Submarine Miner: The Metals Co.'s remote-controlled collector has already scooped up a thousand tons of potato-sized nodules from the Pacific floor.
COURTESY THE METALS COMPANYGerard Barron’s The Metals Co. has a robot that can scoop up copper, cobalt and other seabed minerals crucial for EV batteries. But first, he needs a ton of nickels to pay for it.
By Christopher Helman, Forbes Staff
Gerard Barron, CEO of The Metals Company, sports a shaggy mop of hair, a rakish beard and a leather bomber jacket with a palm-sized, poly-metallic nodule in its pocket. Aside from setting off metal detectors, the nodule is a good conversation starter, since it was recovered from the Pacific Ocean seafloor, two miles down, where it formed over millions of years by precipitating atoms of metals out of the seawater.
Barron’s nodule is more than a curiosity. Crucially, it contains nickel, manganese, cobalt and copper — all vital to the manufacture of batteries like those that power electric vehicles. Moreover, he says, there are billions of these metal-rich nodules, worth trillions of dollars, just sitting on the bottom of the ocean waiting to be picked up. “This is not like drilling for oil, where it all just turns into carbon dioxide. These metals will be used and recycled,” says the 57-year-old Barron over Zoom from Brisbane, Australia. “We need much more metal as we move to lower-carbon energy, and this is how we can get those metals with the lightest impact.”
CEO Gerard Barron, 57, first invested in deep sea mining in 2001.
Courtesy The Metals CompanyIn 2021, TMC went public on the Nasdaq, via a SPAC called Sustainable Opportunities Acquisition Corp, raising $570 million at a $2.9 billion valuation with the goal of commercially harvesting these rocks. Today the company still has no revenues, while shares have fallen 80%. Last quarter TMC was down to its last $25 million. On Monday, the company announced its full-year 2023 results — which amounted to a total cash burn of $60 million against $20 million raised, and just $7 million left in the bank. After hours, the stock climbed nearly 5% to $1.62 per share, which gives it a market value of just under $500 million.
The good news, such as it is: Barron has options. TMC’s largest shareholders have agreed to loan the company another $45 million — enough to get through one more year of permitting and bureaucracy. Meanwhile, the company says, “discussions with potential strategic partners continue” on monetizing what they figure is the $8.1 billion value of their initial nodule collection site.
The disappointing news: a couple months ago the company was hoping to commence commercial nodule collection in 2025. Given rulemaking bureaucracy, they now say it will be more like mid 2026 before they can deploy the Hidden Gem–a former deep-water drillship for the oil industry, it is 750 feet long and can accommodate 200. Hidden Gem was provided by the Dutch offshore engineering company Allseas, which also built the robotic nodule collector machine that will be lowered down through two miles of ocean to the seabed.
Its initial field of harvest will be in the waters of the world’s polymetallic nodule hotspot, known as the Clarion-Clipperton Zone (CCZ). Sponsored by island nations Nauru, Tonga and Kiribati, TMC has permits to mine 90,000 square miles of seafloor.
In 2022, TMC harvested a boatload of nodules to demonstrate it can be done at scale. The bright yellow collection machine, about 30 feet long, is controlled from the ship, via an umbilical cord. Crawling across the floor, it shoots air jets into the sand to loosen nodules, then sucks them up. Compressors and pumps onboard the ship enable them to suck up the nodule bounty through a tube called a riser.
On the back end, Barron has a deal with Japan’s Pacific Metals Company to process 1.3 million tons a year in its smelter. The products: nickel-copper-cobalt alloy, used to make cathodes for lithium-ion batteries, and silico-manganese alloy, used in steel manufacturing. Glencore, the Swiss mining and commodities trading giant, has agreed to buy the output.
Naturally, some people don’t think seafloor harvesting is a good idea. Like Greenpeace, which last year, sent two kayaks, two boats and a five-person “climb team” to assault TMC’s research ship. A Dutch court ordered Greenpeace International to remove its people from TMC’s ship. “The Greenpeace army created a few problems for us,” Barron acknowledges.
Greenpeace’s objections aren’t frivolous–environmental scientists do worry that harvesting nodules will send up plumes of sediment into the water and kill anything living on the seafloor, such as brittle stars and bizarre sea cucumber species like the one known as the gummy squirrel. Marine scientists and the International Union for Conservation of Nature have called for a deep sea mining ban.
Barron, who claims TMC is years ahead of competitors in developing harvesting tech, laments this green vs. green faceoff. “Tiny minorities isolate good ideas,” he says. The critics of deep-sea mining, he adds, “are wrong on this one like they were on nuclear.”
TMC points to a half-dozen studies going back to work done by the National Oceanic & Atmospheric Administration for Congress in 1984 finding that the impact to sea life would be minimal. That's in large part, says Barron, because the so-called “abyssal plain” of the Clarion-Clipperton Zone is one of the most barren places on Earth — especially when compared with the rainforests of Indonesia, which are now being chopped down to mine nickel. “It makes sense to carry out extractive industries in parts of the planet where there is the least life, not the most life,” he says. “There is the least life to impact where the nodules exist. The sediment resettles.”
