13. Deep Dive into EV Resources

In this engaging episode of the Insiders Guide to Energy podcast, hosts Chris Sass and Niall Riddell welcome Gerard Barron, the dynamic CEO & Chair of The Metals Company. This insightful conversation dives deep into the burgeoning field of deep-sea mining, a critical component of the global shift towards electric vehicles. Gerard Barron offers a compelling narrative about The Metals Company's decade-long journey in pioneering the extraction of polymetallic nodules from the ocean's abyssal zone. Situated an astounding 4,000 meters below the sea level and 1,000 miles off the Mexican coast, this venture stands at the forefront of sustainable resource utilization. This episode promises to enlighten listeners on how these efforts are shaping the future of renewable energy and electric vehicle production.

The discussion unfolds around The Metals Company's innovative approach to harvesting these ocean-floor treasures. The company's commitment to environmental stewardship is evident in its comprehensive environmental assessments and the use of advanced technology. This venture is more than just mining; it's an ecological endeavor, balancing the need for essential resources with the imperative of minimizing our environmental footprint. The episode offers a rare glimpse into how robots are employed in these extreme depths to gather nodules, each a rich source of essential metals like Nickel, Copper, Cobalt, and Manganese. These metals are integral to the production of high-efficiency batteries, marking a significant stride in the electric vehicle revolution.

Listeners are invited to immerse themselves in a narrative that interweaves the complexities of politics, economics, and cutting-edge technology. The conversation also delves into the geopolitical aspects of resource control, touching on the critical role of these metals in global markets and the intricate dynamics of international relations and environmental policy. This episode is a must-listen for anyone interested in the intersection of technology, sustainability, and the future of transportation. Join us for a riveting exploration of the depths of ocean mining and its profound impact on our transition to renewable energy.

https://www.linkedin.com/in/gerardbarron/ 

Transcript

Transcript 

00:00:04 Speaker 1 

Broadcasting from the commodity capital of the world, Zurich, Switzerland, this is insiders guide to energy. 

00:00:20 

Addition to insiders guide to energy is brought to you by Fidectus. 

00:00:24 

Go to www.Fidectus.com For more information. 

00:00:59 Speaker 2 

This episode of Insiders Guide to Energy EV Miniseries is powered by Paua. Paua helps your business transition to electric vehicles by simplifying charging, managing payments, and optimizing your charging data. Welcome to insiders guide to Energy EV miniseries with me today is Niall Riddell. 

00:01:17 Speaker 2 

My co-host and this is Chris Sass. Niall, this is going to be an amazing episode. 

00:01:21 Speaker 3 

Yeah, this this one's gonna be one of the ones where I think we can have a lot of questions to ask because it's an area that I'm quite unfamiliar with. But clearly as we explore what electric vehicles are doing as we transition mobility to lower forms of carbon, what we're suddenly realizing is that batteries are fundamentally important to that. And in those batteries. 

00:01:42 Speaker 3 

Stacked up with a range of different metals, so we're going to be talking a little bit about those metals. Where do they come from? How do we get them? And we're going to take you on a little bit of an adventure at Joules, Verne style adventure to discover where. 

00:01:54 Speaker 3 

We're getting some of these metals from. 

00:01:57 Speaker 2 

Well, I I I am just looking forward to it. You know we said we're going to cover all things EV and this is getting really down into the bits and bytes of what an EV is, but it also talks about the politics and the resources and all the things that we're going to need to have the kind of scale that we've talked about in the previous episodes and continue to talk about. So would I suggest rather than you and I going on and on. 

00:02:18 Speaker 2 

Let's invite Gerard Barron to the program. Jared, welcome to the program. 

00:02:21 Speaker 4 

It's a real pleasure to be with you. 

00:02:24 Speaker 2 

Well, I'm excited to hear. Have you here. You can hear Neil's got huge expectations. 

00:02:28 Speaker 2 

For this show. 

00:02:29 Speaker 2 

Why don't we start with what's the problem statement that you're looking to solve or what? Where are you working on? 

00:02:34 Speaker 4 

Well, everyone accepts the fact that we need to decarbonize, right, that the biggest threat to our planet is global warming. 

00:02:45 Speaker 4 

And we've decided that burning using hydrocarbons is a bad thing, right? So we need to transition away. We've realized that it's not as easy as clicking your finger and just, you know, moving away from fossil fuels. However, what we haven't done a lot of thinking about is if we're going to transition. 

00:03:05 Speaker 4 

Away from hydrocarbons to electric vehicles, as just one example, then that's going to require billions of tonnes of more metals and you. 

00:03:17 Speaker 4 

Know the question is. 

00:03:18 Speaker 4 

Where are they going to come from? 

00:03:20 Speaker 4 

Is we've also realized in the last years that when it comes to battery metals, China is OPEC. 

00:03:28 Speaker 4 

They're not a member, they are OPEC, they dominate the battery material supply chain and they have invested ahead of the curve. They've been very, very smart. They've been out there developing these assets, these resources and building the battery gigafactories to be able to supply these materials and so. 

00:03:48 Speaker 4 

What's happened in recent years has made everyone a little bit nervous about that. We've realized that we want to become more independent in our supply chains because they can be turned off in the click of a finger. And of course, what's happened in Russia, Ukraine has further highlighted that the number one producer of Class 1 nickel comes out of Russia and so. 

00:04:09 Speaker 4 

Security of supply the geopolitics around who controls those metals is one of the important things and and you know I don't know which ones more important is that the security of supply or is it the environmental impact of where those metals are coming from. And I know that the metals company. 

