EV battery metals firm DeepGreen to go public in SPAC deal

MELBOURNE (Reuters) - Canada’s DeepGreen Metals Inc, which aims to produce metals for use in electric vehicle batteries through deep-sea mining, plans to go public in a merger with a special purpose acquisition company (SPAC).

The deal with U.S.-based Sustainable Opportunities Acquisition Corp will value the combined entity at $2.9 billion and include a $330 million infusion from investors including Allseas Group SA, Maersk Supply Service and Glencore, DeepGreen said in a statement on Thursday.

The merger is expected to be completed in the second quarter, it said.

Vancouver-based DeepGreen intends to produce from 2024 metals from polymettalic rocks, found deep in the Pacific Ocean, for use in batteries that will power electric vehicles (EVs).

The method it will use is deep-sea mining, which critics say is an untested mining method with a largely unknown environmental impact.

Australia banned seabed mining off part of its northern coast last month, citing the potential impact on the environment.

Greenpeace has stepped up its advocacy against the activity in recent months. It is calling on global governments not to sponsor any deep seabed mining, related research or exploration, and to halt development of a mining code under the International Seabed Authority.

“There is nothing sustainable about carving up the seafloor for mining,” Greenpeace spokeswoman Nelli Stevenson said, when asked about DeepGreen’s mining plans.

“The deep ocean must remain off-limits to the mining industry to prevent further biodiversity loss and potentially damaging a critical carbon sink.”

DeepGreen did not immediately respond to a request for comment.

Last year, it bought out part of Nautilus, a company that planned to mine the seafloor but ended up going into liquidation.

Shares of Australian investment firm Cadence Capital Ltd, which owns a 2.8% stake in DeepGreen, rose as much as 15.7% on Friday to their highest in more than two years. Cadence said the listing would boost the net tangible assets of its shares.

Sustainable Acquisition Corp, a so-called SPAC, raised $300 million in an initial public offering in May last year.

SPACs are shell companies which raise funds to pursue an acquisition at a later date. The deals are an alternative to a traditional IPO for companies looking to enter public markets.

The combined entity will be called The Metals Company and will be listed under the ticker symbol “TMC”.

Nomura Greentech and Citi are the financial advisers to DeepGreen and Sustainable, respectively.

Reporting by Sohini Podder and Rithika Krishna in Bengaluru; Editing by Shailesh Kuber and Muralikumar Anantharaman