Letter to SOAC Investors
YOUR VOTE AT THE SOAC EGM MATTERS
Vote to protect your money, your reputation and the health of the Pacific Ocean and its Peoples
31 August 2021
We are writing to you as a listed shareholder in Sustainable Opportunities Acquisition Corp. (SOAC).
If you registered prior to 21st June, you will have been invited to attend the Extraordinary General Meeting (EGM) on 3rd September to approve the proposed business combination with DeepGreen Metals, to create The Metals Company (TMC) – or to exercise redemption rights on your public shares.
We have previously sent you our analysis of the proposed business combination highlighting both investor and ESG risks.
The business case for TMC presented by SOAC raises many questions about the viability of the business, the impacts of deep sea mining (DSM) as predicted by science, and potential wide-ranging liabilities.
It is not clear that the experience, histories, and goals of SOAC and DeepGreen’s Directors are a good match for investors seeking sustainable solutions to climate change.
We hope the points below assist you in your deliberations.
1. Is TMC a viable business proposition?
Investors in SOAC are presented with a high-risk mining venture lacking financial and technical feasibility data. Fundamental aspects such as estimates of future revenues, operating expenditures, and the value and size of mineral reserves are based on speculation.
Changing battery technology means the metals TMC plans to mine may well be redundant; there is no known market for the high volume of unconventional manganese silicate that TMC plans to produce. Market acceptance of metals sourced from DSM is already precarious with global businesses, international fisheries bodies, governments, scientists and civil society calling for a moratorium or a ban on DSM.
Investors in TMC could well be left with a stranded asset.
The 2024 start date for commercial production appears fanciful given the experimental status of DeepGreen’s equipment and operating systems, and their ambitious design concepts are far from offering proof of operational efficiencies.
Triggering the 2-year rule by DeepGreen’s sponsoring state Nauru may well backfire. This strategy to expedite the International Seabed Authority (ISA) granting their mining licence could meet significant resistance from ISA member states. The 47 African member nations have already indicated their opposition to licences being granted if the rules for DSM are rushed. Other member states could be anticipated to follow their lead.
It is also currently not definitively known how the risk of biodiversity loss in the CCZ could be eliminated or reduced through mitigation strategies or how long it will take for disturbed seabed areas to recover naturally … impacts on CCZ biodiversity may never be completely and definitively known.
2. How can TMC be an environmentally sustainable investment?
TMC’s business case rests upon large-scale industrial mining of the Pacific Ocean bed that supports healthy and diverse ecosystems.
Scientists predict that DSM will have significant environmental impacts which will effectively be permanent in human timescales. Impacts on valuable commercial fisheries, local artisanal fisheries, ocean-based tourism and human health could be expected to result in significant liabilities.
Deep sea mining has been rejected by financial institutions, the United Nations and EU bodies as a sustainable economic activity.
Objections lodged with the SEC about SOAC’s misrepresentation of TMC as sustainable resulted in the S4 Prospectus being revised several times. These revisions concede that the impacts of TMC on biodiversity and ocean ecosystems may never be known, biodiversity loss and species extinctions may not be prevented, and impacts of mining nodules may in fact not be greener than land based mining.
The Ocean has been the lifeline of our Ancestors and remains the womb that nourishes our lives and ensures our existence today.
The irreversible nature of Deep Sea Mining would spell extinction for Tongan people and genocide for all Pacific Islanders.
We only have two real resources in Tonga – our people and our fish.
Your signatures approving the merger of The Metal Company will be a death warrant to not only Tongans but Oceanic people in the whole Pacific Region.
3. Is history repeating? Will TMC go the way of bankrupt Nautilus?
DeepGreen CEO Gerard Barron was an original seed investor in the failed DSM venture Nautilus Minerals. Having talked up the company’s prospects, Mr. Barron exited before Anglo American divested and mainstream finance declined involvement. The company was liquidated in November 2019 leaving investors out of pocket.
Like Nautilus, TMC is a speculative venture.
Finance houses and insurance companies are becoming increasingly aware of the risks the company carries and the opposition it faces.
SOAC shareholders would be well advised to review the accounts contained in the proxy statement and determine for themselves who primarily stands to gain from this business combination and who may end up losing.
The Pacific Ocean is our home. We live in it, we depend on it for sustenance, for our livelihoods and economic wellbeing. Our cultures are based on deep knowledge and spiritual connection with the ocean.
Shareholders of SOAC, are you aware that Pacific civil society organisations are contesting our own governments opening the door to deep sea mining (DSM)? The leaders of a few small Pacific Island states may have been falsely persuaded that DSM will be a safe and profitable solution to climate change. The science on impacts paints a different picture and the business proposal presented to you is based on spurious claims and creative imagination.
We have not been consulted, let alone given our consent to DSM. DeepGreen is using Pacific Island states to experiment with this destructive form of mining in our Ocean. Should you invest in TMC, the costs and obstacles you will face from our growing public opposition will place your investment at risk.
SOAC shareholders please heed our concerns and do not vote to invest in TMC.
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