Indeed, a 2022 study by researchers from MIT and Scripps Oceanographic Institute found that 90% of the sediment stirred up by a deep-sea mining machine resettles within 100 meters of the mined path.
Barron was running his Australian internet marketing startup Adstream, when in 2001 he decided to invest in Nautilus Resources, run by a friend. It eventually raised hundreds of millions to scrape mineral-rich crusts from the seafloor near Papua New Guinea, where they had been deposited over eons by volcanic vents called smokers. Papua New Guinea's government invested more than $100 million into the plan, which converted the scrapings into a slurry pumped up to a receiving ship, before concluding it was too risky to fisheries. Nautilus went bankrupt in 2019, long after Barron had sold out his stake for some $30 million. In 2011, Barron launched DeepGreen Metals, which eventually morphed into the Metals Company.
The biggest shareholder is ERAS Capital, the family office of the late Silicon Valley pioneer Edward Karkar, with 20%. ERAS has agreed to loan TMC $20 million, as needed. After that comes Edward Hereema, who owns Allseas, the Dutch offshore engineering specialist, which operates the world's largest pipe-laying ships and has spent decades building, installing and later dismantling complex offshore installations for the oil and gas industry. “He could make decisions as the sole owner. He wasn't frightened by the NGO noise,” says Barron. Heerema has agreed to loan another $25 million. (Both unsecured lines remain undrawn as of today.) Allseas has pledged to more than double the annual module harvesting capacity of the Hidden Gem to three million tons per year by the time they get going in 2026. The improved economics of being able to harvest larger quantities is worth modestly extending their timeframe, says Barron.
Seafloor nodules appear to have been first discovered in the 1870s during the scientific voyage of the HMS Challenger. In 1970 a private company, Deepsea Ventures, harvested some off South Carolina. Lockheed Martin studied the phenomenon extensively, looking for a supply of aerospace metals.
Scientists have determined that the nodules start to form when atoms of metal floating in the water precipitate out, often by grabbing onto a piece of shell. The bigger they get (growing at a rate of a half-inch per million years) the more atoms they attract. “The nodules are cleaning the ocean of these metal atoms,” marvels Barron, who believes much of the metal in the CCZ nodules was washed out of mountain ranges like the Andes — home to some of the world’s biggest mines. Location matters above all. “Nodules in the North Sea are not worth picking up.”
The International Seabed Authority is working to finalize rules governing the practice, but TMC claims it’s no longer obliged to wait for them. That’s because more than two years have passed since its sponsoring country, Nauru, invoked the ISA's “two year rule” — limiting bureaucratic delays on mining permits.
Gerard Barron surveys the nodule bounty collected by the Hidden Gem in 2022.
Courtesy The Metals CompanyUnlike tiny Nauru and Kiribati, South Pacific island nations thousands of miles away from the CCZ, the United States does not currently have any nodule collection regions permitted under the ISA because the U.S. Senate since 1994 has declined to ratify the U.N. Convention on the Law of the Sea.
Right wing critics of the U.N. object to the United States ceding sovereignty over the seas to global bureaucrats and reject the need to get anyone’s permission to pick rocks off the seafloor. Yet under the auspices of UNCLOS, ISA has granted nearly two dozen permits, several to TMC, many others to Chinese companies. Meanwhile, America is missing out.
On the other side, in March, Hillary Clinton, Leon Panetta and hundreds more veterans of the diplomatic corps urged the U.S. Senate to ratify UNCLOS. John Negroponte, director of intelligence under President George W. Bush, has been sitting in on ISA rulemaking sessions underway in Jamaica, though without a seat at the table. In an interview with 60 Minutes aired on Sunday, Negroponte argued: “If we’re not at the table and we’re not members of the seabed authority, we are not going to have a voice in the environmental guidelines for deep seabed mining. Well who would you prefer to see writing those guidelines, the Peoples’ Republic of China, or the United States of America?”
Meanwhile, China is moving in, with companies like China Minmetals also pursuing claims in the CCZ, encouraged by Beijing. Several dozen Congressmen are pushing for congress to support efforts of U.S. companies to commercialize deep sea minerals. In December they urged Secretary of Defense Lloyd Austin to act. “We cannot afford to cede another critical mineral resource to China. The United States, and specifically, the Department of Defense, should be engaging with allies, partners, and industry to ensure that China does not seize unfettered control of deep-sea assets.”
Someone is going to pick these things up, says Seaver Wang of the Breakthrough Institute, an environmental research center in Berkeley, Calif. He recently wrote that “we can imagine forms of seafloor nodule collection that tread extremely lightly,” concluding that it’s “not whether humanity should collect deep-sea metals, but rather how.”
However collection technology evolves, Barron is convinced TMC has the best spots, figuring the net present value of the first Nauru mining site alone (known as NORI-D) has a net present value of $8.1 billion. Barron is looking to monetize that, saying that he’ll be “devoting nearly all of my time in the coming weeks” to continuing the “good progress” he’s made in seeking to raise more cash without diluting existing shareholders.
On his wish list: a second production vessel, which could be a twin of Allseas’ Hidden Gem. “In the future we’ll have bigger production platforms,” says Barron. “Right now we’re taking a cookie cutter approach of putting more boats on the water.”
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