Shipping company AP Moller-Maersk is selling its stake in deepwater mining firm The Metals Company, even as the legal process to allow seabed mining nears its final stages.
Maersk told the Wall Street Journal that it now owns less than 2.3 percent of TMC and is in the process of selling all of its shares. The transportation company held more than 9 percent of TMC in 2021, according to FactSet data, and has been an investor in the company since 2017.
TMC is one of the biggest proponents of deepwater mining and is the most active company in the space, being the first to complete pilot testing. In June 2021, the company, along with the Republic of Nauru, began negotiations to legalize deep-sea mining when it submitted an application to the UN-backed International Seabed Authority for Pacific Ocean Mining. This triggered a rule requiring the ISA to create a code that would allow mining of deepwater resources by July 2023, even if, as expected, no code would be agreed.
The practice has attracted attention because of the potential to harvest battery metals such as cobalt and nickel from seafloor rocks. Seabed mining raises the prospect of additional supplies to ease expected shortages, while proponents also say it could ease concerns from other sources, such as humanitarian problems with cobalt mining in the Congo and environmental problems with nickel mining in Indonesia.
Maersk said it entered into a contract with TMC five years ago to provide shipping services to the company. Maersk said that direct payment from TMC was not possible at the time and therefore payment for the contract was provided in the form of shares which are being sold.
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TMC said in 2022 that Maersk did not have a vessel suitable for TMC’s mining operations, so the miner signed a contract with engineering firm Allseas Group instead. “We remain good friends [with Maersk] and grateful for their important contribution to moving this industry in the right direction,” said TMC CEO Gerard Barron.
In March, Lockheed Martin sold UK Seabed Resources, which holds the licenses for two Pacific seabed exploration contracts. Norway’s Loke Marine Minerals bought UKSR for an undisclosed fee.
TMC and other deepwater mining firms have come under fire over concerns that the practice will harm the seabed environment. TMC previously said it aimed to start seabed mining in the second half of this year, but is now willing to wait until the mining code is finalised, which is the official position of the Republic of Nauru.
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Shares of TMC, listed through a Nasdaq-listed SPAC, have lost more than 90% of their value since going public in 2021. They currently trade at roughly 82 cents. Last December, the company received a delisting notice from Nasdaq after trading below $1 for more than 30 days. The notice was lifted in February after the stock traded above $1 for 10 days, but a new one was issued in April for the same reason as in December.
The ISA and member states previously met in March this year and failed to agree on what the conditions for seabed mining should be and how it should be regulated, with concerns about royalty splitting and environmental damage of key importance. The next meeting is scheduled for the end of July, and another is scheduled for October.
Write to Yusuf Khan at [email protected]
Corrections and enhancements
UK Seabed Resources was a wholly owned subsidiary of Lockheed Martin before it was sold to Norway’s Loke Marine Minerals. An earlier version of this article incorrectly said that Lockheed Martin had sold its stake in UK Seabed Resources. (Corrected May 3)