TMC Commends U.S. Congress on Bill to “Provide Financial, Diplomatic, or Other Forms of Support for Seafloor Nodule Collection, Processing and Refining” and Advancing International Regulations for Seafloor Resources
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The introduction of the Responsible Use of Seafloor Resources Act (RUSRA) represents a significant strategic shift in the United States' approach to securing critical minerals essential for the energy transition and national defense. The act's emphasis on domestic infrastructure development for refining polymetallic nodules into critical minerals could potentially reduce the country's reliance on foreign sources, particularly from nations considered adversarial. This move aligns with broader economic trends towards supply chain resilience and mineral independence, which are pivotal in the context of geopolitical tensions and the push for clean energy technologies.
From an economic standpoint, the bill's support could stimulate domestic job creation and industrial growth within the mining and processing sectors. However, the initial capital outlay and the time required to establish this new supply chain could be substantial. The long-term economic benefits, including potential trade balance improvements and increased competitiveness in the clean energy sector, must be weighed against these upfront investments. Furthermore, the act's focus on reducing environmental, social and governance (ESG) impacts could position the U.S. as a leader in responsible mining practices, potentially setting a new global standard for environmental stewardship in the mining industry.
The RUSRA's endorsement by a broad coalition, including industry leaders and research centers, underscores the growing recognition of environmental implications associated with critical mineral extraction. By mandating 'responsible polymetallic nodule collection,' the legislation appears to address concerns over the environmental impact of seabed mining, a relatively unexplored method of resource extraction. The environmental policy community will be closely monitoring the implementation of these responsible collection practices, as the extraction of seafloor nodules has the potential to disrupt marine ecosystems.
While the act may reduce the U.S.'s ecological footprint related to terrestrial mining, the long-term effects of seafloor mining are not yet fully understood. As such, the commitment to quantitatively reducing ESG impacts suggests a precautionary approach to this emerging industry. The policy's implications on international environmental standards and the potential for the U.S. to lead in sustainable mining practices could have far-reaching effects on global environmental policy, particularly within the context of the energy transition and the critical need for battery metals.
The RUSRA could have a pronounced effect on the market for critical minerals, particularly for those used in battery production such as nickel, cobalt and manganese. The act's potential to establish a new source of these minerals through seafloor nodules addresses a critical bottleneck for the burgeoning electric vehicle (EV) and renewable energy sectors. By potentially increasing the supply and diversifying the sources of these minerals, the legislation might alleviate some of the supply constraints and price volatility that have plagued these industries, especially in the wake of the Russia-Ukraine conflict and its impact on nickel prices.
For investors and companies in the clean energy and defense sectors, the act's passage could signal greater stability in the supply chain and possibly lower input costs over time. However, the transition to a new supply chain comes with risks, including market acceptance, technological feasibility and the regulatory approval process for seafloor mining operations. The success of this initiative will hinge on the ability of companies like TMC to effectively extract and process these nodules while adhering to the responsible environmental standards set forth by the legislation.
- The Responsible Use of Seafloor Resources Act (RUSRA) calls for U.S. support for ‘responsible polymetallic nodule collection’ and the use of federal funding to establish domestic infrastructure to refine nodules into critical minerals for the energy transition and national defense.
- The legislation comes as American and allied auto and battery makers struggle to secure supplies of critical battery metals that comply with guidelines for incentives under the Inflation Reduction Act, while metals demand for infrastructure and development continues to grow.
- The bill is endorsed by a coalition of leaders across the offshore energy industry, marine mineral exploration, and global research centers.
NEW YORK, March 13, 2024 (GLOBE NEWSWIRE) -- TMC the metals company Inc. (Nasdaq: TMC) (“TMC” or the “Company”), an explorer of the world’s largest estimated undeveloped source of critical battery metals, today welcomed the introduction of legislation by members of the House of Representatives calling for the U.S. to “support international governance of seafloor resource exploration and responsible polymetallic nodule collection by allied partners” and to “provide financial, diplomatic, or other forms of support for seafloor nodule collection, processing and refining.”
Sponsors of the bill, entitled the Responsible Use of Seafloor Resources Act (RUSRA), find that the “United States is falling behind in competitiveness within supply chains for critical defense and clean energy technologies”, and recognize that “the collection of seafloor nodules is integral to ensuring the United States does not continue its over-dependence" on adversarial nations.
Gerard Barron, Chairman and CEO of The Metals Company, said, “With commercial deep-sea nodule operations expected to begin soon, Congressional action to lay the foundation for processing and refining this remarkable resource is a game-changer. Additionally, we eagerly await the forthcoming Pentagon report on nodules as directed by the House Armed Services Committee. The Pentagon’s ability and willingness to support a feasibility study for a domestic refinery could help establish mineral independence for the U.S. in nickel, cobalt and manganese. The rising wave of support within Congress gives me confidence that there are multiple pathways for the country to support and potentially fund allied supply of nodule-derived critical minerals.”
The bill, introduced by Representatives Carol Miller (R-WV) and John Joyce (R-PA), notes: “Investing in the development of mineral resources and processing infrastructure quantitatively proven to reduce ESG impacts, such as seafloor nodules, is integral to ensuring the raw materials that underpin our domestic industrial base and transition to clean energy do not have adverse planetary impacts.”
