These are the potential dangers in Keppel's first subsea mining project

Does it stand a chance amidst global competitors?

According to DBS, Keppel announced the formation of Ocean Mineral Singapore Pte. Ltd. (OMS), to explore for polymetallic nodules several kilometres beneath the ocean’s surface. 

DBS noted that economic cost has been prohibitive until recent developments of new technology. There is still a lack of international regulatory procedures at this juncture, and like any other mining business, concerns remain on the impact to the marine environment.

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There is still a lack of international regulatory procedures at this juncture, and like any other mining business, concerns remain on the impact to the marine environment.

Subsea mining has only come to the fore in recent years, and there are only a handful of players in this new field with Nautilus Minerals Inc being the most well known subsea miner currently.

Leveraging on Keppel’s many years of offshore and marine experience, and applying its partner's technology to explore for polymetallic nodules in an environmentally responsible way, it stands a chance to emerge at the forefront of the industry should the venture into this area be successful.

This is probably part of Keppel's diversification efforts as offshore & marine business faces keener competition from Chinese and Korean peers.  

We maintain our earnings forecasts as the project is still in preliminary stage pending ISA approval and feasibility studies. It is too early  to judge the new development as we are unsure of the viability of this project and access to details is limited.

It seems to be an exciting opportunity that could aid midto-long term growth of Keppel, though it also comes with higher operational risks. We continue to favour Keppel as the O&M preferred pick for its solid execution track record, global yard network, world-class proprietary designs and R&D capability.