TMC Commends U.S. House of Representatives for Allocating Defense Funding to Assess the Feasibility of Domestic Nodule Refining Capacity
TMC the metals company has praised the U.S. House of Representatives for introducing legislation to allocate $2 million for a feasibility study on the domestic refining of polymetallic nodule-derived intermediates. This funding will be channeled through the Defense Department’s Industrial Base Policy Office as part of the fiscal year 2025 National Defense Authorization Act (NDAA). TMC's U.S. subsidiary is also seeking a $9 million grant under the Pentagon’s Defense Production Act Title III program for similar feasibility work. The legislation aims to enhance domestic production of metals like nickel, cobalt, and copper, important for clean energy and defense technologies. TMC plans to begin commercial-scale nodule collection by Q1 2026 and has a memorandum of understanding with Pacific Metals Co. for initial processing. The move is seen as a strategic step to reduce U.S. dependence on foreign critical minerals, aligning with Executive Order 14017 to strengthen supply chains and revitalize American manufacturing.
- TMC could benefit from the $2 million NDAA allocation for feasibility studies, enhancing its domestic refining capabilities.
- The company is seeking an additional $9 million grant under the Defense Production Act Title III program, which could further bolster its U.S. operations.
- Legislation supports domestic production of high-purity nickel, cobalt, and copper, essential for clean energy and defense sectors.
- TMC plans to begin commercial-scale nodule collection by end of Q1 2026, indicating potential revenue growth.
- Binding memorandum with Pacific Metals Co. for primary processing strengthens TMC's supply chain.
- The $2 million allocation is merely for a feasibility study, not actual production, which may delay tangible benefits.
- No guarantee that TMC's $9 million grant application will be approved, adding uncertainty.
- Dependence on future grants and loans from the Department of Energy and other entities poses financial risks.
- Commercial production is not expected until at least Q1 2026, delaying revenue generation.
Insights
The NDAA's $2 million allocation for assessing the feasibility of domestic nodule refining capacity has significant implications for TMC. Although the amount seems modest, it represents a potential shift towards domestic refining, reducing reliance on international supply chains. TMC's application for a
From a market perspective, the move to establish domestic nodule refining capacity aligns with U.S. supply chain resilience and critical mineral independence, themes that are increasingly significant in geopolitical contexts. The reference to competition with China underscores the strategic importance of this initiative. TMC’s binding memorandum with Pacific Metals Co. of Japan for primary processing adds credibility to their operational plans, indicating readiness to commence production by Q1 2026. This could place TMC at a strategic advantage in the critical metals market, important for technologies in clean energy and defense. For retail investors, the legislative push and potential grants suggest a growing governmental commitment that could provide a steady revenue stream for TMC, possibly leading to stock appreciation in the medium to long term.
The legislative support for domestic refining capacity, coupled with TMC's application for grants under the Pentagon's Defense Production Act Title III program, indicates a robust alignment with U.S. defense and industrial policy. The Responsible Use of Seafloor Resources Act and the push for the U.S. to ratify the UNCLOS treaty highlight a significant policy backdrop that could favor TMC. Legal and regulatory backing can often de-risk investments, providing a safer environment for TMC’s future operations. However, investors should be aware of potential environmental and legal hurdles associated with seafloor resource exploitation, which could pose risks to project timelines and costs. Monitoring developments in international governance and U.S. legislative support will be important for prospective stakeholders.
- As reported by the Wall Street Journal, the House version of the fiscal year 2025 National Defense Authorization Act (NDAA) calls for
$2 million allocated to the Defense Department’s Industrial Base Policy Office to study the feasibility of developing domestic capacity to refine polymetallic nodule-derived intermediates to high-purity nickel, copper and cobalt products. The legislation also proposes to examine existing supply chains for such intermediates. - In addition, TMC's U.S. subsidiary has an outstanding application seeking a
$9 million grant under the Pentagon’s Defense Production Act Title III program for feasibility work on a domestic refinery for nodule-derived intermediate products. - With TMC’s commercial-scale nodule collection from its NORI-D Area targeted to begin at the end of Q1 2026 and a binding memorandum of understanding in place with Pacific Metals Co. of Japan for primary processing, the prospect of refining the resulting NiCuCo intermediate product to high-purity products in the United States could bolster domestic production of clean energy, infrastructure and defense technologies.
NEW YORK, May 23, 2024 (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 welcomed the introduction of legislation by the U.S. House of Representatives calling for financial support from the Defense Department’s Industrial Base Policy office to “assess the feasibility of improving domestic capabilities for refining polymetallic nodule-derived intermediates into high-purity nickel, cobalt sulfate, and copper.”
Led by the House Armed Services Committee, the proposed legislation would support the realization of nickel refining capacity in the United States, to build resilient supply chains and revitalize American manufacturing per Executive Order 14017. A wide variety of Congress members and former military officials have urged the Administration to consider polymetallic nodules as a component of its national critical mineral strategy.
