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Episode 206: Deep-sea mining for the environment, ft DeepGreen Metals CEO Gerard Barron

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‎The Northern Miner Podcast
Duration: 01:02:51
This week’s episode features DeepGreen Metals chairman and CEO Gerard Barron, who discusses the merits of deep-sea mining as an environmentally-friendly method of resource extraction. Gerard talks about his previous investment in Nautilus Minerals, the strategy behind mining polymetallic nodules, an
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This week’s episode features DeepGreen Metals chairman and CEO Gerard Barron, who discusses the merits of deep-sea mining as an environmentally-friendly method of resource extraction. Gerard talks about his previous investment in Nautilus Minerals, the strategy behind mining polymetallic nodules, and what it's like to deal with the International Seabed Authority and the United Nations on mining projects.

All this and more with online editor and host Adrian Pocobelli.

Visit DeepGreen Metals at: deep.green

This episode’s Mining Minute features Petro Canada Lubricants Sr. Technical Advisor Gord Susinski. Learn more about the product line at: https://lubricants.petro-canada.com/

Music Credits:

“Rattlesnake Railroad”, “Big Western Sky”, “Western Adventure” and “Battle on the Western Frontier” by Brett Van Donsel (www.incompetech.com).

Licensed under Creative Commons: By Attribution 4.0 License
creativecommons.org/licenses/by/4.0/
Snippet Transcripts
and coming up, we have Gerard Baron who is chairman and Ceo of Deep Green medals and Gerard Baron is a seasoned entrepreneur with a track record of building global companies and battery technology, media and future oriented resource development, Both as a chief executive and strategic investor. He became involved in the early strategic development and financing of deep green during its formation in 2011 and stepped into the role of Chairman and Ceo in 2017. So it was a very interesting interview again, I think you're going to get uh a real window into the cutting edge of deep sea mining. So here's my interview with Gerard Baron of Deep Green metals. Mhm. Mhm. Happy to welcome Gerard Baron who is Chairman and Ceo of Deep Green medals and I believe they're based out of London, Welcome to the show, Gerard, it's great to have you on. Thanks Adrian, it's a pleasure to be with you. So, Gerard, we came across an article a few weeks ago on what you guys were doing. And I think the thing that struck me most and you guys are into deep sea mining was the approach you guys were taking. It seems like you're bringing a lot of scientists on board and deep sea mining has been very controversial in the past. Remember nautilus minerals was being attacked by environmental groups for potentially doing damage to the sea floor. Tell us about what you're up to with deep green medals. So let's start with the big picture. And the big picture question for society is where are the best supply of these virgin laws that we need to build the batteries? And when I say the best supply, I mean from an environmental perspective and from a societal perspective. And so we believe that deep green, that that answer is in the form of poly metallic modules. And so I was pleased that, you know, you noticed how many environmental scientists we have in our team because we now have over 100 and 50 of the world's leading ocean scientists working on our environmental program. And that's one of the questions that were seeking answers to. And that is what are the impacts of collecting these medals from 4000 m below sea level. And so we're we've launched the largest ever ocean floor to ocean surface environmental study to understand what's the impact of removing these modules? What's the impact of some of the dust that will be created as we as we collect them off the ocean floor? And will there be any impact of having our riser operate through the water column? So yeah, so that's that's kind of the big picture seeking answers to those questions and hopefully providing a very large and abundant supply of these materials that we need to build the batteries. Very interesting. So how did you personally then come to this project? Do you come out of mining? Are you you come out of ocean science, what is your background and what brings you to this very kind of pioneering area in mining? I mean, there's space and there's the ocean that are kind of the more pioneering areas. How did you get here and what brought you here? Yeah, so I'm certainly not a minor, in fact, the first company that I started was back at university too many years ago to remember now, but I grew up in a dairy farm in Australia and and started my first company in second year. And I've been lucky enough to be building companies ever since. And I'm attracted to difficult challenges. Some would say impossible challenges. But and I guess where it all started was back in 2001. A friend of mine worked at a company called Nautilus that you just mentioned. I knew nothing about mining, I knew nothing about medals actually. And but I was fascinated to learn that the oceans were filled with metals and I thought, wow, that's really interesting, That must be a better way of producing metals than digging up rainforests and destroying a limited resource that is land anyway. So I I seed funded that business and you know, worked with the ceo to help raise more money. But I, the gift to me of from Nautilus was learning about modules because Nautilus was focused on sulfides, which I don't believe that the answer, I think the answer is polly Metallica like modules. And so, you know, I I then provided some capital when the company