote, rests firmly in China’s hands.

It does not matter, therefore, who extracts the minerals, so much as who processes them- the United States can extract all minerals from the CCZ, in theory, only to have to ship them to China for processing, either in China directly or through Chinese-owned assets such as the nickel refineries in Indonesia. In such a way, the United States, aiming to claim the CCZ chokepoint, focuses on the wrong problem. The United States can control all mineral chokepoints in the world and be ineffective if it doesn’t build a singular processing plant- it can turn off the tap of the raw resources, but it can only turn the tap back on with China’s refineries. It is in this type of chokepoint that China holds compounding power, as China holds influence within the ISA, over the span of thirty years as a part of the institutional system. This is reflected best in the agenda-setting and familiarity China holds in the regulations of the ISA. The infrastructure constructed for terrestrial commodity trading serves as a sunk asset, but includes merchant fleets and port networks; the trade that has been established through globalization is weaponized through chokepoints; moreover, it is directly transferable to the CCZ. China, furthermore, is insulated from any external losses of chokepoint leverage because the processing all happens within its reach, without any oversight from the ISA or such international bureaucracy. Put bluntly, China does not need to win the ISA argument or match the United States permit for permit. It only needs the industry, whenever it matures, to still run through processing capacity it already controls.

The primary gap to be filled in response to these unchangeable conditions is the investment scaling. A nation that builds weapons holds power, a nation that builds institutions holds legitimacy, but a nation that builds tools can build both better. It is the US policy tools that are blunted. A single dedicated nodule-processing facility has been estimated at more than two billion dollars to build, while Defense Production Act financing above fifty million dollars requires separate congressional authorization on a case-by-case basis. This signifies that the gap is not a balance sheet, but instead a misalignment between the scale of the industrial base needed and the scale of funding the executive branch can deploy without new legislation. Closing such a gap through a standing authorization process, instead of persistent, repeated one-off requests, is required to streamline the process and, as such, should be a precondition for other tools of response to function. The second gap is that of the ISA-versus-unilateral question of jurisdiction. The United States already traded in its chips of legitimacy for power with the ISA, and although it must bow somewhat to UNCLOS, it imperatively has not ratified it. Therefore, it need not restrict itself to the opinion of organizations it is not a part of; it has sovereignty as a superpower- enforcement has little effect. Should the ISA pursue the United States, as predicted, it still benefits the United States to act in the CCZ- but only temporarily. In the short term, unilateral permits from the US, spurning the ISA, are effective- in the long term, it costs legitimacy. A great nation must balance both power and legitimacy- but strategy plays out across time, space, and scale.. Since the unilateral track is likely to produce extracted nodules first regardless of Council outcome, policy should treat the ISA track as a long-run legitimacy investment worth pursuing in parallel, not abandon it. A US-flagged mining program that never resolves its legal standing under UNCLOS risks winning the extraction race while losing the argument over whether the resulting minerals can move through allied and international supply chains without contestation. Pursuing both tracks simultaneously, rather than betting everything on DSHMRA permits, hedges against that outcome.

The strategy, put simply, is to utilize the short-term to amass power and weaken China’s strongest chokepoint, to gain and retain legitimacy in the long-term, and to manage both actions by utilizing the proper scale of engagement on both issues. In such a way, it becomes not a war on two fronts, but an opportunity for greater strength on both.

No state has integrated, as of the time of writing, commercial-scale nodule processing as a part of its industrial base; the near-term opening therefore is not to out-mine China but to out-process it- to strike where the US is weakest, and China is the strongest, and to invert that dynamic. To build better tools, in other words. The world power the US holds can be utilized to seed allied refining capacity, whether through direct investment, loan guarantees, or offtake agreements structured explicitly to exclude Chinese-linked ownership, before extraction volumes are large enough to make switching processors commercially painful. If and when nodule flows are large enough that existing Chinese-linked facilities are the only economical destination, as has already happened with Indonesian nickel, the opportunity closes. This is why the strategy requires short-term action to amass power; it can only be gained in the present or, through investment, the future- legitimacy can always be attained later; power can not. As such, the United States must focus less on purely extraction rights and the ISA, and instead on constructing a system of processing capacity; to be immune, therefore, like China, to authorities such as the ISA, because the true power is a little higher up the supply-chain; the neck of it, where it is thinnest in options, most critical in its function, and, in other words, is the perfect chokepoint.

Notes & References