00:04:26 Speaker 4 

It's the environmental impact that really got this company and this opportunity started because if I think about what we're focused on, which is polymetallic nodules like the one I hold in my hand, these happen to contain nickel, copper, cobalt and manganese and they form through very slow precipitation. 

00:04:46 Speaker 4 

Process out of the metals that are in our seawater and in the sediment upon which they sit. And when you look at the alternative. 

00:04:56 Speaker 4 

Available to us to to fuel this move away from hydrocarbons and you start focusing on the environmental impacts. The picture is not very rosy because nickel is our main metal here. It represents about half of the economics and 100% of the growth in nickel production today and nickel is used in making stainless steel. 

00:05:18 Speaker 4 

But it's also the main ingredient in battery cathodes. You often hear people talk about on your show and MC nickel, manganese, cobalt. And while people have engineered away from cobalt, it means more nickel. But unfortunately where they're getting that nickel from is underneath our Equatorial rainforest. And to get access to it, you've got to remove the rainforest. 

00:05:41 Speaker 4 

You've got to push out all of the indigenous people that live in that rainforest. You've got to destroy all of the sequestered carbon and the biodiversity, and that's just the beginning, because then you're talking about all the waste and the environmental impacts involved in processing that material. 

00:05:57 Speaker 4 

And so between the environmental impacts and the security of supply and the geopolitics, now is a very, very important time to be thinking where are these? Where should these metals come from? 

00:06:11 Speaker 3 

This is a fabulous place to start and I think you're gonna have to take me back on a little chemistry lesson. Remind me what all these metals are and where they come from. So what we've talked about is nickel, cobalt, copper, manganese. Is that one of your metals you're interested in? But these are not rare earth metals, are they? These are what kind of metals are these? Do you do anything with rare earth metals? And do we care about rare earth? 

00:06:35 Speaker 3 

Metals. You know. What is it you really. 

00:06:36 Speaker 3 

Looking to get. 

00:06:38 Speaker 4 

Well, rare earth metals firstly are a bit of a misnomer because they're not very rare. They're everywhere, and in fact we've got a lot of rare earths in these nodules that I hold in my hand. 

00:06:51 Speaker 4 

But they are controlled by China. In fact, I think China controls north of 85% of the process in all of all Earths. But you know there have also been massive new discoveries. The Japanese discovered in their offshore territorial waters, a supply of rare earth metals that. 

00:07:11 Speaker 4 

Could supply the world for 700 years and so it's not as though they're rare. 

00:07:16 Speaker 4 

What we're focused on are base metals, nickel, copper, cobalt and manganese. And so and of course, if we think about land based mining, you know we know that 70% of the planet is ocean. 

00:07:32 Speaker 4 

About 50% of the planet. 

00:07:35 Speaker 4 

Is what's known as the abyssal zone, so the abyssal zone is. 

00:07:40 Speaker 4 

Below 3800 metres, it's part of the planet that is the most. It's the most common area on Earth and it's an area where there are no plants, so there's zero flora. If we measure the amount of fauna there, it measures at about 10 grams. 

00:08:00 Speaker 4 

Per square meter. 

00:08:02 Speaker 4 

Now, 80% of that biomass, that life is actually bacteria living in the sediment. And the reason for that? Firstly, there's no sunlight at 4000 metres below sea level and there's not much food. All of the food that ends up there falls down through the water column. Decompose this through and of course, much of it is eaten along the way. 

00:08:23 Speaker 4 

And so it's a very low energy area. And so these nodules, what they do, it's it's like a big ion exchange on the bottom of the of the sea floor. It's actually taking all of these metals, precipitating them into this nodule and. 

00:08:39 Speaker 4 

It's cleaning the ocean. You could argue, you know, we're taking all these toxic elements, these atoms and putting them into this nodule. And and it just so happens that they happen to contain all the metals we're going to need a lot more of as we transition away from fossil fuels. And as I mentioned before, nickel is our main ingredient. 

00:09:00 Speaker 4 

Up until about a decade ago, most of the nickel was used to make stainless steel. It's it's a substance that is added for hardening purposes, but it's also the key ingredient in battery cathodes today. And so we're going to need a lot more of it. And if you listen to the international. 

00:09:19 Speaker 4 

Energy Agency is 1 authority on this topic. They estimate that mining in general is going to have to increase up to 500% per annum by 2040. 

00:09:32 Speaker 4 

So it's a really big dilemma for us. It's like where should these metals come from and where should they come from with the lightest planetary and human impact? 

00:09:44 Speaker 3 

So if I kind of recap where we are we're talking about. 

00:09:47 Speaker 3 

Chunks of rock. 

00:09:48 Speaker 3 

Or metal sat on the bottom of the ocean at extreme depth in what is relatively low, biologically impacting areas. 

00:09:57 Speaker 3 

There's suddenly a bunch of questions that emerge around how do you do it? The impact on the biodiversity and fauna that's there, the the politics of it, the economics of it. 

00:10:09 Speaker 3 

Where should we go first? What do you want to tackle first? Because there's there's a whole. 

00:10:12 Speaker 3 

Bunch of directions we can go from here. 

00:10:14 Speaker 4 

Listen, why don't we think about the geopolitics first, because that's a hell of a story. So these nodules were discovered back in the 1870s and. 

00:10:25 Speaker 4 

So it was the British. 

00:10:28 Speaker 4 

The great. 

00:10:30 Speaker 4 

Explorers who decided they wanted to know what was on the bottom of the ocean and so they converted a a a gun ship called the HNS Challenger into a scientific exploration vessel and funded by the Royal Society. It sailed around the world for four years and off the back. 

