A mining enterprise that has the backing of the Nauran government has rubbished claims it does not have enough capital to excavate the sea’s floor for well sought-after mineral masses.
The polymetallic nodules form layers of iron and manganese hydroxide that The Metals Company’s chief executive Gerard Barron has previously labelled “a battery in a rock.”
But a New Zealand lawyer, who is acting on behalf of concerned environmentalists in the Pacific, has called into question the proposed operations should the international seabed authority approve it.
The Metals Company is seeking to collect the nodules more than 8000 kilometres from Nauru – in international waters – that would not harm the island’s heavy reliance on income from tuna fishing.
In order to mine the Pacific’s seabed, Nauru Ocean Resources Incorporated (NORI) will act on behalf of the country’s government, who sponsored the company’s actions to the authority.
Despite recent experiences of Papua New Guinea being out of pocket by more than $US108 million after sponsoring another deep-sea mining venture’s failed attempt digging up the mining material, a spokesperson for The Metals Company said NORI is “100 per cent committed to the project”.
The Metals Company has denied the relationship with NORI is a partnership despite being acquired as a subsidiary of Deep Green, The Metals Company’s former name, after merging with Sustainable Opportunities Acquisition Corp.
Mr Barron had previously been in charge of company Nautilus that sunk the Papua New Guinean government into financial trouble before allegedly selling his shares, lawyer Duncan Currie claims.
Financial results for the third quarter ending September 30 on Nasdaq, the US multinational financial services corporation, indicate The Metals Company has raised gross proceeds of $US137.6 million in cash prior to transaction fees and has the total cash equivalent of approximately $US112.6 million.
There was a net loss of $US36.7 million with a large component attributable to accrued expenses related to a pilot mining test system.
The existing cash balance is “expected to be sufficient to fund operations through the third quarter of 2023 when the company intends to submit its application to the international seabed authority,” the spokesperson said.
But Mr Currie, an environmental lawyer who has worked in oceans law for more than 30 years and litigating against seabed mining since 2013, believed The Metals Company is $330 million short.
“They had some large investors pulled out,” Mr Currie said.
“One company was going to put $US200 million, which is no small amount of money by anyone’s reckoning, but they put nothing in, and they pulled out completely.
“Another company was going to put about $20 million while a vast majority of investors have asked for their money back.”
According to Mr Currie, the business case rests on the proposal of the Canadian company to secure only a plan-of-worker contract or, in other words, a licence for commercial deep seabed mining.
The hope to gain that licence by July 2023 before engaging in operations during 2024 remains “very short notice”, Mr Currie says.
“The secretary-general of the seabed authority has said several times that seabed mining could not start for quite a few years,” he said.
“There is no great rush – and he basically rejects the whole idea that these guys could be mining in 2024.
“If that’s true, the whole business case for The Metals Company is shot to pieces if they’re not going to be producing any revenue.”
The first step for seabed miners will be for exploitation regulations to in place after it has permission for exploration to do further research.
The international seabed authority has been unable to discuss the negotiation of mining regulations amid Covid-19 restrictions, but a virtual meeting to discuss plan of action, its roadmap, has triggered a ruling that allows deep-sea mining to be conducted within two years from a July 2021 deadline.
Plans are to lower an 80-tonne collector that is effectively a dredger to suck up 15 centimetres of the ocean floor and doing so suck up the nodules to transport them through tubes, called risers, onto a service ship to be processed.
The return sentiment will be pumped back into the deep ocean.
Mr Currie said scientists believe it will cause irrevocable losses of biodiversity.
“The environment affects are basically the destruction of any sea life on the floor they are mining,” he said.
Claims from the company and others in the industry that the nodules, which in appearance resemble potatoes, were sourced for energy purposes were “just not true”.
“There is no research that shows that there’s not enough minerals on land to supply the renewable energy revolution,” Mr Currie said.
Mr Currie, who has attended the international seabed authority meetings since 2012, represents the Deep Sea Conservation Coalition, an international alliance of more than 60 organisations promoting the conservation of biodiversity.
The prominent counsel in New Zealand has acted against three seabed mining applications and has also faced more than 30 hearing processes.
Two of the applications in more shallow waters of less than 100 metres were rejected while the third was granted before being overturned by New Zealand’s high court.
Mr Currie said giving contracts to seabed mining companies could last up to 50 years.
“Who knows what sort of affect of putting this sort of sentiment plumes and metals in the water for decades is going to be,” he said.
While seabed mining is “highly legal” following two international treaties, the 1994 law and sea convention, in addition to new regulations, Mr Currie warned the process was a “one-way street”.
“Once they are all in place, there is literally no-one to stop it – you can’t turn back,” he said.
“That makes sense when you think about it because these companies will have spent billions of dollars and they are not going to spend that much if there is any doubt at all if they cannot carry on for decades.”