started back in 2011 and I was busy running one of my other companies and and you know, I also helped the company raised money from outside investors and then I just kind of have that life moment where I started to reflect on what am I doing? Like I started to understand the impacts of climate change and the existential risk it posed. And then I realized by digging deeper just how how dangerous producing more medals could be. You know, if we it's a little bit like fossil fuels, you know, they were very important obviously in the last industrialization, but the unintended consequences were enormous. And I started to realize that the same thing could happen when it came to medals that we think we need more medals to get away from fossil fuels, but what are the what's the impact of doing that? And so I then stepped in to take over running the company. And at the time we had a very senior mining executive leading the charge and I realized that's not what we need. We need to address this from a environmental perspective. And it's very hard to have a A career driven mining executive, particularly one that had run a coal business to be leading the messaging around this opportunity. And so I stepped in back in 2017 and reinvigorated the strategy. And I must say I'm super, super pleased with the results. And so, you know, we're often a very exciting journey. It's so interesting, you're sort of filling in the pieces of the puzzle there for me because when I was reading that article that we had On you a few weeks ago, I thought to myself, this is not business as usual, that's going on with deep green as far as bringing on university scientists from what looked like. Yeah. Like you said, there's something like 150 or you know, from institutions all over the world and you know, we had just profiled some other deep sea company whose name escapes me right now and you didn't get the sense that they were concerned about the environment so much. I mean everybody says they are, but for them they were taking Mexico to courts under Nafta because of their weren't allowed to mine in certain areas. And you guys as a noted on that, so you guys are taking the exact opposite approach. And so I guess that you're not coming out of mining for example, I guess is part of that? The mining side is, well, firstly we shouldn't even call what we're doing mining because you know, poly metallic modules lie on the ocean floor. We don't have to dig for them or blast or tunnel, we just have to collect them, but we're not kidding ourselves collecting, we'll even have impacts because we'll have to have a tracked vehicle operating on the ocean floor and that's going to run over, you know, the seabed and that's going to kick up a bit of dust and so on. But you know, the whole reason why, you know, I guess figured that we need to win this from an environmental perspective is because we have to present choices. You know, we have to be grown up about this, that we need to move away from some fossil fuels. We need to build more batteries. Everything we do has an impact. Okay. The question is, how do these set of impacts compared to the No. One set of impacts that currently we experience from land based mining? Okay, so we've all we've all understood the impact of fossil fuels. But do we really understand the impact of mining these medals? And what will be the impact if we electrify the fleet? If we move away from fossil fuel driven power, it's going to be enormous. And so that's why we funded white paper was independently authored. That focused a full life cycle analysis around what will be the impacts across a very broad range of areas of if we electrify a billion of those cars that are currently driving around on the roads, because that's what's going to happen right? We're going to take cars off the road and we're going to replace them with electric vehicles. Not as many, I hope, but we replace them. And so, you know, that white paper Just further proves what we already knew and that was that we can we can compress co two emissions by more than 90%. If we build these batteries with Nagy als compared to land-based sources, we can we can generate zero tailings. Just imagine that. Imagine none of those dams bursting in Brazil, all of these tailings that have been dumped into the coral triangle off Indonesia. Imagine no waste material because we use 100 of the rocks that we collect. So, you know, we just figured we need to put the data, we need to put the facts in place. And so and we were very pleased only in recent days that the Journal of cleaner production published a subset from that white paper that was peer reviewed which just focused on the CO two impacts. And because we know that people get emotional about this, people get emotional about what about the oceans, what will happen Because they've seen what the land based mining industry has done and they just assume it's going to be the same but it's not the same. Okay. And I want to flush that of it. So what did Nautilus get wrong then? Because I remember quite a few environmental groups or at least one very prominent one at the time was making a lot of noise. And yours I guess associated with Nautilus. So what did they get wrong? And were they being misinterpreted or were they actually getting certain sort of process things wrong? And what are you doing differently? Yes. I think nautilus had very good rigor. You know, they prepared a great environmental research program. They carried out all their studies but they had a few what I believe to be fatal flaws. One is they were going after sulfides and as you know, sulfides formed through volcanic activity. And they are on the ocean floor the same way they are in the countryside and to extract