00:10:50 Speaker 4 

Was a dredge or a big basket and on board was more than 40 miles of rope because no one had any idea how deep the ocean was. Right. So they sailed around the world. Thankfully, the steam piston had been invented, and so they could haul up this basket. 

00:11:06 Speaker 4 

And they discovered these nodules in many of the. 

00:11:10 Speaker 4 

Oceans around the. 

00:11:11 Speaker 4 

World in the deep, deep parts of the ocean. 

00:11:14 Speaker 4 

But it was this one area in the Pacific Ocean off the coast of Mexico where they found them in great abundance, and they were also found to contain very high grades of nickel and copper. 

00:11:30 Speaker 4 

The reason for that is if you look to the East, you have the Rockies and the Andes, and Once Upon a time they were covered in nickel and copper. And so over millennia, as that eroded into the Pacific Ocean, you had currents coming from the north and the South. And basically as they met, they met at this area that's now known as the Clarion, Clifford and. 

00:11:51 Speaker 4 

Fracture zone and headed West, and that's the belt where these nodules sit. And that's why they contain very high Grays of nickel and copper. Now, I mentioned that these that expedition found nodules in many other oceans and. 

00:12:07 Speaker 4 

It it was found that often they were not worth picking up because they didn't contain any nickel and copper. 

00:12:14 Speaker 4 

And so there are hydroxide. They contain iron and they contain manganese and and other materials silica. But it's the nickel and the copper and the cobalt that really provides the high economic value. And so that's where in the 1970s they started to. 

00:12:34 Speaker 4 

Focus on extracting these nodules. In fact, there were. There were many names involved. Lockheed Martin, Mitsubishi, Sumitomo. 

00:12:44 Speaker 4 

Shell BP, Rio Tinto. They were all focused on how can we pick up these nodules and process them to recover the nickel and copper and you know your listeners or viewers can simply Google that and you'll find various documentaries on on online and they were successful. 

00:13:05 Speaker 4 

But 50 years ago, the world had not agreed who owned the oceans and where do your boundaries begin and end. And so it was the United Nations that stepped in and stopped it. And they said, hang on. 

00:13:20 Speaker 4 

We're about to put in place a convention that will determine who owns the oceans, and so everyone had to stop and and the great Henry Kissinger, in fact, who was Secretary of State at the time, wrote to all of the ambassadors of the United Nations and said, hey guys, we want to claim this. 

00:13:40 Speaker 4 

Out of the Pacific Ocean and and all of the ambassadors got together and went. No, that's not going to happen. And so everyone had to stop. And so eventually. 

00:13:49 Speaker 4 

The the United Nations Convention of the Law of the Sea, or Unclothed as we know it, was agreed in 1982, and what that said is that as a sovereign, you own everything within 200 miles of your coastline. You have an economic right to everything within 200 miles. 

00:14:09 Speaker 4 

Just a correction, I think I misspoke there. What Unclass said is that as a nation, you own everything within 12 miles of your coastline. You have an economic right to everything within 200 miles, but beyond that. 

00:14:24 Speaker 4 

It's owned by everyone. It's deemed the common heritage of humankind. 

00:14:29 Speaker 4 

And they set up a group called the International Seabed Authority who would govern this area. 

00:14:36 Speaker 4 

And it's more than 40% of the planet that fits into this category of of international waters. And so today, the International Seabed Authority is based in Kingston, Jamaica, and it's made-up of 168 countries plus the European Union and. And they have the job of putting in place. 

00:14:56 Speaker 4 

The exploration and exploitation regulations, while protecting the marine environment and so you know for the first time geopolitically, this is all the nations coming together. 

00:15:09 Speaker 4 

To agree on a framework to allow the development of a resource, and so it's the opportunity to get it right. 

00:15:17 Speaker 4 

And so that's the first point. The geopolitics that allow this industry to move forward. Now the International Seabed Authority was set up in 1994. 

00:15:29 Speaker 4 

And we are still not extracting, you know, the metals company has been around since 2011. 

00:15:38 Speaker 4 

Formerly known as Deep Green and we've been busy exploring, we've spent more than $400 million carrying out environmental baseline programs, identifying the resource where we have a a 1.6 billion ton resource that is compliant with the Canadian. 

00:15:59 Speaker 4 

43101 and the SK 1300 Resource Reporting standard and last year we spent six months at sea with our collector system, which was a end to end pilot program to show how we would collect. 

00:16:15 Speaker 4 

And we had another bird in the water filled with between 80 and 90 people, many of them scientists who were observing the impacts, observing the area before we started during the collection process and then staying behind afterwards to to study the area once it had been impacted. So. 

00:16:35 Speaker 4 

We're on the brink of this industry being open for business and an alternative supplier to land based resources being available. 

00:16:44 Speaker 2 

So one thing that comes to mind I I I live down here in the DC area. We got the Chesapeake Bay here and and we're big Oyster area where oysters are pretty prevalent and and one of the things the oysters do is they clean the Bay. So the way you describe this is you said that these modules are are nodules are made of you know metals and things that kind of either settle down or getting filtered out. 

00:17:05 Speaker 2 

So in scale, if we start taking a bill billion cubic yards, right, I couldn't remember that the metric you gave or some large scale, how does that impact are, are they filtering the water? So is the Pacific going to change if we suddenly pull out large amounts of filtering? 

00:17:20 Speaker 4 

Well, keep in mind the process doesn't stop. So this nodule in my hand is around 3,000,000 years old. 

