New frontier for battery metals: Q&A with Craig Shesky, CFO of The Metals Company

Investing.com

10 June 2024 at 6:03 am·4-min read

In the rapidly evolving landscape of renewable energy, battery metals are becoming increasingly crucial. These metals—nickel, copper, cobalt, and manganese—are essential components in the production of batteries for electric vehicles (EVs) and renewable energy storage systems. As the demand for cleaner energy solutions surges, so does the importance of securing a steady supply of these vital resources.

What Are ‘Battery Metals’?

Battery metals are critical raw materials used in the production of batteries, which power a wide range of devices, from smartphones to electric vehicles. These metals include nickel, copper, cobalt, and manganese, each playing a unique role in battery performance and efficiency.

Nickel is essential for high-energy-density batteries and is a key component in lithium-ion batteries used in EVs. Meanwhile, copper is known for its excellent electrical conductivity and is widely used in battery wiring and electrical components.

Cobalt is used in the cathodes of lithium-ion batteries, helping to improve energy density and battery longevity. Manganese is often used in combination with nickel and cobalt in lithium-ion batteries to improve stability.

As the demand for electric vehicles and renewable energy storage systems continues to grow, securing a stable supply of battery metals becomes increasingly critical.

What Does The Metals Company (TMC) Do?

The Metals Company (Nasdaq: TMC) is an explorer of the world’s largest estimated undeveloped resource of battery metals and the world’s number one and two largest undeveloped nickel projects as ranked by Mining.com.

According to Craig Shesky, the company’s CFO, TMC’s resource in the Clarion Clipperton Zone of the Pacific Ocean contains a very high concentration of nickel, copper, cobalt and manganese, “with an estimated resource of 1.6 billion tonnes of polymetallic nodules, sufficient to support the electrification of 280 million EVs, equivalent to the entire U.S. passenger car fleet.”

He explains that the polymetallic nodules sit unattached on top of the seafloor, so “nodule collection requires no blasting, no drilling and no deep digging.”

“TMC has successfully concluded its pilot collection trial, lifting 3,000 tonnes to the Hidden Gem vessel in Q4 2022,” he adds. TMC is now targeting its first commercial production around the end of Q1 2026.

Seafloor Metals Global Market & Growth Potential

When asked about the current size of the global market for seafloor metals, Shesky told us that the experience of offshore oil and gas production provides a useful indicator, noting that in the 1970s, offshore oil and gas production was almost non-existent but now represents over 30% of the total supply.

Shesky stated: “We think that the marine minerals market is likely to take up even greater market share given the reduced planetary and human costs and the far lower resource risks of operating under an internationally-agreed regulatory framework in international waters.”

Regarding future demand, he notes estimates from the World Bank/IEA who have both said that production of nickel and cobalt for batteries, for example, will need to rise by 19x and 21x respectively by 2040.

“Add in the demands of the industrialization of the developing world and an additional 2 billion people, and we remain confident that future demand will be strong,” Shesky says. Additional tailwinds could include the requirement for carbon equalization measures and global battery passports “as the carbon, waste, and water footprint of our metals will be weighed against all land-based supply, an area where we know we will outperform.”

Furthermore, on a governmental scale, TMC and its government affairs advisors are said to have been actively raising awareness of deep-sea nodules in Washington since 2021 via and its government affairs advisors have been actively raising awareness of deep-sea nodules in Washington since 2021.

It is felt that deep-sea mining could help loosen China's grip on critical metals needed for electric vehicles and low-carbon energy. The company said it is currently engaging U.S. policymakers on the potential to process nodules domestically, which is “seeing a lot of interest from both sides of the aisle.”

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Commodity futures serve to provide a way to hedge against inflation and diversify portfolios beyond traditional assets like stocks and bonds. These contracts allow for speculation on price movements of essential commodities, offering opportunities for significant returns. The Metals Futures list in the investing.com Commodities section shows the futures prices and quotes for more than ten metals

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What Are ‘Battery Metals’?

What Does The Metals Company (TMC) Do?

Seafloor Metals Global Market & Growth Potential

Learn more about the best commodity futures

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