them. You've got to send down big heavy machinery and you've got to turn big rocks into little rocks and then you've got to pump them to the surface. So that's not the case with us. We have billions of tons of these modules that lie unattached, think of golf balls on a driving range. So that's one very, very big difference. The other thing about nautilus was they knew those systems were there. They just didn't find too many of them and they think in the end they only had eight million ton resource. Whereas in our case we, our Canadian company, We have a two resource statements, totally 1.6 billion tons. That's enough nickel, cobalt, copper and manganese to build 255 million electric vehicle batteries, 75 kilowatt batteries. So it's very, very large. The other thing is that they are operating in Papua new guinea and that's one of the challenges the mining industry faces, that some of these developing country jurisdictions are challenging because they change the rules midway through governments get voted out and the new government doesn't have the same view. Sometimes you're dealing with corruption, sometimes you're dealing with just people that don't want to do things. And so that's very challenging if you're having to invest billions of dollars. And so from a deep green perspective, very different resource, very large, very easy to understand. The difference is the fact that we don't have to dig and break rocks into smaller rocks is a massive advantage for us. So I'd like to think many lessons were learned from Nautilus. And I think that's saying that the pioneers often end up with the arrows in the back is a perfect and apt description of nautilus. Had they not done what they did, then those lessons may not have been learned. And those lessons will be very important for our future. And so from that perspective, we must remember Nautilus, never mind a single thing. They spent a lot of money, hundreds of millions of dollars trying to get started doing environmental studies. And so, you know, that's the other thing that we can't be too harsh on them because they were also in the middle of the GFC, right? That was the other challenge for them. So if anything could go wrong, I think it did go wrong for them. And I'm very sorry for them. But you know, we're lucky and fortunate to have learned. And you know, look at, look at our timing. You know, now we're at a stage in society where we all understand why we need to move away from fossil fuels, Where are we going to get these new virgin oils from? So so our good fortune. So nautilus was in PNG or near it in the waters. Where are you guys finding these modules? How do you even stakeout claims in the ocean? Like where are You? So well to understand that we have to go back to the 1870s explorers wanted to know what lay on the bottom of the ocean. And so an expedition set off funded by the royal Society on a boat named the H. M. S. Challenger and the steam piston had just been developed. And so the H. M. S. Challenger traveled around the world with the dredge off the back of the boat and they hold up the dredge regularly and mapped what they found. And these modules were found in a variety of locations. But there's one area of focus and that area is known as the clarion cliveden Zone. It's about 1000 miles Off the coast of Mexico, and it's a fracture zone that runs about 4000 miles long and it's the perfect breeding ground for these nodules because they actually, they precipitate the metals that are in the ocean water and that are in the ocean sediment. So, nah Jal's in this area are rich in nickel and copper and cobalt and manganese, but the nickel and copper are the two key ingredients here, because the rockies and the Andes were once covered in nickel and copper. And so as all of those mineral tops eroded through rivers and and other means into the pacific ocean, they settled to form the mineral feedstock for these modules to grow. So nodules were found in other locations as well. But they're pretty well on economic to recover because they just basically iron hydroxide with some manganese in it, but just not worth collecting. You can you can go and dig up iron ore in the Pilbara for a fraction of the cost. So, a very unique area. Very interesting. And so who do you talk to? Is there some sort of un treaty that you can go in there or do you talk to Mexico? Like who do you get permission or do you need permission? Like how does this Work? Yes. Well, great questions from the 1870s. Fast forward to the 1970s when the industry started to get going. And there were many companies involved, Shell and BP and Mitsubishi and Rio Tinto were there through Canada cops and inco And Lockheed Martin and they were all focused on building these systems to collect these nodules from 4000 m below water. Now, they operated on the premise that they would be able to lay claim over the area. But the problem was, no one had agreed, the world hadn't agreed who owned the oceans. And so it was Henry Kissinger who wrote to all of the ambassadors and said, hey, we America wanted lay claim to this part of the pacific and as you can imagine, all the ambassador's got together and said, well that doesn't sound too equitable. No. And so they all had to go and do something else. And so that was in the late 70s. Finally, in 1982 unclos was agreed. The United Nations Convention of the Law of the Sea. And basically what that says is that as a sovereign, you own everything within 12 miles of your coastline And you have an economic right to everything within 200 miles. But beyond that, it belongs to everyone. It's the common heritage of mankind. And so the United Nations set up the International seabed Authority and they are the governor of the high seas. And