00:17:29 Speaker 4 

And and I think one of the one of the many benefits of this resource is where it's located. And so you know, we're like 1000 miles off the coast of. 

00:17:41 Speaker 4 

And the advantage with that is that of that is that it's it's a long way for any settlement for many people and of course one of the big focuses for us has been how big will the impact area be and you know people have worried that if we're going to go down there and stir. 

00:18:00 Speaker 4 

Up the sea floor. 

00:18:02 Speaker 4 

With our our robot. 

00:18:04 Speaker 4 

You know will generate some sediment, dust or plume as it's known. And the question is how far will that sediment travel? And and you know, some of our opponents have suggested that sediment might travel for hundreds or thousands of miles. And now, of course, what we've always said is we've known that. 

00:18:24 Speaker 4 

Not to be the case, but we've. 

00:18:25 Speaker 4 

Said can we just carry? 

00:18:26 Speaker 4 

Out the environmental work program to establish. 

00:18:33 Speaker 4 

Science, upon which we can make evidence based decisions. And last year our collective test was an important part of that. Last year, MIT published 3 very important peer reviewed papers based on some in field work that they had done with another. 

00:18:52 Speaker 4 

Contractor and what they found was that as the robots moved along the sea floor, the sediment only rises around 2 meters. Keeping in mind we're 4000 meters below sea level. Here the sediment only rose 2 meters and up to 98% of it settled in the. 

00:19:08 Speaker 4 

Variant and So what happens is it creates a really dense cloud. The particles flocculate together, they become heavier so they rise and they just sink. And so that's part of the heavy investment that we've been making. To better understand those impacts. And so you know from that perspective, you know we need to understand those whole range of impacts. 

00:19:31 Speaker 4 

You know and and that's in answer to your question around the role of of oysters and cleaning the water, you know. 

00:19:39 Speaker 4 

The fact that we removed these nodules? Yes, there are some organisms that do depend on these. You know, there are some worms that will sit on them and. And taking that substrate away will mean they'll have to find other places to sit. But these nodules will continue to form. Now, I don't want to suggest it's a renewable. 

00:20:00 Speaker 4 

Resource because this one took 3,000,000 years, so that would be a little bit cheeky, but that process will continue cleaning. 

00:20:10 Speaker 4 

The ocean waters and the sediment of these metal compounds is actually a pretty good thing. 

00:20:16 Speaker 2 

OK, so you've you've extracted them. There's some robots that go down, they're 4 miles deep or some incredibly deep. So one of the things that I look at too, when we start talking renewables or batteries and things is is how much energy is going to take to get these things up to the surface and turn them into the nickel that we need to make the parts that go into my EV. 

00:20:35 Speaker 2 

Or whatever I'm going to use them for. 

00:20:38 Speaker 4 

Well, we've done a lot of work on that and the way you have to look at it is through a a full life cycle analysis and you know we are. 

00:20:51 Speaker 4 

We've we've funded many of these independent pieces of work that most recently by a group called Benchmark Mineral Intelligence who, who carried out a life cycle analysis of what will be the impacts of our first development area through a range of lenses. 

00:21:09 Speaker 4 

CO2 emissions impact on sequestered carbon impact on biodiversity impact on fresh water systems. How much water we use, and no matter which metric you look at. 

00:21:21 Speaker 4 

We can dramatically compress those impacts compared to all of the land based alternatives. And so you know from that perspective it's a clear winner. In fact, you know when we just talk about CO2 emissions, you can generate the materials for an NMC battery cathode. 

00:21:40 Speaker 4 

With 90% less CO2 emissions compared to using land based alternatives. 

00:21:46 Speaker 4 

90% plus when we move them to shore and process them, we generate 0 tailings and zero waste. 

00:21:55 Speaker 4 

Just keep that in mind for a moment, because last year the mining industry generated more than 190 billion tonnes of waste. 

00:22:05 Speaker 4 

Now municipal waste globally was 2 billion tonnes. 

00:22:09 Speaker 4 

And we generate 0, so 100% of the mass of this nodule in my hand, we turn into salable products. 

00:22:16 Speaker 4 

So, so there's many, many advantages. 

00:22:21 Speaker 3 

So Chris just asked an interesting question. I'm based in the UK. I'm British. We discovered it. It's my metal. Give it. 

00:22:28 Speaker 3 

Back Chris is based in the US, which is pretty close to Mexico, so he wants it because he's got lots of electric cars. 

00:22:35 Speaker 3 

To build whose is. 

00:22:36 Speaker 3 

This, you know, where are you on that licensing program or is it Jamaican? Because actually they're in charge of the. 

00:22:42 Speaker 3 

The seabed authority. What? What's the story? How do you get a license for this? You know this process you're running. 

00:22:48 Speaker 4 

Well, the good news is that it's everyone's. It's deemed the common heritage of humankind, and that's what unclothed, determined when they. 

00:22:59 Speaker 4 

Presented and everyone signed the agreement in 1982 and of course the question is how does the metals company have a license? Well, so. 

00:23:11 Speaker 4 

What they drafted on clothes to allow for was for developing countries to participate in the development of this resource, because normally it's the wealthy nations who are able to go and afford to develop these economic opportunities and so. 

00:23:33 Speaker 4 

To be able to lay claim to an area of the high seas or the area as it's known, you have to be a signatory to UNCLOS and a member country of the International Seabed Authority. 

00:23:46 Speaker 4 

Or you need to be sponsored by a member country, because the metals company is a private NASDAQ listed entity. 

