Today, would-be miners, The Metals Company, submitted an updated registration statement to the U.S. Securities and Exchange Commission (SEC).
Businesses are obliged by law to present an honest summary of the potential risks for investors and if businesses are found to have withheld information on the financial risks of their enterprise, they may face legal consequences.
The statement reveals the fragility of the business and the prospective deep-sea mining industry as a whole, and strongly implies that the business (and the industry) may not be viable. It recognizes the certainty of adverse environmental impacts and the lack of scientific understanding of the deep-sea environment.
Key Conclusions
- No seafloor polymetallic nodule deposit has ever been commercially collected, and our offshore collection technology and development plans and processes may not be sufficient to accomplish our objectives.
- We have a limited operating history, and there can be no assurance that we will be able to commercially develop our resource areas or achieve profitability in the future.
- Actual capital costs, financing strategies, operating costs, production and economic returns may differ significantly from those we have anticipated and there can be no assurance that any future development activities will result in profitable metal production operations.
- Some of the offshore equipment that we will need to accomplish our objectives has not been manufactured and/or tested.
- The polymetallic nodules that we may recover will require specialized treatment and processing, and there is no certainty that such processes will result in a recovery of metals that is consistent with our expectations.
- Our business is subject to a variety of risks, some of which may not be covered by our future or existing insurance policies.
- We expect that our losses will continue until we achieve profitable commercial production. Although NORI expects to achieve early-stage commercial production around 2024, there can be no assurance that it will be able to commercially develop these properties or that it will be able to generate profits in the future.
- Mineral resource estimates from the contract areas of NORI and TOML are only estimates. You are cautioned not to assume that all or any part of an inferred mineral resource exists, or that it can be economically or legally commercialized. Uncertainty in our estimates of polymetallic nodule deposits could result in lower-than-expected revenues and higher costs.
- The grade and quality of the polymetallic nodule deposits that we intend to develop are estimates that may prove to be inaccurate, and there are no guarantees that such deposits will be suitable for collecting or commercialization. Our business is subject to significant risks, and we may never develop minerals in sufficient grade or quantities to justify commercial operations.
- The prevailing market prices of nickel, manganese, copper, cobalt, and other commodities will have a material impact on our ability to achieve commercial success. The price of nickel, manganese, copper, cobalt etc has fluctuated widely in recent years.
- We may be adversely affected by fluctuations in demand for nickel, manganese, copper, cobalt, and other commodities. Technology changes rapidly in the industries that utilize our materials. If these industries introduce new technologies or products that no longer require the metals that we intend to collect and process, or if suitable substitutes become available, it could result in a decline in demand for our metal products. Changes in demand for minerals could significantly affect our profitability.
- Negative perceptions related to the collection of polymetallic nodules could have a material adverse effect on our business. Some companies in the EV supply chain have recently expressed reservations about using battery metals derived from deep-sea minerals, pending more research on the impacts of deep-sea mineral extraction operations on marine biodiversity and ecosystem function.
- Operations in the CCZ are certain to disturb wildlife and may impact ecosystem function. Impacts on CCZ biodiversity may never be completely and definitively known. It may also not be possible to definitively say whether the impact of nodule collection on global biodiversity will be less significant than those estimated for land-based mining.
- Parties engaged in collection operations may be required to compensate those suffering loss or damage from nodule collection operations.
- We may become subject to environmental liabilities as a result of noncompliance or newly imposed regulations.
- Compliance with any future laws, rules, regulations, and policies could negatively impact our profitability.