so it is from them that we have three exploration licences and they're very familiar with terrestrial licenses. You know, you get a Exclusive right for 15 years to do your work to improve the ground and to move from exploration to exploitation. And that's what we're doing right now. We're in the middle of our feasibility work so we can submit our application to move from exploration to exploitation. And yeah, that's what we're spending hundreds of millions of dollars doing so just a little bit on the nitty gritty. So do you send a little email to the UN and say, hey, we're going to, we're going to the latitude and longitude or, or who pays you pay taxes like Yeah, good question. Just a little, just quite like, how does that all work? Yeah, sure. Well, first of all, you have to go and understand and floss. And so to understanding the regulatory regime is, uh, well, takes time and takes a lot of resources and that's what we've been busy doing for more than a decade now. And so you then have to put forward a plan. And that plan is about how you want to go exploring, um, you know, parts of the high seas, the international waters. So you put an application together, you have to pay over a considerable application fee. And you then scope a plan of work with that application and the regulator considers it. And then you learn whether you've been successful or not. And of course, once you're successful, then the money spent really begins because you have a work program you're committed to now. We, along with everyone else are currently still in the exploration phase. So we're in the science business really of getting answers to these questions. And you know, I think Our plan is to have our first production operating by 2024, so there's still a few years away. But as far as royalties go, there will be a royalty, a very handsome royalty paid to the regulator to the International Seabed Authority. And unclos was very clear on what should happen to that royalty. It should be, it should be distributed to the developing nations and particularly those landlocked nations that have notions of their own. And so it's an opportunity of developing nations to participate. And in fact, another provision of UNclos allowed for a developing country to sponsor a private company and that's how we currently have licenses because we have a block sponsored by Nauru, one sponsored by the Kingdom of Tonga and another sponsored by Carrabba's. And so this provides those developing countries a real opportunity to participate in the development of a new industry. And you know, it's ironic that those nations that have contributed least to climate change will be the first to be impacted by climate change through rising sea levels. Both Tonga and Carrabba's are at great risk of disappearing through rising sea levels. So this provides their economies with some hope they will have an opportunity to employ lots of people on these projects. They will earn royalty streams themselves once we are in production and at the moment, those economies depend very heavily on fishing rights and foreign aid. So this is an important opportunity to spread some of that economic benefit. Okay, and just to clarify, so when you say the regulator, is that the UN or body of the UN? No, it's the International Seabed Authority which was which was is that an international panel of their board? think of it as an organization very similar to the one. So it has a 167 member states and plus the European Union, so 168 in total. And so it operates just like the United Nations does through a consensus type platform. And so the negatives are, it's slow. It was set up in 1994 with the express purpose to put in place a regulatory regime to allow the development of this industry. And here we are in 2020 and we're just getting there. But that also has some benefits because, you know, they are very careful there, steady, slow and careful and I think that's a that's a positive thing. And final question just on this before we move to the economics of this project, are the U. S. And china. Have they signed on to this china has and the U. S. Signed it but did not ratify it. And so it was held up in the Senate. But we see that as a pretty low risk factor because the US participates in the council meetings. They certainly fund a big part of it through the of course, and that it became a little bit of a political football in the end. But all these global things in the Senate. Yeah, we if you haven't caught it, we had a 60 minutes did a very interesting piece last year on the topic and they came aboard our research vessel and featured the industry. And their question was why America are we not signing this? We're missing out on some great economic benefits. So, but of course what America really wants is access to the metals. Because without manganese, you can't next deal without nickel, you can't build battery cathodes. And I think one of the impacts of this whole pandemic was we got to see how fragile supply chains are and we got to see the dangers of globalization. And I think countries want to build their own supply chains now and not being entirely dependent on Asia. Yes, absolutely. You see that in the antibiotics and prescription drugs, especially, hopefully they're concerned about that. Okay, so now tell us about the economics of the project, I guess you're dealing with a whole different, I mean, you're not doing grams per ton. You're really in the business of collecting modules. Which sounds like it's actually could be pretty cheap once you figure out how to get down there and pick these things up without too much damage here. It's a bulk commodity. It's a bulk commodity and, you know, beans. You know, we we have a a fantastic partner