00:23:54 Speaker 4 

But we are sponsored by three developing nations, Nauru, the Kingdom of Tonga and Kiribati, US and so they are nations that. 

00:24:03 Speaker 4 

Are developing. 

00:24:05 Speaker 4 

They would normally never have a chance to participate in an emerging new industry, their nations, and in some cases who have had a horrible environmental injustice served upon them. Nauru, for example, was an island filled with phosphate until the Germans, the English, the Australians and the new Zealands. 

00:24:25 Speaker 4 

Came and stole it all and today 80% of that island is uninhabited. 

00:24:30 Speaker 4 

So for those islands who've contributed nothing to climate change but stand in the frontline to be impacted by the effects of climate change through rising sea levels, this is an opportunity for them to participate in an industry that that can provide jobs, training opportunities, royalties when we're in production. 

00:24:51 Speaker 4 

Local taxation when we're in production. 

00:24:53 Speaker 4 

And allow them to diversify away from foreign aid and fishing royalties, which is where most of their income comes from today. 

00:25:03 Speaker 3 

So that's a great question because you talked about the environmental and the social and the political injustice. You're obviously doing a huge amount of work to understand the environmental impact that you're having. You know, it sounds like you're still at trial stage. What happens next? How do you get from doing all the environmental studies, gaining your support from these smaller? 

00:25:23 Speaker 3 

And the nations to actually get into a production scale, what do you need to do next? 

00:25:30 Speaker 4 

So last year we had six months on the water with our end to end collector system. So we've already secured our first production vessel we announced earlier this year where we were likely to process our first batch of nodules in Japan and we'll have more news. 

00:25:48 Speaker 4 

On that very soon and and one of the. 

00:25:52 Speaker 4 

If you go to our website, which is metals Co, you'll see our first production vessel is actually a repurposed oil and gas drill ship. So our partner all sees who are also our largest investor and for the last 37 years, they've been laying pipe to the oil and gas industry in the deep ocean. 

00:26:12 Speaker 4 

So they are experts at at solving these challenging engineering issues. 

00:26:19 Speaker 4 

So they purchased the Hidden gem and have converted it into our first production vessel. It was a. It was an amazing success, largely thanks to the expertise that all sees brought to that exercise. But on the onshore side, we've been able to achieve some really amazing things as well. 

00:26:39 Speaker 4 

Because if you think about a land based resource project, firstly they're very, very hard to find. Secondly, they're even harder to permit and if you look at North America, whether it's Pebble or twin metals or resolute, no one wants a mine in the backyard, their own backyard. 

00:26:57 Speaker 4 

And so typically that's been outsourced to the developing world. Now you also outsource the regulation and the environmental oversight to the developing world as well. And that doesn't always work out so well. 

00:27:11 Speaker 4 

But in our case, we've been able to identify existing onshore processing facilities that can handle our nodules. And today, those processing plants are taking a a direct feed of nickel laterite now, of course, to get the nickel ladder ride, you've got to remove the rainforest. 

00:27:31 Speaker 4 

And so there's a win win here. 

00:27:34 Speaker 4 

That we can slow down that by replacing that feedstock with our polymetallic nodules. So that's a really important point that we I don't think we've communicated effectively enough to date, but hopefully with our announcement that will come out soon, we'll be able to further drive forward that point and so. 

00:27:53 Speaker 4 

Once we receive once we lodge our application, which will be after July next year. 

00:28:00 Speaker 4 

We hope that we'll be in production as early as 2000, the end of 2025 and one of the things that really helps us with that is that when it comes to the onshore processing that we don't need to go through a big permitting exercise. We already have an existing processing plan. 

00:28:19 Speaker 4 

That we'll be able to ship our nodules to that has all of the permits that we don't have to go and construct and get the construction financed for. So that means we're not far away from commercial production. 

00:28:32 Speaker 2 

So as you're describing all this, your analogy of OPEC comes to mind, right? OPEC likes to limit the supply to keep the price high. So right now you're a little bit science fiction. For many, you know, for our EV listeners. You're not in their cars yet. You're you're not quite going to be in there for a little while. 

00:28:51 Speaker 2 

But I can't imagine people are gonna go peacefully into the night when you suddenly put a lot of production on board. So what happens to the price of these? 

00:28:59 Speaker 2 

When when you come on board? 

00:29:01 Speaker 4 

Well, a couple of things. I don't like the science fiction because, you know, we are go to my website and look at what we were doing. 

00:29:11 Speaker 4 

Last year, like. 

00:29:14 Speaker 4 

Go back 50 years ago when they were solving these engineering issues and so the resource exists. We know that the technology to be able to lift them exists and the ability to process them exists. What we're really doing is putting all those pieces together and getting past the regulatory hurdles. But when it comes to the price. 

00:29:35 Speaker 4 

Just go and look at the forecast demand for these metals in the future. 

00:29:40 Speaker 4 

The demand for nickel for copper for cobalt and manganese is all growing substantially and the question is where is it going to come from? Because on land, you know we've used up a lot of the high grade material already, which means that we're having to dig deeper, go wider to the less economic materials and so. 

00:30:01 Speaker 4 

It's time for a new a new supply of these materials, and so I don't think what there's no, there's no evidence that we. 

00:30:09 Speaker 4 

Will crash these metal markets, that's for sure. What we will do is supply a lower impact, more environmentally safe and friendly supply of these metals, which I think will put ocean metals into a category all of their own because of their lower environmental and human impact. 

00:30:31 Speaker 4 

And and you know, one of the great things that we have experienced is that often the most environmentally damaging supply of materials is also the most uneconomic. 

