Tag Archives: DeepGreen

Deep sea mining start-up secures bulk of $150m funding round

Cut cobalt cathodes. More than 60% of the world’s cobalt comes from the Democratic Republic of Congo © Bloomberg

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.

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Call for Nautilus seabed mining licences to be cancelled in Papua New Guinea

On 21 February 2019, Nautilus Minerals Inc. filed for protection from creditors under the Canadian Companies’ Creditors Arrangement Act.  Whilst claiming this as a victory in their decade-long campaign to stop the Nautilus Solwara 1 Project in the Bismarck Sea, local communities and civil society in Papua New Guinea are taking heed that the fight is not over until all Nautilus licences are cancelled.

“This is very welcome news!” stated Jonathan Mesulam, Alliance of Solwara Warriors whose village on the west coast of New Ireland Province is situated only 25km from the Solwara 1 project. “New Irelanders and communities from Provinces across the Bismarck sea have given their undivided support for many years to stop experimental seabed mining.”

“The longer Nautilus is delayed and tied up in protecting itself from bankruptcy the longer they are in debt and not able to get Solwara 1 up and operating, and the closer we are to stopping the project and protecting our livelihoods and seas.”

“The voices of local communities through the Alliance of Solwara Warriors, Churches and civil society in PNG have consistently opposed Nautilus Minerals,” declared Christina Tony, Bismarck Ramu Group. “We strongly believe this unified voice is what is driving Nautilus Minerals out of our country and towards bankruptcy. Other companies thinking of mining the sea floor in PNG or the Pacific should pay attention.”

The court order under CCAA is an agreement between Nautilus and its two main shareholders, MB Holding & Metalloinvest. Nautilus’ auditor the accountancy firm PwC is acting as court monitors to oversee a plan to sell company assets so Nautilus can either continue as a smaller business or those it owes money to will get the best value if the company goes bankrupt. Nowhere in the court order does it mention the PNG Government who owns a 15% in Solwara 1 and the equipment.

“This small group of key interested players will advantage themselves to the detriment of the PNG Government,” alleged Sir Arnold Amet, former Papua New Guinean Attorney General who has repeatedly warned the PNG Government of the financial liabilities of holding a 15% stake in Nautilus Minerals.

“While this is good news for those of us who have been calling for the project not to go ahead, the fight is not over. Not until the PNG Government terminates the Solwara 1 operating licence, as well as all of Nautilus’ licences in the Bismarck and Solomon Seas, will we be able to claim victory.”

The court order briefly lists three potential legal cases: contract arbitration with Sichuan Hungua Petroleum equipment; Gunner Cooke over legal fees for MAC and the continuing problems with loss of the support vessel; and threatened legal action by MDL Energy over “alleged misleading public disclosure”.

“There appears to be no legal action listed regarding the PNG Government” continued Sir Amet. “Has the PNG Government been ‘taken for a ride’ by Nautilus? Did they ever really intend to mine at Solwara 1? Our Government should explore recouping its failed investment by suing Nautilus for breach of contract.”

Peter Bosip, Executive Director, Centre for Environmental Law and Community Rights, who are supporting the landmark case bought by coastal communities challenging the Solwara 1 project under Sections 51 and 59 of the PNG Constitution[2] claimed, “We have seen the original company directors and officers of Nautilus Minerals walk away with a lot of money in their pockets to form DeepGreen Metals, a company promising riches to other Pacific Island nations.” 

“This is a case of companies mining the market. Whether they have intentions of mining, or not mining the resource, they are cheating the PNG government and its citizens.”

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After the loss of a ship, deep sea mining plans for PNG founder

Marine life in Papua New Guinea. Image by martinnemo via Flickr (CC BY 2.0).

David Hutt | Mongabay | 26 December 2018

  • In 2011, Nautilus Minerals was granted a license to mine precious minerals from the seabed off the coast of Papua New Guinea, the first project in the world to gain deep-sea mining rights.
  • Nautilus said the project would be less destructive than land-based mining, but met with protests due to the potential impact on the complex deep-sea ecosystems as well as coastal communities.
  • A year ago, Nautilus failed to make a payment on a specialized ship being built for the project. Now the ship has been sold to another company, making it unlikely Nautilus will be able to fulfill its mining ambitions.

An ambitious plan to mine precious minerals from the ocean floor off the coast of Papua New Guinea looks to have run aground due to the developer’s financial problems.

In 2011, the government of Papua New Guinea granted Canada-based Nautilus Minerals a 20-year mining license covering roughly 500,000 square kilometers (193,000 square miles) of the Bismarck Sea, off the country’s eastern coast. The Solwara 1 project was the first in the world to be granted rights for deep-sea mining, whereby enormous machines would dig into the ocean floor, harvesting zinc, copper and gold, and other commodities essential to building electrical equipment.

The Papua New Guinea government took on a 15 percent equity stake in the venture with Nautilus, but repeatedly delayed payments as its politicians and citizens protested against the environmental impact of the project, as well as the substantial cost to taxpayers.

In the meantime, Nautilus suffered numerous additional setbacks, including a shortage of investors, a declining credit line, and the decision by multinational mining firm Anglo American to divest from the company.

Now, the company has lost a ship essential to its deep-sea mining plans.

Nautilus chartered Emirati shipping operator MAC Goliath (MAC) to oversee construction of a production support vessel (PSV) designed to collect the extracted materials via pumps from the seabed. This vessel is essential to the entire operation.

The ship was being built at the shipyard of Fujian Mawei Shipbuilding in southern China. In December 2017, MAC missed a payment to the Chinese builder, which Nautilus was also unable to cover. At that point, the vessel was about 70 percent complete.

