DeepGreen’s financing follows years of regulatory uncertainty and environmental concerns
Henry Sanderson | Financial Times | 9 June 2019
DeepGreen, a start-up that wants to suck cobalt and other battery metals from the bottom of the ocean, has secured the backing of offshore pipeline company Allseas as part of a $150m funding round.
The financing is a rare sign of progress for deep sea mining after years of regulatory uncertainty and environmental concerns.
Switzerland-based Allseas will provide the bulk of the $150m and contribute engineering expertise, DeepGreen said. The money will enable the company to carry out feasibility studies on how it can suck small metallic rocks containing cobalt, nickel and manganese from the seabed, thousands of metres below the surface.
“Our partnership with Allseas will ultimately help us open up a new, disruptive source of battery metals for the green revolution and transform the mining industry as we know it,” Gerard Barron, the chief executive of DeepGreen, said.
Supporters of deep sea mining say it offers an alternative to land-based mining and can help the world meet an expected surge in demand for metals from batteries over the next decade. More than 60 per cent of the world’s cobalt comes from the Democratic Republic of Congo, while nickel is mined in Indonesia, Russia and New Caledonia.
DeepGreen says the carbon dioxide produced from lifting nodules from the sea floor is lower than land-based mining since the process requires no blasting, drilling or digging.
But critics say mining the deep sea risks destroying sensitive and unexplored habitats at the bottom of the ocean. Environmental group Greenpeace has called for an international agreement to protect the oceans from mining.
“Scientists warn that deep sea mining risks inflicting severe and potentially irreversible harm to ocean ecosystems that we know so little about,” Greenpeace said. “Profit is being placed before protection and we urgently need a strong ‘Global Oceans Treaty’ that safeguards the deep ocean from reckless exploitation by companies such as DeepGreen.”
The first company to attempt to mine the deep sea, Nautilus Minerals, was delisted from the Toronto Stock Exchange in March after financial difficulties. The company had planned to mine the deep sea in waters surrounding Papua New Guinea.
The International Seabed Authority, a UN body that grants licences to mine in international waters, is expected to complete its first set of regulations to enable deep sea mining to go ahead by 2020, according to UK Seabed Resources, a subsidiary of Lockheed Martin.
“Uncertainty in the future regulatory regime for mineral exploitation remains the principal barrier to development of an environmentally responsible and commercially viable deep seabed mining industry,” Christopher Williams, head of UK Seabed Resources, said.
DeepGreen is looking to extract metals in a 75,000 sq km zone in the Clarion-Clipperton Zone in the Pacific, granted to the island state of Nauru.
Allseas is a private company known for having built the world’s largest construction vessel, the Pioneering Spirit, which can install and remove offshore oil rigs in a single lift.