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Extended Timeline Comes with Increased Certainty

The end is in sight. Although July 2023 meetings of the ISA ended without finalizing the international sea mining code, the agency made significant progress on the regulations with members re-committing themselves to complete the work on mining regulations in a timely fashion. The ISA rejected an attempt by a group of nations looking for a long-term moratorium or a ban on undersea mining in international waters. With three meetings scheduled through July 2024, the ISA will continue to work to build consensus and finalize the mining code. Using the time wisely. While the ISA’s failure to finalize the mining code, as was originally intended, may be taken as disappointing news for TMC, the company and its NORI resource sponsoring state, the Republic of Nauru, have elected to use the time to develop a more robust environmental impact study upon ISA recommendation. This will include a campaign at sea to verify seabed conditions at the site of last year’s large pilot run during which more than 3,000 mt of nodules were collected, as well as work with its offshore partner Allseas to optimize the process and equipment needed to begin commercial nodule collection for Project Zero. Application submission is coming. With the ISA’s decision to hold three additional meetings (November 2023, March 2024, and July 2024) to continue working on the mining code, TMC has announced plans to submit a provisional exploitation application to the ISA following the July 2024 meetings with the intention of getting into commercial production in 4Q25. Factoring in approximately a year for the ISA to review the application and issue a provisional approval implies the application will be submitted by TMC and its partners in 3Q24. Upgrading Project Zero capabilities. Originally envisioned as a 1.3 million metric ton annual collection capacity, TMC announced that lessons learned from the large-scale pilot project conducted in 2022 have allowed it and its offshore partner Allseas to upgrade the projected annual production of Project Zero to 3 million metric tons, a 130% increase, while also reducing the project’s environmental impact. Sufficient financial resources to complete the application. The environmental study and other costs associated with the pending exploitation application will require $60-$70 million. With $20 million of cash on hand, an undrawn credit line of $25 million, and a $30 million ATM program, TMC appears to have sufficient liquidity to deliver an application to the ISA.