Edison Investment Research Limited
London, UK, 13 July 2022
The Metals Company (TMC): Initiation - Mining battery metals for electric vehicles
Decarbonisation of the transport sector is driving demand for battery materials, particularly nickel. Under licence, The Metals Company (TMC) has been exploring nickel-rich nodule deposits on the deep seabed of the western Pacific. Its NORI-D block is estimated to contain 3.8Mt of nickel along with other key metals. The company is looking to move to commercialisation, the key being the award of the first ever deep-sea mining exploitation licence, which would significantly de-risk the project.
Our 2022 risked valuation range for the PEA/PFS stage of development of the NORI-D project is $244–484m using 2021 long term metal price forecasts ($719-1,278m using June 2022 metal prices). This increases to $552–1,182m (1,433-2,857m June 2022 metal prices) on award of a licence and to $4.8–6.3bn ($10.9-$14.2bn June 2022 metal prices) on full commercialisation. This includes additional financing requirements such as c $150m anticipated in 2023 to complete the licensing and commence mining. Our valuation reflects only NORI-D, 22% of TMC estimated reserves. We have excluded TMC’s next project, TOML-F, estimated to comprise 70% of NORI-D resources, to reflect the earlier stage of development.
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