Why is DeepGreen Valued at Nearly $3 Billion?
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Electric cars are growing in popularity. According to recent statistics by Cox Automotive and Kelley Blue Book, electric car sales jumped up by 81% at the first of this year. Consumers hoping to reduce their environmental footprint have found a way to do so.
In order to make this more accessible, a fast-growing company known as DeepGreen plans on gathering the materials for more electric car batteries than ever.
What is DeepGreen?
Deep sea mining company DeepGreen hopes to go public soon
DeepGreen is a Canadian mining company. Founded in 2011, the startup focuses on harvesting minerals from deep underwater (known as nodules). These minerals contain metals that could be revolutionary in the eco-friendly energy space. Specifically, the minerals can be used to build electric car batteries.
While electric car batteries are normally costly, the large supply of these minerals underwater will make them, and thus electric vehicles, more widely available. All the while, this reduces the harmful effects of mining on land. These harmful effects include land use conflicts, environmental impacts, and more, according to BioMed Central.
DeepGreen’s Plans to Go Public
DeepGreen’s purpose to reduce the environmental footprint of electric car batteries wound up being quite popular with investors. In March, the private company announced plans to go public through a merger with Sustainable Opportunities Acquisition Corporation (SOAC).
The merger is expected to go into effect in Q3 of this year, and the merged company will be known simply as “The Metals Company.” Valued at over $3 billion, the deal appears to be a success. However, rising opposition made it questionable to many.
The first concern was with investors. The merger will be carried out through what’s called a Special Public Acquisition Company (SPAC). While it is a popular option for many private companies to go public in a timely manner, these companies are far less regulated. The risks to investors in these cases increase.
However, environmentalists present much larger concerns. Many environmental scientists spoke out against the company for mislabeling the effects of deep sea mining.
Currently, environmental scientists are fighting across the globe against the company, as well as deep sea mining in general. According to them, the effects of harvesting nodules isn’t well understood. Unless more studies and tests are conducted, this company could lead to massive environmental destruction.
While there are currently 22 organizations (including DeepGreen) authorized for deep sea mining, DeepGreen is the only one to go public. Because of this, more public attention is on the company to see what will happen next.
DeepGreen’s influence overseas
DeepGreen has much more power than going public, however. Back in February 2019, Nauru (a small Pacific island) broke UN protocol by allowing a DeepGreen official to speak directly to the organization. This executive spoke of transitioning away from fossil fuels and said that the company would bring about the future of environmentalism.
DeepGreen is also partnered with certain Pacific island states (including Nauru) that give it rights over almost 90,000 square miles of the ocean. Some critics argue that the company has too much power over these developing nations, as they have limited ability to fight back.
These nations may also be held responsible if the environment is negatively affected by their deep sea mining. This may put the company front and center as the cause of a multinational crisis.