Key points
- NORI and Allseas signed a non binding term sheet on March 17, 2022 for a commercial nodule collection system
- Targeted production capacity of 1.3 million tonnes of wet nodules per year, with production readiness expected by Q4 2024
- Total development cost for the first commercial system estimated at under EUR 100 million, split equally between NORI and Allseas
- NORI expects to pay Allseas roughly EUR 150 per wet tonne in year one, falling over 20% as production scales to 1.3 million tonnes
- The Metals Company’s subsidiary NORI and Allseas enter into a non-binding term sheet for the development and operation of commercial nodule collection system
- The pilot nodule collection system developed and currently being tested by Allseas expected to be upgraded to a commercial system with a targeted production capacity of 1.3 million tonnes of wet nodules per year and expected production readiness by Q4 2024
- NORI and Allseas intend to equally finance all costs related to developing and getting the first commercial system into production estimated at less than EUR 100 million in total
- Once in production, NORI expects to pay Allseas a nodule collection and transshipment fee estimated at ~EUR 150 per wet tonne in the first year of operations and expected to be reduced by over 20% as Allseas scales up production to 1.3 million wet tonnes per year
- The parties intend to further detail and revise these cost estimates in the definitive agreement expected no later than 31 December 2022 following the completion of the pilot collection tests
- Upgrading the pilot collection system into a commercial production system is expected to significantly reduce capital requirements and shorten time to commercial production for the world’s largest estimated single source of critical battery metals
- Allseas and NORI also intend to investigate acquiring a second production vessel similar to the Hidden Gem, a Samsung 10000, that is expected to be engineered to a higher production rate of three million tonnes of wet nodules
NEW YORK, March 17, 2022 (GLOBE NEWSWIRE) — TMC the metals company Inc. (Nasdaq: TMC) (“TMC” or the “Company”), an explorer of the world’s largest estimated undeveloped source of critical battery metals, today announced that its subsidiary NORI signed a non-binding term sheet with its strategic partner and shareholder, Allseas Group S.A. (“Allseas”) to develop and operate a commercial nodule collection system with a targeted production capacity of 1.3 million tonnes per annum (Mtpa) of wet nodules and expected production readiness by Q4 2024.
Since forging a strategic alliance in 2019, Allseas and TMC’s subsidiary NORI have been working together to develop a pilot collection system to recover polymetallic nodules from the seafloor in the NORI-D Area of the Clarion Clipperton Zone (“CCZ”) of the Pacific Ocean and transport the nodules to shore for processing using TMC’s near-zero solid waste flowsheet into battery metal precursor materials and manganese silicate product expected to be used in manganese alloy production for the steel industry. The pilot collection system — that includes the production vessel Hidden Gem on the surface, a collector robot on the seafloor and a riser that lifts nodules from the seafloor to the surface — is currently undergoing wet testing by Allseas in the Atlantic Ocean and is expected to be piloted in the NORI-D Area in the Pacific Ocean later this year.
The parties expect that following the completion of the pilot tests in the Pacific Ocean, Allseas will promptly initiate the upgrade of the pilot collection system into a production-ready commercial system with a targeted production capacity of 1.3 Mtpa of wet nodules and initial use of five years prior to additional upgrades (“Project Zero System”). The parties intend to co-finance in equal parts all costs required to get into production currently estimated to be less than EUR 100 million. Once in production and subject to Allseas achieving certain production targets, NORI expects to pay Allseas a nodule collection and transshipment fee — sufficient to cover Allseas’ operating expenses, Allseas’ share of upfront and CAPEX costs and a fee linked to the value of contained metals — currently estimated at ~EUR 150 per wet tonne of nodules in the first year of production and expected to be reduced by over 20% in the following years as Allseas scales production up to 1.3 Mtpa of wet nodules. The parties intend to further detail and revise these cost estimates in the definitive agreement expected no later than 31 December 2022 following the completion of the pilot collection tests. Both parties expect to see the per-tonne cost to further decrease from these estimates if Allseas scales production capacity of its surface production vessel by adding multiple collectors on the seafloor.
Polymetallic nodules contain high grades of nickel, manganese, copper and cobalt — key metals required for building electric vehicle batteries, renewable energy technologies and steel for infrastructure. TMC’s nodule portfolio in the CCZ is estimated to be the world’s largest undeveloped single source of critical battery metals. The demand for these metals is surging and commodity prices for metals contained in nodules have all hit multi-year highs. TMC believes that upgrading the pilot nodule collection system into a production-ready collection system may allow NORI to significantly reduce capital requirements and shorten time to commercial production of the critical minerals required for the clean energy transition.
Allseas and NORI also intend to investigate acquiring a second production vessel similar to the Hidden Gem, a Samsung 10000, that is expected to be engineered to a higher production rate of 3Mtpa of wet nodules. A higher-production rate system is expected to reduce the per tonne nodule collection cost significantly compared to the first production system that TMC and Allseas intend to develop and operate.
Edward Heerema, Founder of Allseas commented: “For the last three years we have been building the pilot nodule collection system with the intent to upgrade it into a production system after the pilot trials. With the pilot system ready and undergoing wet tests, we are planning ahead for the next phase: upgrade and first small-scale commercial operations, maybe even acquiring a second vessel. While we will no doubt learn a lot in the coming months, we are pleased to have a potential economic framework for how we intend to proceed together with our partners at NORI and TMC.”
Gerard Barron, Chairman and CEO of TMC, said: “As a partner, Allseas delivers — despite pandemics and supply chain disruptions. We really appreciate their intention to finance 50% of the costs of developing and getting Project Zero System production-ready by Q4 2024 and working out potential nodule collection and transshipment fees with NORI. Even at the estimated ~EUR 150 per wet tonne of nodules, we expect to have a meaningful margin left for logistics and processing. If Allseas scales production from the initial capacity, we expect per tonne costs to go down further.”
About The Metals Company
TMC the metals company Inc. (The Metals Company) is an explorer of lower-impact battery metals from seafloor polymetallic nodules, on a dual mission: (1) supply metals for the clean energy transition with the least possible negative environmental and social impact and (2) accelerate the transition to a circular metal economy. The company through its subsidiaries holds exploration rights to three polymetallic nodule contract areas in the Clarion Clipperton Zone of the Pacific Ocean regulated by the International Seabed Authority and sponsored by the governments of Nauru, Kiribati and the Kingdom of Tonga. More information is available at www.metals.co.
About Allseas
Allseas is a world-leading contractor in the offshore energy market, with dynamism, rapid progress and pioneering spirit at its core. Allseas specialize in offshore pipeline installation, heavy lift and subsea construction. The company employs over 4,000 people worldwide and operates a versatile fleet of specialized heavy-lift, pipelay and support vessels, designed and developed in-house. More information about Allseas is available at www.allseas.com
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