In addition to TMC, the bill is endorsed by the National Ocean Industries Association, the Breakthrough Institute, the Critical Ocean Minerals Research Center, Deep Reach Technology, Kingston Process Metallurgy Inc., Global Seabed Resources NV, Ocean Minerals LLC, Odyssey Marine Exploration, Inc. and Moana Minerals.
Over recent years, TMC has welcomed letters from congressional leaders including the House Armed Services Committee as well as former military leaders urging the Biden Administration to assess domestic processing of seafloor polymetallic nodules as a means to secure key energy transition metals and “close national security vulnerabilities.” In March of 2022, TMC Chairman and CEO Gerard Barron wrote to the Senate Energy and Natural Resources Committee, noting, “It is a geological reality that there are insufficient U.S. reserves of nickel, cobalt, and manganese to support lithium-ion battery production at scale, and that recycling will not be able to meet demand in the mid-term. TMC can provide access to enough in situ resource to fully electrify the U.S. passenger fleet (280 million EVs).”
In July of 2022, Secretary Granholm of the US Department of Energy advised, "For nickel and certain other minerals, such as manganese and cobalt, the presently known U.S. reserves and known resources fall short of satisfying projected domestic demand to meet decarbonization goals. For nickel specifically, Russia’s footprint in the nickel market and the subsequent price spikes related to the Russia-Ukraine conflict have reinforced the importance of establishing a strong domestic supply, processing, and refining base for economic development and national security. "
The newly introduced Responsible Use of Seafloor Resources Act aims to ready the United States for the commercial availability of seafloor nodules, an abundant source of critical minerals.
About The Metals Company
The Metals Company is an explorer of lower-impact battery metals from seafloor polymetallic nodules, on a dual mission: (1) supply metals for the global energy transition with the least possible negative impacts on planet and people and (2) trace, recover and recycle the metals we supply to help create a metals commons that can be used in perpetuity. The Company through its subsidiaries holds exploration and commercial rights to three polymetallic nodule contract areas in the Clarion Clipperton Zone of the Pacific Ocean regulated by the International Seabed Authority and sponsored by the governments of Nauru, Kiribati and the Kingdom of Tonga. More information is available at www.metals.co.
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Forward Looking Statements
This press release contains “forward-looking” statements and information within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as “aims,” “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “plans,” “possible,” “potential,” “seeks,” “will” and variations of these words or similar expressions, although not all forward-looking statements contain these words. Forward-looking statements in this press release include, but are not limited to, TMC’s expectations with respect to the U.S. Senate’s ratification of UNCLOS. The Company may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements, and you should not place undue reliance on these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements as a result of various factors, including, among other things: the Company’s strategies and future financial performance; the International Seabed Authority’s (“ISA”) ability to timely adopt the Mining Code and/or willingness to review and/or approve a plan of work for exploitation under the United Nations Convention on the Laws of the Sea (UNCLOS); the Company’s ability to obtain exploitation contracts or approved plans of work for exploitation for its areas in the Clarion Clipperton Zone; regulatory uncertainties and the impact of government regulation and political instability on the Company’s resource activities; changes to any of the laws, rules, regulations or policies to which the Company is subject, including the terms of the final Mining Code, if any, adopted by ISA and the potential timing thereof; the impact of extensive and costly environmental requirements on the Company’s operations; environmental liabilities; the impact of polymetallic nodule collection on biodiversity in the Clarion Clipperton Zone and recovery rates of impacted ecosystems; the Company’s ability to develop minerals in sufficient grade or quantities to justify commercial operations; the lack of development of seafloor polymetallic nodule deposit; the Company’s ability to successfully enter into binding agreements with Allseas Group S.A. and other parties in which it is in discussions, if any; uncertainty in the estimates for mineral resource calculations from certain contract areas and for the grade and quality of polymetallic nodule deposits; risks associated with natural hazards; uncertainty with respect to the specialized treatment and processing of polymetallic nodules that the Company may recover; risks associated with collective, development and processing operations, including with respect to the development of onshore processing capabilities and capacity and Allseas Group S.A.’s expected development efforts with respect to the Project Zero offshore system; the Company’s dependence on Allseas Group S.A.; fluctuations in transportation costs; fluctuations in metals prices; testing and manufacturing of equipment; risks associated with the Company’s limited operating history, limited cash resources and need for additional financing; risks associated with the Company’s intellectual property; Low Carbon Royalties’ limited operating history and other risks and uncertainties, any of which could cause the Company’s actual results to differ from those contained in the forward-looking statements, that are described in greater detail in the section entitled “Risk Factors” in TMC’s Annual Report on Form 10-K for the year ended December 31, 2022, filed by TMC with the Securities and Exchange Commission (“SEC”) on March 27, 2023, as updated and/or supplemented by TMC’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed with the SEC on August 14, 2023, and in TMC’s other future filings with the SEC, including TMC’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed with the SEC on November 9, 2023. Any forward-looking statements contained in this press release speak only as of the date hereof, and the Company expressly disclaims any obligation to update any forward-looking statements contained herein, whether because of any new information, future events, changed circumstances or otherwise, except as otherwise required by law.
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