Late last month, news broke that because of financial woes and missed payments, the shipbuilding company had found a new company to take over the vessel’s construction contract: an Indian firm that is also planning to engage in deep-sea mining explorations on behalf of the Indian government.

Fujian Mawei Shipbuilding announced that the vessel had indeed been sold to the Indian firm, MDL Energy, although Nautilus reportedly thought negotiations were still ongoing. There are reports that Nautilus is attempting to seek new investment so it can reclaim the vessel, but the Chinese shipbuilder maintains that the ship has already been sold.

Mongabay attempted to contact representatives of Nautilus, but emails and telephone calls went unanswered. Nautilus’s interim CEO, John McCoach, told the Economist recently that specifics of the story, as mentioned above, were “not accurate from our perspective.”

Residents of New Ireland province, which lies in the northeast of Papua New Guinea, feared Nautilus’ deep sea mining project could have impacts on coastal marine life. Image courtesy of Google Maps.

It’s not clear how Nautilus will proceed from here, though it appears almost impossible that it will be able to build another tailor-made vessel from scratch, given the firm’s current financial situation. On Dec. 14, the company announced it had received a new loan worth $455,000; the unpaid installment on the PSV exceeded $18 million.

“Given Nautilus’ dire financial circumstances, it is fair to say the game is over,” Helen Rosenbaum, of the Deep Sea Mining Campaign, the author of a major report critical of the project, recently told local media. “The people of the Bismarck Sea of Papua New Guinea have hopefully been spared an environmental disaster.”

“It will be good news for my people if Nautilus goes bankrupt, instead of bankrupting our sea. We will fight this project to the very end,” Jonathan Mesulam, from the Alliance of Solwara Warriors, a community-based organization that opposes the project, said in a press release.

The Solwara 1 project planned to harvest mineral deposits found near seabed hot springs, or hydrothermal vents. Doing so, opponents said, could have had grave effects on rare deep-sea ecosystems.

Nautilus commissioned several environmental impact studies before it was granted the mining license in 2011. “The overall conclusion is that Solwara 1 has the potential for far fewer social and environmental impacts than the existing terrestrial mines examined,” reads one report it commissioned, written by U.S.-based consultancy Earth Economics.

Opponents of the project dismissed these studies as unsatisfactory and misleading, warning that since the Solwara 1 project was the first of its kind and would rely on as-yet-untested technology, it was too soon to say that it would definitely be safer than onshore mining. Moreover, they said the project would almost certainly destroy thousands of hydrothermal vents, each of which is host to complex ecosystems — and possibly species not yet identified by scientists.

Others critics warned that because the proposed extraction site lies only about 30 kilometers (18 miles) from the mainland, it could affect coastal ecosystems and, by extension, the livelihoods of fishing communities on Papua New Guinea.

While the likely demise of Solwara 1 is considered a victory by environmentalists and some residents of Papua New Guinea, the financial problems facing Nautilus are far from advantageous for the poor Pacific nation.

Arnold Amet, a former attorney general, said in a recent press release that because his country had purchased a 15 percent stake in the venture, it would also be responsible for 15 percent of payments to creditors if Nautilus went bankrupt. “I have been warning our Government publicly and privately about the financial mess they will find themselves in when this experimental company fails,” he said.

It’s not clear whether Papua New Guinea will manage to escape this financial burden. Opponents of the project say the government should now annul the concession and cancel all of Nautilus’s permits. But this may not be the end of the region’s underwater mining saga.

DeepGreen, a new deep-sea mining venture founded by Gerard Barron, an Australian entrepreneur who was also the first financial backer of Nautilus (he sold his shares in 2007), is reportedly exploring mining possibilities off the shores of Nauru, a nearby Pacific island. Unlike Nautilus, DeepGreen aims to mine materials from the ocean shore by simply hoovering it up, rather than digging into volcanic rock, ostensibly a less environmentally harmful method of extraction. If Nautilus is unable to fulfill its concession in PNG, then it is possible DeepGreen will fill Nautilus’ shoes as the pioneer of deep sea mining in the South Pacific.

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New deep sea mining venture to launch

International Mining | 10 April 2018

A historic ocean mineral resource expedition, using the Maersk Launcher, launches from San Diego on April 12 to further a mission to responsibly produce the world’s future metal supply from the deep-ocean floor. This is the first of five offshore campaigns that are part of a strategic alliance with Maersk, one of the world’s largest shipping groups.

DeepGreen’s subsidiary, Nauru Ocean Resources Inc (NORI), will be carrying out extensive scientific and resource surveys within a 75,000-km2 contract area of the Eastern Pacific’s abyssal plain, granted to NORI by the United Nations’ International Seabed Authority (ISA). DeepGreen and NORI are developing technology that will allow the responsible production of polymetallic nodules, which sit on the ocean surface, and contain metals in growing demand and critical to global social and economic growth.

The intention is that, when collected and brought to the surface using state-of-the-art technology, the polymetallic nodules — usually small enough to fit in the palm of your hand — will be processed for metals such as cobalt, nickel, copper and manganese. Those future metals are becoming increasingly harder and more difficult to find on land, but are in great demand for technologies such as electric cars, battery storage, wind turbines and many more digital technologies essential to a sustainable future.

“This voyage is a continuation of the work required in preparation of an Environmental Impact Statement that NORI aims to submit to the ISA, a necessary step to move the Exploration license to exploitation license, which will enable NORI to bring these essential metals for our future to the surface where they will be treated onshore using DeepGreen’s patented processing technology, which aims to produce zero waste,” said Gerard Barron, CEO of DeepGreen. “We believe these future metals can be produced responsibly, protecting ocean health, while avoiding the deforestation, pollution and child labor that too often are part of traditional mining.”

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