00:30:45 Speaker 4 

And so it means that you know. 

00:30:49 Speaker 4 

Those are the ones that will disappear 1st and that's a good thing for the planet. 

00:30:55 Speaker 3 

So you've got on your desk a piece of this Poly metallic substance. What actually is in it? You know how much of it is going to be thrown away because we don't want it. How much of it is nickel? How much of it is something else that's useful. And therefore, when you bring a a ton of this to surface, you know, is it all usable? 

00:31:14 Speaker 3 

And really interestingly for me is like you clearly got to gather this off the ocean bed and we'll probably talk a bit more about the process. But the reality is, you know, when you gather off the bed and you're bringing up just the nodules or you're bringing up other stuff as well. 

00:31:30 Speaker 4 

Well, let me deal with the first part of that question and that is we use 100% of it. So it is a hydroxide and it contains only trace levels of deleterious elements are arsenic and mercury and they're the nasty things with land based ore bodies. 

00:31:49 Speaker 4 

That make processing really bad and and you know for your listeners look up tailings dams. Put it, put it into your Google search because. 

00:32:01 Speaker 4 

Is one of the downsides of land based mining is you generate a lot of waste material and if we look at what's happened in Brazil in recent years, there's tailings dams, which because you have to keep that material because it's toxic, have a habit of bursting. And in fact, in recent years, hundreds of lives. 

00:32:22 Speaker 4 

Been lost in massive ecosystems have been wiped out. We don't generate any tailings. We use 100% of the mass of the nodule. 

00:32:32 Speaker 4 

So that's a positive. 

00:32:36 Speaker 4 

So the not only in my hand is as I mentioned we use 100% of the mass of it, but it has around 1.4% nickel 1.1% copper about .2% cobalt and 30% manganese. So. 

00:32:55 Speaker 4 

If I just take away one of those elements like copper last year, the average grade of copper that was mined was around half of 1%. 

00:33:05 Speaker 4 

So we have 1.1% copper and 1.4% nickel. 

00:33:10 Speaker 4 

And .2 cobalt and 30% manganese and and at the moment the world is contemplating developing nickel projects that are grading .2 of 1%. 

00:33:22 Speaker 4 

The richness of this grade has a big impact on the economics and so and the other thing to think about when it comes to economics is infrastructure. 

00:33:32 Speaker 4 

Let's just imagine a land based oil body. You've got to find it. You got to define it by drilling hundreds and then thousands of holes. Then you have to. 

00:33:43 Speaker 4 

Put an application in to. After having spent years and years of Environmental Research. 

00:33:49 Speaker 4 

And then finally, when you, if you're lucky enough to get a permit, you've then got to go and build a heap of infrastructure. You've got to build roads and rail and deep water ports and power supply and villages for people to live in. 

00:34:04 Speaker 4 

Because you also have to process the material where you find it, mainly because of the low grade of it. You know on land you're talking about, as I mentioned 0.5 of 1% copper, that means more than 99% of the rest of the material is waste. You've got to leave it behind, whereas we have none of those issues. You know we convert. 

00:34:24 Speaker 4 

Our production vessel we've sailed on out there. It can be in production in seven days. We collect our nodules, we put them on a boat and the boat can go to Asia, to North America, to Europe or down to. 

00:34:39 Speaker 4 

And we'll only choose a processing plant that is or in the early days that's already existing. But if we had to build a plant, let's say in North America, we'd build it. 

00:34:50 Speaker 4 

Near a deep water port. 

00:34:52 Speaker 4 

We'd build it around where there's already an infrastructure, and so you know from an infrastructure perspective we have many advantages compared to land based alternatives. 

00:35:02 Speaker 2 

Do do we get to a point where I mean this is a finite resource with anything you mine is finite, right? Is is there a point where that demand that appetite for electrifying the world even goes past the the resource that you see on the bottom of the sea? Or is this a big enough resource that when you go harvest this over so many years? 

00:35:23 Speaker 2 

Period that we just recycle and use what we have and we have enough to meet the future demand. 

00:35:30 Speaker 4 

Look, great question, Chris, and it's if you go back to our purpose at the metals company which we published maybe six years ago on our website. 

00:35:41 Speaker 4 

The first was where should these metals come from? With the latest planetary and human touch, the second stage was was, as we envisaged moving away from extractive industries because we do believe that extractive industries will slow down and eventually stop. 

00:35:59 Speaker 4 

The second stage was to make sure that every single atom we put into the system stayed there, is recycled, and then finally when we stop extracting to make sure that our onshore processing plants can be used to recycle other materials. 

00:36:14 Speaker 4 

Now just to, in a sense of scale, we've identified 1.6 billion tons of these nodules on two of our license areas and that's enough to build around 280 million. 

00:36:27 Speaker 4 

EV batteries with an NMC 811 chemistry. So it's a very large resource. It's enough nodules to electrify the entire USA light passenger fleet. So it's big. 

00:36:44 Speaker 4 

But there's no doubt about it. You know, we think in 4050, sixty years time, you know we won't be collecting nodules. We'll be in a different business. 

00:36:55 Speaker 3 

So you talk about collecting nodules being an engineer. I'm super interested in what that actually involves. I did have a sneaky peek at your website earlier, and I can see there's a robot involved. And you've mentioned it, you know, can you talk us through the process of, you know, you send this ship out? It takes seven days or whatever it is to get it out there. You're basically 1000 kilometers. 

00:37:17 Speaker 3 

Off the coast of Mexico, you've got 4000, a water kilometer, 4000 metres of water beneath you. 

