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Deep sea miner forecasts production in two years

Kitco News

Deep sea minerals company The Metals Company has over $500 million pipeline to fund the company through to small-scale commercial production, said CEO Gerard Barron who spoke to Kitco on Thursday.

The Metals Company was formerly named DeepGreen.

A March financing valued the company at about $2.9 billion. Barron told Kitco he sees around $570 million total from the raise that will fund the company.

The Metals Company plans to collects polymetallic nodules containing cobalt, nickel, manganese and copper from the ocean floor. The company said production is expected to commence in 2024 from its NORI Area D block in the Pacific Ocean. The Metals Company is forecasting close to $2 billion in EBITDA in 2027.

The nodules overlap with most of the metals forecast to be in high demand due to electric vehicle production. Copper, cobalt and nickel have all seen recent price spikes.

Copper hit it's 10 year peak in February when it pushed over $4.30 a pound. Copper is being driven higher by the EV story and government infrastructure stimulus, as well as some catch up due to 2020 slowdowns.

There has been push back on ocean mining. In early April the World Wildlife Fund announced that Google, BMW, Volvo, and Samsung SDI all signed up to call by the WWF asking for temporary ban on deep-sea mining. The WWF said the impacts are unknown given the depths that The Metals Company and other deep sea ocean miners are operating. The polymetallic nodules targeted by The Metals Company are sitting on top of the ocean floor at a water depth of 4,000 to 5,000 meters. The area where the nodules are found is the Clarion-Clipperton Zone, an area in the Pacific between Mexico and Hawaii.

The Metals Company countered they are are approaching their work with an "...exacting commitment to science-based impact analysis and environmental protection." The Metal Company favaroably compares ocean mining to existing mining practices, which involve tailings and open pits. The Metals Company said their process largely eliminates many of mining's harmful impacts.

On Kitco Roundtable, the CEO of Excelsior Mining, Stephen Twyerould, said there will be growing pressure to access metals as the population grows.

In December Twyerould's Arizona-located in-situ copper mine, which also required no pits or tailings, produced its first copper cathode. Twyerould said The Metals Company may have its work permits, but getting its social license could still be years away. But the marketplace is clamouring for these metals.

"You're going to need some of these commodities as the population grows. It's just a matter of time. Whether it's the right time now or whether it's just going to take a lot longer, I'm not sure," said Twyerould.

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