• Norway has shelved plans to open a vast ocean area at the bottom of the Arctic for commercial-scale deep-sea mining.
• The decision, which was confirmed late Sunday, comes after the country's Socialist Left Party said it would not support the minority government's budget unless it dropped the first licensing round, initially scheduled for the first half of next year.
• Norwegian Prime Minister Jonas Gahr Støre said the move was a "postponement," while environmental campaigners hailed what they described as a "huge win".

Norway has shelved plans to open a vast ocean area at the bottom of the Arctic for commercial-scale deep-sea mining.

The decision, which was confirmed late Sunday, comes after the country's Socialist Left Party said it would not support the minority government's budget unless it dropped the first licensing round for mineral activities, initially scheduled for the first half of next year.

Environmental campaigners welcomed the agreement as a "huge win" and "a monumental victory for the ocean."

Norwegian Prime Minister Jonas Gahr Støre described the move as a "postponement," Reuters reported Sunday, citing comments delivered to private broadcaster TV2.

Støre leads Norway's center-left Labor Party, which is the senior party in a minority government coalition with the Center Party.

"Our policy is unchanged. The budget agreement is a political compromise that does not affect the legal foundation or strategy for seabed minerals," Astrid Bergmål, state secretary at Norway's energy ministry, told CNBC via email.

"The agreement means that the first licensing round can be announced in the next parliamentary term. Until then, we will use that time to continue research and finalize regulations," Bergmål said.

The planned licensing round only applies to exploration activities, Bergmål added, noting that "it must be shown that the proposed exploitation can take place in a sustainable and responsible manner" before any such work can begin.

Norway has controversially taken a leading role in the process of extracting minerals from the seabed, putting the country at odds with the likes of Germany, Britain, Canada and Mexico, which have all called for a halt to deep-sea mining amid environmental concerns.

The practice of deep-sea mining involves using heavy machinery to remove minerals and metals — such as cobalt, nickel, copper and manganese — from the seabed, where they build up as potato-sized nodules.

The end-use of these minerals are wide-ranging and include electric vehicle batteries, wind turbines and solar panels.

Scientists have warned that the full environmental impacts of deep-sea mining are hard to predict.

Environmental campaign groups, meanwhile, say the practice cannot be done sustainably and will inevitably lead to ecosystem destruction and species extinction.

In a parliamentary vote in January, Norwegian lawmakers voted to open an expansive area of the Arctic — equivalent to the size of Italy — for the exploration of deep-sea mining. It paved the way for companies to apply to mine in the country's national waters near the Svalbard archipelago.

Norway's government said in June that it would start the first licensing round, with the aim of granting the first exploitation licenses early next year.

Sunday's postponement, however, means government parties have agreed to stop the first licensing round from taking place until the end of next year. Norway is scheduled to hold parliamentary elections in September 2025.

'Truly embarrassing'

Norway's government has previously defended its plans to move forward with deep-sea mining, saying it reflects a necessary step into the unknown that could help to break China and Russia's rare earths dominance.

"Any government that is committed to sustainable ocean management cannot support deep sea mining," Haldis Tjeldflaat Helle, deep-sea mining campaigner at Greenpeace Nordic, said in a statement.

"It has been truly embarrassing to watch Norway positioning itself as an ocean leader, while planning to give green light to ocean destruction in its own waters," Helle said.