00:37:23 Speaker 3 

You know what happens next. 

00:37:25 Speaker 4 

Yeah. So we dropped down our robot. We connected to a riser and an umbilical and that boat stays out there permanently. And so, you know, I often use the analogy of golf balls on a driving range. And our job is to go and pick them up. And So what our robot does is it fires a jet of water. 

00:37:47 Speaker 4 

Horizontally towards the robot and creates an inverse pressure. And as the collector head moves away, it lifts the nodule. 

00:37:54 Speaker 4 

And so we don't go down there and dig or tunnel because the nodules lie on the sea floor. 

00:38:02 Speaker 4 

They're there through us to see. And So what we do is we move over them and lift them and then our robot separates out the sediment. 

00:38:10 Speaker 4 

And then we put the nodules into the air riser, which is then pumped up to the production vessel and a small amount of sediment goes up the pipe with it. We use water as the transport mechanism. We inject compressed air into that water pipe and as the air expands, it creates a vacuum, and then we return that water. 

00:38:31 Speaker 4 

Back at A at a level that will be determined after our environmental studies are complete, probably around 1000 meters below sea level. 

00:38:41 Speaker 4 

But most of the sediment is left behind, so it's a very efficient way and you know it's it's very, very heartening when we go back and see the impact of collecting the nodules and and you know that engineering will continue to get better and better and. 

00:39:01 Speaker 4 

In fact, in November we head back out there again in another research expedition to. 

00:39:08 Speaker 4 

Investigate the area 12 months after we were there last year to study. How is it rehabilitating? 

00:39:16 Speaker 4 

How how's it recovering? And you know, we're looking forward to being able to share that with the world very soon. 

00:39:23 Speaker 3 

So I've taken away a messaging set in here around how you're moving this technology forward, how you're moving the licensing forward, how you're doing all the reporting. And I asked a question of Doctor Ewan Mcturk before we started this conversation, he was one of our earlier podcast interviews and he was asking the questions around the environmental impact and it sounds. 

00:39:44 Speaker 3 

Like you're all over that process. You asked the question around the content in your minerals, and it sounds like that's really coming together. And Chris and I were curious about the economics and the politics. I guess, you know, you you're building up a support base in here. I hear you have quite a high profile supporter as well in the former James Cameron. What's he been saying about? 

00:40:04 Speaker 3 

What you're up to? 

00:40:08 Speaker 4 

Well, I mean, James Cameron is someone who we can probably take as a as somewhat of an expert when it comes to the deep ocean. And I've never had the pleasure of meeting Mr. Cameron, but I I hope I will soon. You know, as he himself reports, he's done more than 75 deep water. 

00:40:30 Speaker 4 

Lives. He's been to the Mariana Trench. He made the Titanic, of course. 

00:40:36 Speaker 4 

And you know, I was, I was very pleased to see in an interview that he made with the Guardian. 

00:40:43 Speaker 4 

Who aren't my favorite publication where he was asked about deep sea metals and he said, well, I can tell you I've been there a lot, 75 dives and I can tell you what's down there, miles and miles and miles of clay. And it would seem to be by far. 

00:41:03 Speaker 4 

The best. 

00:41:05 Speaker 4 

Option compared to land based. 

00:41:08 Speaker 4 

Wholesale destruction of rainforests. 

00:41:11 Speaker 4 

Of cobalt coming out of the Congo, and so you know. 

00:41:17 Speaker 4 

We welcome people of his stature and you know, I can't think of anyone who's more qualified to opine on this topic than, you know, James Cameron because of his hobby, which is the deep ocean. And yeah, so that was a that was a nice surprise. 

00:41:37 Speaker 2 

Now, Speaking of deep ocean and James Cameron recently in the news with with some of the ocean tragedy that took place around the Titanic, there was an interesting article that India has got its first deep submersible that they're working on. And if I think of countries around the world with a large population that are going to need a lot of resources, India would be. 

00:41:57 Speaker 2 

One what? What countries are you are positioned today to go after these resources. So you you obviously are one company. 

00:42:04 Speaker 2 

Me. You know, if it's if this is profitable in this commercially, you know people have known about this since long period of time. I'm sure you're not the only one. So what countries are going to take advantage or who's teeing up to take advantage early? 

00:42:18 Speaker 4 

So we have control over 3 licenses but but I think the main the main progressor apart from us is China. 

00:42:30 Speaker 4 

So China have 4 licenses in total. Two of them are in the Clarion Clipperton zone where we operate alongside them are Japan, Korea, Singapore, the United Kingdom, France and Germany and and Russia. And so a lot of the nations developed nations secured their ground. 

00:42:51 Speaker 4 

Going as far back as 2001 and. 

00:42:57 Speaker 4 

So the metals company controlled 3 license areas, but I guess the next. 

00:43:04 Speaker 4 

Most active player is China and they have 4 licenses in total. Two of them are in the Clarion Clipperton zone where we operate but also Japan. 

00:43:15 Speaker 4 

Korea, Singapore, the United Kingdom, France, Germany, Russia are also there, but I think it's safe to say we have a a a lead ahead of the other operators by several years, maybe up to five years simply because of our very heavy investment that we've been making over the last decade. 

00:43:37 Speaker 3 

So 10 years you've been investing in this space and building out this business, but how on Earth did you start getting involved in what is basically almost science fiction? We talked about science fiction earlier. We talked about the idea that, you know, William Gibson used to say the future is already here. It's just not evenly distributed. 

00:43:56 Speaker 3 

So this is the future. This is something really cutting edge. But you know, how do you get involved in that space? 