TMC CEO and Chairman, Gerard Barron, commented: “This is a big step in the right direction for the United States towards securing a stable supply of responsibly-sourced critical minerals. The U.S. House of Representatives has, through the National Defense Authorization Act for fiscal year 2025, designated
In addition, TMC's U.S. subsidiary has an outstanding application seeking a
In March, TMC welcomed the introduction of the Responsible Use of Seafloor Resources Act (RUSRA) by members of the House of Representatives calling for the U.S. to “support international governance of seafloor resource exploration and responsible polymetallic nodule collection by allied partners” and to “provide financial, diplomatic, or other forms of support for seafloor nodule collection, processing and refining.” That same month, TMC also applauded a letter from around 350 former U.S. government officials and military officers - including former Secretary of State Hillary Clinton - urging the U.S. Senate to re-evaluate a formal vote on ratifying the United Nations Convention of the Law of the Sea (UNCLOS) treaty. Earlier, congressional leaders and several members of the House Armed Services Committee urged President Biden to assess domestic processing of seafloor polymetallic nodules as a means to secure key energy transition metals and “close national security vulnerabilities.” Within the last month, two contractors sponsored by the government of China announced plans to conduct nodule collection trials in 2025 in international waters.
About The Metals Company
The Metals Company is an explorer of lower-impact battery metals from seafloor polymetallic nodules, on a dual mission: (1) supply metals for the global energy transition with the least possible negative impacts on planet and people and (2) trace, recover and recycle the metals we supply to help create a metals commons that can be used in perpetuity. The Company through its subsidiaries holds exploration and commercial 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.
Contacts
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Forward Looking Statements
This press release contains “forward-looking” statements and information within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as “aims,” “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “plans,” “possible,” “potential,” “seeks,” “will” and variations of these words or similar expressions, although not all forward-looking statements contain these words. Forward-looking statements in this press release include, but are not limited to, TMC’s expectations with respect to a successful grant application under the Pentagon’s Defense Production Act Title III program for feasibility work on a domestic refinery for nodule-derived intermediate products . The Company may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements, and you should not place undue reliance on these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements as a result of various factors, including, among other things: the Company’s strategies and future financial performance; the International Seabed Authority’s (“ISA”) ability to timely adopt the Mining Code and/or willingness to review and/or approve a plan of work for exploitation under the United Nations Convention on the Laws of the Sea (UNCLOS); the Company’s ability to obtain exploitation contracts or approved plans of work for exploitation for its areas in the Clarion Clipperton Zone; regulatory uncertainties and the impact of government regulation and political instability on the Company’s resource activities; changes to any of the laws, rules, regulations or policies to which the Company is subject, including the terms of the final Mining Code, if any, adopted by ISA and the potential timing thereof; the impact of extensive and costly environmental requirements on the Company’s operations; environmental liabilities; the impact of polymetallic nodule collection on biodiversity in the Clarion Clipperton Zone and recovery rates of impacted ecosystems; the Company’s ability to develop minerals in sufficient grade or quantities to justify commercial operations; the lack of development of seafloor polymetallic nodule deposit; the Company’s ability to successfully enter into binding agreements with Allseas Group S.A. and other parties in which it is in discussions, if any; uncertainty in the estimates for mineral resource calculations from certain contract areas and for the grade and quality of polymetallic nodule deposits; risks associated with natural hazards; uncertainty with respect to the specialized treatment and processing of polymetallic nodules that the Company may recover; risks associated with collective, development and processing operations, including with respect to the development of onshore processing capabilities and capacity and Allseas Group S.A.’s expected development efforts with respect to the Project Zero offshore system; the Company’s dependence on Allseas Group S.A.; fluctuations in transportation costs; fluctuations in metals prices; testing and manufacturing of equipment; risks associated with the Company’s limited operating history, limited cash resources and need for additional financing; risks associated with the Company’s intellectual property; Low Carbon Royalties’ limited operating history and other risks and uncertainties, any of which could cause the Company’s actual results to differ from those contained in the forward-looking statements, that are described in greater detail in the section entitled “Risk Factors” in TMC’s Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 25, 2024, as amended. Any forward-looking statements contained in this press release speak only as of the date hereof, and the Company expressly disclaims any obligation to update any forward-looking statements contained herein, whether because of any new information, future events, changed circumstances or otherwise, except as otherwise required by law.
FAQ
What funding has the U.S. House of Representatives allocated for TMC's nodule refining feasibility study?
When does TMC plan to start commercial-scale nodule collection?
What is TMC's U.S. subsidiary applying for under the Defense Production Act Title III program?
What metals are targeted for refining in the proposed legislation supported by TMC?
How does TMC's plan align with U.S. national strategies?
