MAC/20: Mines and Communities

Concerns that deep sea mining company DeepGreen will go public via merger

Published by MAC on 2021-03-09
Source: Deep Sea Mining Campaign, Reuters

Greenwash + Blank Cheque company ≠ Environmental, Social, and Corporate Governance

The deep sea miner (who brand themselves as anything but), DeepGreen, will be going public c/o a merger with a so called 'sustainable' investment vehicle Sustainable Opportunities Acquisition Corp (SOAC). The new company will call itself the 'Metals Company'.

See also:

2020-12-18 Secretive ‘gold rush’ for deep-sea mining dominated by handful of firms, report

2019-07-30 New report damns deep-sea mining

2019-07-21 Why the rush to mine the seabed?

 

DeepGreen Metals attempts environmental facelift to boost lagging investment 

Deep Sea Mining Campaign & MiningWatch Canada press release - http://www.deepseaminingoutofourdepth.org/wp-content/uploads/MR_GreenwashBlankCheque%E2%89%A0ESG-2.pdf

5 March 2021

In a further attempt to distance itself from the significant environmental and social costs of deep sea mining, DeepGreen Metals merged with a special purpose acquisition company (SPAC) called Sustainable Opportunities Acquisition Corp (SOAC).  Hard facts refute the claims of the new entity, The Metals Company, that it will promote sustainable development and is an Environmental, Social and Corporate Governance (ESG)-compatible investment.

Andy Whitmore, Finance campaigner, Deep Sea Mining Campaign stated, “there is nothing sustainable about the business model or the extractive mining process proposed. The information released by DeepGreen via its merger with SOAC raises questions about the viability of this new venture in a high-risk, experimental industry. The risks identified by DeepGreen and SOAC include uncertainties about fundamental nuts and bolts aspects such as the commercial and technical feasibility of seafloor polymetallic nodule mining and processing; the supply and demand for battery metals; the future prices of battery metals; the uncertainty in mineral resource estimates.” 

Mr. Whitmore continued, “This public float is very similar to the method that the now bankrupt deep sea miner Nautilus Minerals used to register on the Toronto Stock Exchange.  DeepGreen founders, Gerard Barron and David Heydon were early investors in Nautilus who departed prior to the company’s downturn in fortunes,  which left the Papua New Government and other investors in debt. This method of public listing not only ensures less transparency, but is also typical of start-up mining companies, despite all the green spin”.
 
Dr. Helen Rosenbaum, Coordinator, Deep Sea Mining Campaign explained, “Let’s be very clear, DeepGreen Metals is a start-up mining company with an ambitious agenda to make BIG money as quickly as possible regardless of the social and environmental impacts. Describing itself as ‘a developer of lower impact battery metals’ is ludicrous greenwashing. Metals are not ‘developed’, they are mined. DeepGreen under its new moniker - The Metals Company - plans to mine unique biodiverse deep sea ecosystems that are largely still unknown to science.”

There are currently no operating deep sea mining projects in the world and environmental concerns are being raised by internationally recognised scientists and civil society across the globe. The more we explore the deep sea the more we are learning of the complex eco-systems that exist. There is currently no way to assess the environmental or social impacts of deep sea mining which is why over 90 organisations and individuals worldwide are calling for a moratorium and others, including Sir David Attenborough, are calling for a ban on deep sea mining.

Dr Catherine Coumans, MiningWatch Canada argued, “The rocks that DeepGreen ‘The Metal Company’ plan to mine have taken millions of years to form and host diverse and unique life forms. Scientists warn that the destruction of this seabed ecosystem will affect the health of our oceans and planet. They predict that the impacts would be extensive, severe and last for generations.”

“Based on the science, the United Nations Environment Program (UNEP) has just released practical guidance for finance institutions on sustainable ocean finance.  Investors should note that this UNEP guidance is clear in its exclusion of deep sea mining as a sustainable option,”  continued Dr Coumans.

Dr. Rosenbaum concluded: “ESG and Impact Investors should take a serious look at alternatives to mining virgin metals. A new wave of urban mining companies is on the cusp of supplying minerals with simple, low-cost technologies, flexible scales for diverse locations, and win-win social and environmental outcomes. The scope to produce metals in this manner is immense and recession proof – not only from the huge global stockpiles of electronic wastes but also from existing mine tailings wastes. Investments in deep sea mining might well end up being stranded assets.”

MORE INFO

Andy Whitmore, United Kingdom
+44 7754 395597, whit@gn.apc.org

Catherine Coumans, Canada
catherine@miningwatch.ca, +1 613-256-8331,

Helen Rosenbaum, Australia
+61 413 201 793, helen.rosenbaum1@gmail.com


EV battery metals firm DeepGreen to go public in SPAC deal

By Melanie Burton

https://www.dailymail.co.uk/wires/reuters/article-9328727/EV-battery-metals-firm-DeepGreen-public-SPAC-deal.html

4 March 2021

MELBOURNE, March 5 (Reuters) - Canada's DeepGreen Metals Inc, which aims to produce metals for use in electric vehicle batteries through deep-sea mining, plans to go public in a merger with a special purpose acquisition company (SPAC).

The deal with U.S.-based Sustainable Opportunities Acquisition Corp will value the combined entity at $2.9 billion and include a $330 million infusion from investors including Allseas Group SA, Maersk Supply Service and Glencore, DeepGreen said in a statement on Thursday.

The merger is expected to be completed in the second quarter, it said.

Vancouver-based DeepGreen intends to produce from 2024 metals from polymettalic rocks, found deep in the Pacific Ocean, for use in batteries that will power electric vehicles (EVs).

The method it will use is deep-sea mining, which critics say is an untested mining method with a largely unknown environmental impact.

Australia banned seabed mining off part of its northern coast last month, citing the potential impact on the environment.

Greenpeace has stepped up its advocacy against the activity in recent months. It is calling on global governments not to sponsor any deep seabed mining, related research or exploration, and to halt development of a mining code under the International Seabed Authority.

"There is nothing sustainable about carving up the seafloor for mining," Greenpeace spokeswoman Nelli Stevenson said, when asked about DeepGreen's mining plans.

"The deep ocean must remain off-limits to the mining industry to prevent further biodiversity loss and potentially damaging a critical carbon sink."

DeepGreen did not immediately respond to a request for comment.

Last year, it bought out part of Nautilus, a company that planned to mine the seafloor but ended up going into liquidation.

Shares of Australian investment firm Cadence Capital Ltd , which owns a 2.8% stake in DeepGreen, rose as much as 15.7% on Friday to their highest in more than two years. Cadence said the listing would boost the net tangible assets of its shares.

Sustainable Acquisition Corp, a so-called SPAC, raised $300 million in an initial public offering in May last year.

SPACs are shell companies which raise funds to pursue an acquisition at a later date. The deals are an alternative to a traditional IPO for companies looking to enter public markets.

The combined entity will be called The Metals Company and will be listed under the ticker symbol "TMC".

Nomura Greentech and Citi are the financial advisers to DeepGreen and Sustainable, respectively.

(Reporting by Sohini Podder and Rithika Krishna in Bengaluru; Editing by Shailesh Kuber and Muralikumar Anantharaman)

 

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