00:44:02 Speaker 4 

Well, I started my life as a. 

00:44:07 Speaker 4 

Son of a dairy farmer in Australia. 

00:44:10 Speaker 4 

Started my first company at university and I've been lucky enough to build companies ever since, and in 2001 I invested in a company that was also focused around ocean resources and so that that's where I cut my teeth. I was busy building a software as a service company at the time and. 

00:44:30 Speaker 4 

And then when we started, I sold out of that particular company that I talked about and then we started this company in 2011 and originally I was the finance. 

00:44:40 Speaker 4 

Backer. But I took over running it as the Chairman and CEO back in 2017 and and you know, it just came at the right time. You know, I'm attracted to difficult, challenging tasks. I realized that, you know, the supply of these raw materials for the. 

00:44:58 Speaker 4 

Process of Decarbonizing was going to become a really critical issue for. 

00:45:02 Speaker 4 

Planet and you know, I just thought if we don't get in and do this, then there's a chance that it might not happen. And I look back on things like nuclear and I think how different the world might look had we been able to progress nuclear in a safe way compared to it being shut down. 

00:45:23 Speaker 4 

By its opponents for disingenuous reasons, and I think that no matter what your view on that is, it's it's no doubt. 

00:45:32 Speaker 4 

The most efficient supply of energy out there, right? And so imagine that the same thing happened when it came to ocean metals that at those same. 

00:45:45 Speaker 4 

Crazy opponents could build a story that we don't know about the ocean. For that reason, we should just leave it alone. We should just keep destroying our rainforests, destroying the habitats of indigenous communities that don't want to drive electric cars. It's just the hungry appetite of the West. 

00:46:04 Speaker 4 

And so if we didn't arm up and do this, then there was a high probability that it just wouldn't happen. And so here we are today. 

00:46:13 Speaker 3 

It sounds like you've it sounds like you've taken a huge amount of personal responsibility on there to try and drive forward a technology set that fundamentally we require. If we're going to exploit the deep ocean. I'm I'm kind of in the same camp as you. I have a background in the nuclear industry. It has some bad. 

00:46:29 Speaker 3 

History, realistically, deep ocean mining is at the forefront of science and technology, so we need to do it sensibly and safely. So hearing you talk about the level of analysis and research you're doing as you, you know, understand what the implications are of picking up this material off the bottom of the ocean. But you've also opened our eyes to. 

00:46:50 Speaker 3 

For me, it's the depth at which you're operating. It's 4000 meters in the abyssal zone. I presume it's completely pitch black. You know there are. There are so many significant challenges, you know, from a personal perspective. 

00:47:04 Speaker 3 

You know what is your? You know, what is your biggest challenge? You think you've overcome? What are some of the lessons you've learned as you've been exploring and building this business? 

00:47:14 Speaker 4 

Well, I'd say the biggest challenge has always been the provision of capital. You know, the just keeping the business funded has always been something that has required much more of my attention than I imagined it would. But then it comes down to social license, you know, and I just think that's a. 

00:47:34 Speaker 4 

That's something that we've just got to suck it up and get through. 

00:47:38 Speaker 4 

There's, there's always going to be a segment of society that just doesn't want to do anything new, you know, and there's no better example than some of the NGOs who've taken a view on this. 

00:47:50 Speaker 4 

They don't want to. They don't want to support land based mining. 

00:47:54 Speaker 4 

They publish inch thick reports that say the biggest risk to biodiversity and our sequestered carbon banks is land based mining. But they also don't want this. And they they've just want to. They want a world where we recycle and. 

00:48:12 Speaker 4 

Consume less and sit around and sing Kumbaya like it's not the reality in which we live. And so, you know, it's it's been a surprise to me, you know, just that whole media warfare and and how the our opponents have been able to. 

00:48:32 Speaker 4 

Speculate and have their opinions, you know. 

00:48:37 Speaker 4 

Published as facts, when actually it's the heavy investment that companies like us and we're not the only one. There are other governments and countries and contractors who are doing work the same as we are, just not with the same intensity. And all of that, of course, is generating the scientific evidence. 

00:48:56 Speaker 4 

That can help us make informed decision and that's what we should be relying upon. 

00:49:03 Speaker 3 

So there's absolutely no denying that as we look at the electric vehicle industry or more broadly the battery industry, it is a resource intensive activity. It's been an absolute delight to speak to you today to hear about the journey and some of the politics. I've never heard about the fact that British discovered this, the International Seabed Authority. 

00:49:22 Speaker 3 

The fact you're lifting up nodules that are 3,000,000 years old when one of which is on your desk, which is pretty cool the the, the heavy amount of you know obviously financing that's going into this and from Chris and I's perspective, we both run very different smaller software companies and financing and fundraising is hard work, but I think yours is on a different. 

00:49:42 Speaker 3 

It's been a real pleasure to have have you on the show and to speak to you today. 

00:49:46 Speaker 4 

Pleasure has been all mine. I've enjoyed it. 

00:49:49 Speaker 2 

Well, thank you so much for our audience. I hope you've enjoyed this conversation. We know it's not exactly an. 

00:49:54 Speaker 2 

EV yet it's. 

00:49:56 Speaker 2 

The parts that are going to go into making your V, making it sustainable in the transition, but we want to uncover everything along the journey and we thought this was something interesting to share. If you've enjoyed this content as much as we have making it, please. 

00:50:08 Speaker 2 

Share it, subscribe. Follow us. Follow us on YouTube and we'll see you again on another episode of the EV miniseries here on Insiders Guide to energy. Bye. Bye.