who we're working with right now. Their name is also sees that one of our shareholders and they're one of the largest pipe layers for the deep ocean oil and gas industry. And they, like many in that industry, saw that the industry was coming to a slowdown and they needed to diversify. Now there are very engineering company, more than 600 engineers in their research area. And so we're working with them to build the most low impact collection system possible, but it's a bulk commodity, you're right. But when you get to start something of fresh, you get to reimagine it a little bit as well and you get to take all of those learnings and apply it to a new industry. And if one of your objectives is to minimize the impacts, then you can design around that. And so that's one of the benefits we have. But eventually we don't know now what the most efficient way of collecting modules will be economically, but we're going to find out. We've got a lot of companies who are beating a path to our door, who are wanting to enter agreements with us to come and develop systems to collect modules. And from our perspective, we have a lot of resource, the door is open, come and sit down with us and let's understand what the requirements are. Let's understand the hurdles that one has to be able to jump over and then we need to be collecting these medals because if you if you tuned into battery day from Tesla the other day, what I heard about it, Yeah, it was fascinating. I mean if if, if Helen is right and we're going to need 20 tera watts of annual battery production to move away from fossil fuels, that's going to take a lot of nickel, lot of nickel. Okay, interesting. And so just wrapping up here. So are you guys going to do a preliminary economic assessment of some kind or what's the road map as far as we? Have you already? Have you already done that? Like what's that? Yeah, we did that. So we've, we've completed that some years ago. We're now through the pre fees. Um, not finished it because we need to launch our pilot harvesting system And you know, on a pathway to bankable feasibility study with a view of being in production by 2024. So it's all, it's all full steam ahead at the moment, right? And you see a profitable venture here because I mean everybody can be all trying to do something environmental, but you see a way of making money here. Well, I guess with any resource it's about great and the grade of this resource is off the charts. So if we think about last year, the average greater copper was mined was less than half of 1%. So that's a lot of dirt you're having to dig up and move about in process to get a little bit of copper. Whereas our resource has 1.1 copper, We have 1.4 nickel, we have about .2 Cobalt and about 30 manganese all in the same town of material. So the grade is off the charts and the efficiency is very good as well because we, because we don't have levels of deleterious elements that need special processing, it means no tailings, it means no waste material. And so that has a big impact on the economics and so we will comfortably be in the bottom quartile as far as cost goes of all of those medals. And so that puts us in a very strong economic position. And combined with the environmental advantages, we think it's the right time to be pushing ahead with this industry. Okay. And final question, have you guys decided or figured out where you're going to process these metals or these nodules? Are you going to send him to a company in Canada or you have your own place? Have you figured that out? Sure. Well, we're in the process of figuring it out right now. We completed our first past slight study selection back in early 2019 and we're negotiating with governments right now because one of the other tremendous advantages of this resource is that you can collect more Nagy Als, you can put them on a ship and you can send them to North America, you can send them to europe, you can send them to Asia or to Africa or or down to Australia. So you're not hemmed in by infrastructure and that's something not to be underestimated. So our job is to evenly distribute that out. But you know with the land based project you can get so much production out the door, but then you might have to build another whole set of infrastructure to be able to handle more material. So we don't have that restriction. We will construct our processing facilities near a deep water port in a stable fiscal regime somewhere with power and water and all the infrastructure that you need to make these things work. So we're busy negotiating those agreements now. And obviously one of the stimulus is from Covid will be more investment in industries that can help the green transition and this fits squarely in the middle of that. Okay, excellent. Yes. It sounds like there's a lot of flexibility there as to where you can do that. So just finally any parting thoughts for the audience drugs. Well, you know, I'd encourage everyone to keep following the story and keep asking the why. You know, we've we've got some great reference points through our presentations about, you know, the Y metrics, you know, why is this resource a better alternative to digging up more lateral rates in tropical rainforests or collecting cobalt from the congo? And so, you know, and I think the journey is going to be an exciting one. It's going to be a long one, but it's one that we want more partnerships. We want more people to come and join us in what we're doing. And so whether it's through our social channels or direct reach out, please get involved. Okay, excellent. Well, thank you. Gerard for making the time to join us on the podcast has been a pleasure to do it again.
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