The Metals Company (TMC), a company extracting battery metals from seafloor polymetallic nodules, said Friday its subsidiary NORI had signed a non-binding term sheet with its strategic partner and shareholder, Allseas to develop and operate a commercial nodule collection system.
The system has a targeted production capacity of 1.3 million tonnes per year of wet nodules and expected production readiness by Q4 2024.
According to TMC, formerly knowns as DeepGreen Metals, 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.
Since forging a strategic alliance in 2019, Allseas and TMC’s subsidiary NORI have been working 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.
After the collection, the nodules would be transported 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.
Pilot test
The pilot collection system — that includes the production vessel Hidden Gem (ex-Vitoria 10000 drillship) 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.
TMC said that 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”).
Commercial terms
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 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," TMC said.
"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," TMC added.
Subsea technology company Seatools recently delivered deep-sea mineral collection equipment for Allseas' Hidden Gem seabed mining ship.
Seatools was responsible for the engineering, manufacturing, and qualification of the electronics, instrumentation, and hydraulics for Allseas’ pilot polymetallic nodule collection vehicle. The vehicle will be part of a pilot nodule collection test conducted by Allseas, which is scheduled to take place in 2022 in the Pacific Ocean. Read More
CZZ - World's largest source of battery metals
TMC said its nodule portfolio in the Clarion Clipperton Zone 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," TMC said.
Higher capacity vessel planned
As previously reported, Allseas in 2020 acquired the ultra-deepwater drillship Vitoria 10000 (now the Hidden Gem) for conversion to a polymetallic nodule collection vessel, and TMC said Friday there are plans to buy another drillship, which will have a higher production rate than the Hidden Gem.
"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," the company said.
Edward Heerema, Founder of Allseas said::"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.”
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