Greens question the financial information of deep-sea miners

Greens question the financial information of deep-sea miners

In March, DeepGreen announced plans to go public on the Nasdaq stock exchange by merging with an already-listed shell corporation known as a special purpose acquisition company.

Canadian firm DeepGreen Metals Inc. wants to delve 3 miles below the surface of the Pacific Ocean to collect potato-sized rocks off the seafloor that contain nickel, cobalt, copper and manganese, all of which are key components of electric vehicle batteries.

Highlights

  • Greenpeace and other groups say that DeepGreen has not been forthcoming about the potential environmental impacts of mining the deep sea in their disclosures to the U.S. Securities and Exchange Commission.

  • The increasingly popular process allows speculative companies that have never generated revenue to access the stock market while avoiding some regulatory hurdles associated with a traditional initial public offering.

DeepGreen, which will become known as The Metals Co. after its public listing, says seabed mining is the most sustainable way to source metals for clean energy technologies.

And the Campaign for Accountability, a transparency nonprofit, told the SEC yesterday that the company hasn’t divulged the “material background information and litigation histories” of DeepGreen’s leadership.

It has three contracts to explore the ocean floor issued by the International Seabed Authority, a United Nations body based in Jamaica that is drafting the first-ever international deep-sea mining rules.

DeepGreen says its exploration areas, sponsored by Pacific nations Nauru, Tonga and Kiribati, contain enough nodules to electrify 280 million EVs, or a quarter of the world’s passenger fleet. A polymetallic nodule is “a battery in a rock,” it says.

In a complaint to the SEC earlier this month, Greenpeace, the Deep Sea Conservation Coalition and Global Witness said DeepGreen has downplayed the potential environmental impacts and “threatened to mislead the investing public concerning the future profitability of the company.” “Our primary concern is that DeepGreen’s untested plans to mine the floor of the deep ocean present enormous environmental risks, and that the company’s representations about how it is going to be able to manage these risks have lacked credibility,” the letter says.

The nodules lying on the seafloor have their own ecology, the groups say. Formed over millions of years, any disruption to these ecosystems by sucking up rocks with a vacuum-like machine could cause species — some of which may still be undiscovered — to go extinct, the groups warn. Hundreds of scientists and major companies like BMW Group and Google have called for a deep-seabed mining moratorium until more is known about the practice’s environmental impact (Greenwire, March 31).

DeepGreen did not respond to a request for comment. The company contends that extracting minerals from the seafloor is less harmful than traditional mining and will be a crucial source of metals that could become scarce as nations transition away from fossil fuels. “Consumer brands that refuse to consider alternative mineral supplies will be complicit in increased deforestation, toxic tailing, child labor (in the case of cobalt), and destruction on terrestrial habitats and carbon sinks,” the company wrote in response to calls for a moratorium.

‘A checkered past’ Campaign for Accountability examined the histories of DeepGreen’s leaders, including CEO Gerard Barron, in its complaint to the SEC yesterday.

“Impacts on biodiversity and the ocean ecosystem cannot, and may never be, completely and definitively known,” the company said. In a June 22 securities filing, two months after its initial disclosures, DeepGreen told investors that it’s unclear how its business could affect the environment because so much of the area it plans to mine is unexplored.