Sunday, April 25, 2021

Wannabe Seabed Miner DeepGreen Has Entered Into An Agreement To Come Public Via SPAC (SOAC)

 I know the FT's natural resources editor is not very impressed with either the economics of seabed mining or the PR techniques employed when some corporates said nein to the idea of said mining:

So it is with some trepidation that we even post this much less acknowledge an interest in the concept. And that is with having gone one record saying:
June 2020
"A billion batteries’ worth of rare metals lie on the bottom of the sea"
And we don't know what happens when we roil up the seabed.
E to the S to the G, it's complicated....  

It's just that the backers of this one might be able to pull it off.

First up, the press release, April 15: 

SOAC Files Registration Statement on S-4 in Connection with Proposed Combination with DeepGreen Metals, Explorer of the World's Largest Undeveloped Resource of Battery Metals for EVs

  • Form S-4 filing with the SEC provides information about DeepGreen for current and prospective investors in advance of the combined company’s public listing as The Metals Company
  • Transaction combines the first ESG-focused SPAC with a company exploring the world’s largest estimated source of electric vehicle (EV) battery metals from deep-sea polymetallic nodules that are expected to be produced at low cost with dramatically reduced social and environmental impact as compared to land-based mining
  • The transaction represents a pro forma equity value of US$2.9 billion (assuming no redemptions) for the combined company, which will be renamed The Metals Company upon closing

DALLAS, Texas & VANCOUVER, British Columbia--()--Sustainable Opportunities Acquisition Corporation (NYSE: SOAC) announced that it has filed a registration statement on Form S-4 with the U.S. Securities and Exchange Commission. The filing includes a preliminary proxy statement/prospectus in connection with SOAC’s proposed business combination with DeepGreen Metals Inc., a company exploring for lower-impact battery metals from polymetallic nodules lying on the seafloor.

DeepGreen recently announced its entry into a definitive business combination agreement with SOAC, a special purpose acquisition company with a dedicated ESG focus and deep operational and capital market capabilities in the energy and resource sectors. DeepGreen is exploring a new, scalable source of battery metals in the form of polymetallic nodules which are found in the Clarion Clipperton Zone of the Pacific Ocean. The estimated battery metal resource on the seafloor in the exploration contract areas held by DeepGreen’s subsidiaries is equivalent to that contained in 280 million EVs —approximately one quarter of the current global passenger vehicle fleet.

“We anticipate that The Metals Company will successfully scale to meet the expected deficit in electric vehicle battery metals that presents the biggest hurdle to the mass electrification of transportation,” said Scott Leonard, CEO of SOAC. “We look forward to advancing toward listing The Metals Company as a key part of our objective to become the world’s largest producer of critical battery minerals like nickel, copper and cobalt with the lowest ESG impact and production cost.”...

....MUCH MORE

Okay, that headline is a bit wordy. And that first paragraph containing "lower-impact battery metals from polymetallic nodules lying on the seafloor." sounds like a high school debater trying to head-off an argument against; what with the implicit comparison to land based mining for these metals (lower impact). And the note that the nodules are lying on the seafloor, not under a mile of primordial muck that has to be moved. But still....

We first became aware of this one going-on nine years ago:

June 2012
Screw the Asteroids: "DeepGreen strikes deal with Glencore for undersea mining metals"
What...the...hell?
I'm a bit late getting to this but when you see "Glencore" and a privately held Vancouver company in the same headline it gets my attention....
 
And kept track of what they were doing:
 
And then in March 2020 a third heavyweight (literally) that had kicked in some loot for the 2019 financing:
 
So there you have the shipping company with the greatest enviro cred (Maersk), the mining and metal trading company with no enviro cred but money and experience in spades (Glencore) and the pipelaying/oil rig moving/what's the job we can do it engineering company. I have to admit I have a soft spot in my head heart for Allseas. When  oil rigs got bigger than was easily manageable, Allseas founder said "okay, so what if we strap a couple oil tankers together:
 
Pioneering Spirit Sets World Lifting Record
The giant offshore installation and commissioning vessel Pioneering Spirit has set the new world lifting record with the successful removal of Shell’s 24,000 tonne Brent Delta platform in the North Sea in a single lift.
http://3kbo302xo3lg2i1rj8450xje.wpengine.netdna-cdn.com/wp-content/uploads/2017/04/08-Fast-lift-of-the-Delta-topsides-800x600.jpg
 Lifting of the Delta topsides. Credit: Allseas
Pioneering Spirit’s owner Allseas confirmed the safe and successful completion of the topsides removal operation on April 28....
Allseas CEO said the $3 billion cost of Pioneering Spirit was one of the larger bets of his career, raising the question "What other freakin' bets have you laid down to make this 'one of the'" 

We'll circle back to Mr. Hume for the outro, beaucoup credit where credit is due. He was the first source for the financing news:
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