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Marine Science

DEEP-SEA MINING COMPANY HAS MISLED INVESTORS AHEAD OF IPO

DEEP-SEA MINING COMPANY

Deep-sea mining company has misled investors ahead of IPO. Greenpeace USA, the Deep Sea Conservation Coalition (DSCC), and Global Witness have sent a letter to the U.S. Securities and Exchange Commission (SEC) calling into question deep-sea mining company DeepGreen’s environmental impact and feasibility statements ahead of the company’s attempt to go public. The letter states that DeepGreen — which recently agreed to go public through a merger with Sustainable Opportunities Acquisition Corporation (SOAC) —  has not credibly represented how it will manage the risk of untested mining of the deep ocean floor, which threatens to mislead the investing public around the profitability of the company.

“DeepGreen is selling a bill of goods before going public and it is time for the SEC to step in and protect both investors and the biologically rich seabeds in our ocean,” said Greenpeace USA Senior Oceans Campaigner Arlo Hemphill. “The company’s lack of transparency around its potential environmental impacts does not meet the SEC’s standards for disclosure and its filing should be amended or tossed out immediately.”

Last week, Nauru triggered a “two-year rule” at the International Seabed Authority (ISA), which would allow DeepGreen to obtain a deep-sea mining (“exploitation”) contract from the ISA in two years with whatever rules, or lack thereof, are in place at that time. The obscure loophole circumvents the participatory global process for governments to properly negotiate and agree upon whether to allow deep-sea mining and, if so, collect sufficient information to make decisions on how to regulate mining activity. Instead it fast tracks a permitting process to allow DeepGreen — soon to become The Metals Company if its merger with SOAC is approved — to plunder the seabed for minerals and metals without proper controls or understanding of the environmental risks or consequences. DeepGreen has previously spoken on behalf of Nauru at the ISA and has a contract with the body to explore for minerals in the eastern Pacific Ocean between Hawaii and Mexico sponsored by the Nauran government.

Matthew Gianni, political advisor to the DSCC, said:

“Governments should call for a moratorium on deep-sea mining, put a stop to this irresponsible rush to mine the deep ocean, and reform the ISA. The risk of hasty or bad decisions taken by the ISA, which could result in the destruction of deep-sea ecosystems that would take thousands or millions of years to recover, stretches far beyond the seabed to the wider ocean and could threaten the ocean’s role in climate change mitigation.”

Scientists and Pacific resistance leaders have warned that deep-sea mining would have irreversible impacts on ecosystems, ocean life, and communities across the region. The deep sea also soaks up enormous amounts of greenhouse gases and heat and opening up these carbon sinks to deep-sea mining could have significant impacts on planetary health for future generations. Activists from the Pacific and around the world are calling for an urgent deep-sea mining moratorium to help protect our ocean, biodiversity and climate.

“If humanity has learned anything from the escalating impacts of the climate crisis and the onset of the sixth extinction event, it is that we should not be catapulted into opening the Pandora’s box of seabed mining and unleashing the harms it contains, which even DeepGreen admits they don’t have a clue about — I can barely imagine anything more dangerous and irresponsible. World governments must call for an immediate moratorium on deep sea mining,” said Patrick Alley, director of Global Witness.

The Deep Sea Mining Campaign also recently alerted shareholders, the SEC, and the New York Stock Exchange to numerous risks and liabilities around the DeepGreen and SOAC merger. The group’s shareholder advisory raises concerns including that deep-sea mining is inherently unsustainable; that the business proposition is speculative and experimental; that the liabilities due to environmental damage are insufficiently disclosed; and that there are governance risks both externally and internally.

The letter sent to the SEC can be found here: https://www.greenpeace.org/usa/wp-content/uploads/2021/07/SEC-letter.pdf

The June 22 SEC filing can be found here: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001798562/000121390021033645/fs42021a2_sustainable.htm

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