TMC Enters into MOU with Leading Nickel Processor PAMCO to Evaluate the Processing of Polymetallic Nodules into Battery Metal Feedstocks

• TMC and PAMCO have entered into a non-binding memorandum of understanding where PAMCO will evaluate the feasibility of processing of 1.3 million tonnes of wet polymetallic nodules (PMN) per year from 2025 onwards to produce lithium-ion battery and steel making feedstocks as part of TMC’s NORI-D Project Zero development
  
• This MoU is a key element of TMC’s stated capital-light strategy to get into commercial production with low upfront capital costs by leveraging existing production assets which require minimal modification
• PAMCO will undertake studies and testing on a 22-tonne PMN sample collected by NORI during the successful integrated collection system test completed on the NORI – D area in November 2022 to confirm the capacity and identify any additional facility requirements of the PAMCO Hachinohe facility to process PMN into nickel-copper-cobalt alloy and manganese silicate
• PAMCO is also evaluating the feasibility of a new processing facility to convert nickel-copper-cobalt alloy into an upgraded matte product
• The parties are working towards a binding MOU for toll-processing in 2023 with definitive agreements to follow
  

NEW YORK, March 16, 2023 (GLOBE NEWSWIRE) -- TMC the metals company Inc. (Nasdaq: TMC) (“TMC” or the “Company”), an explorer of the world’s largest estimated undeveloped source of critical battery metals, today announced that it has entered into a non-binding MOU with Pacific Metals Co Ltd (PAMCO) of Japan, to evaluate the toll treatment of an initial quantity of 1.3 million tonnes of wet polymetallic nodules per year at PAMCO’s Hachinohe smelting facility starting in 2025, consistent with the commencement of TMC’s planned first commercial production by end of 2024. The toll treatment is intended to take place on a dedicated rotary kiln-electric arc furnace (RKEF) processing line and produce two products: nickel-copper-cobalt alloy — an intermediate product used as feedstock to produce Li-ion battery cathodes — and a manganese silicate product used to make silico-manganese alloy, a critical input into steel manufacturing. PAMCO’s Hachinohe facility is located on the coast in northern Japan and is equipped with port and processing infrastructure required to receive and process polymetallic nodules and to ship products to customers.

Under the MOU, PAMCO will undertake studies to estimate the cost of processing polymetallic nodules through existing facilities and identify any additional equipment requirements, currently expected to be minimal. This work will inform expected nodule through-put, process operating conditions and product specifications for PAMCO’s dedicated production line. PAMCO has received a 22-tonne sample of polymetallic nodules for use in the evaluations.

In parallel, PAMCO is studying the addition of a facility to process the intermediate alloy to nickel-copper-cobalt matte, which is an upgraded intermediate battery supply chain feedstock. It is anticipated that the additional facility would be constructed once commercial processing of polymetallic nodules to alloy has been demonstrated. The parties are working towards a binding MOU for toll-processing in 2023 with definitive agreements to follow.

Gerard Barron, CEO & Chairman of The Metals Company, said: “We are excited about the prospect of working closely with PAMCO who have been smelting nickel laterite ores at their Hachinohe facility since 1965 and have considerable experience in adapting to various land-based feedstocks from the Pacific. Technically, the Hachinohe plant appears well-suited to deploy the near-zero solid waste flowsheet we developed for processing nodules with little modification. Strategically, we are aligned with PAMCO’s goal to contribute materials to a sustainable and recycling-oriented society. We look forward to working with PAMCO on the upcoming study program, finalizing the agreements and ultimately processing nodules to provide the metals required for the energy transition. This MoU is part of our stated capital-light strategy to get into initial commercial production swiftly and with lower upfront capital by re-using existing production assets like our first production vessel and former drill ship, Hidden Gem, and existing smelting facilities onshore, as well as by leveraging the deep operational expertise of our partners Allseas and onshore processors like PAMCO. These partnerships and our relentless focus on the environmental and social impacts of any future operations is how we unlock the enormous battery metal resource held by TMC.”

Masayuki Aoyama, PAMCO President, commented: “We look forward to working with TMC to enhance the value of the Hachinohe facility by processing a higher value material with a lower environmental impact. We are excited by the prospect of being the first commercial processor of polymetallic nodules and see the opportunity to emerge as supplier of Li–ion battery metals.”

About The Metals Company
The Metals Company is an explorer of lower-impact battery metals from seafloor polymetallic nodules, on a dual mission: (1) supply metals for the clean energy transition with the least possible negative environmental and social impact and (2) accelerate the transition to a circular metal economy. The Company through its subsidiaries holds exploration and commercial rights to three polymetallic nodule contract areas in the Clarion Clipperton Zone of the Pacific Ocean regulated by the International Seabed Authority and sponsored by the governments of Nauru, Kiribati and the Kingdom of Tonga.

About Pacific Metals (PAMCO)
Since its establishment in 1949, Pacific Metals Co., Ltd. (PAMCO) has performed through Japan’s post-war reconstruction and many crises to develop new technologies, launch new products, and implement an effective quality control program with a view to satisfying the needs of the customer and becomes Japanese leading ferronickel producer. With ferronickel as its main product, PAMCO produces nickel slag products obtained as by-products in the smelting process.

Forward Looking Statements

Certain statements made in this press release are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. The forward-looking statements contained in this press release include, without limitation, statements regarding the studies to evaluate the processing of polymetallic nodules and the processing of a 22-tonne sample of nodules and feasibility of adding a new processing facility to convert nickel-copper-cobalt alloy into an upgraded matte product. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from those discussed in the forward-looking statements. Most of these factors are outside TMC’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: Regulatory uncertainties and the impact of government regulation and political instability on TMC’s resource activities; changes to any of the laws, rules, regulations or policies to which TMC is subject; the impact of extensive and costly environmental requirements on TMC’s operations; environmental liabilities; the impact of polymetallic nodule collection on biodiversity in the CCZ and recovery rates of impacted ecosystems; TMC’s ability to develop minerals in sufficient grade or quantities to justify commercial operations; the lack of development of seafloor polymetallic nodule deposit; uncertainty in the estimates for mineral resource calculations from certain contract areas and for the grade and quality of polymetallic nodule deposits; risks associated with natural hazards; uncertainty with respect to the specialized treatment and processing of polymetallic nodules that TMC may recover; risks associated with collection, development and processing polymetallic nodules; risks associated with TMC’s limited operating history; the impact of the COVID-19 pandemic; risks associated with TMC’s intellectual property and the validity, use and ownership of any new technology or intellectual property subsisting therein; TMC’s ability to raise additional funds; and other risks and uncertainties indicated from time to time in the Company’s Form 10-K, dated and filed with the U.S. Securities and Exchange Commission (SEC) on March 25, 2022 as well as the Company’s Form 10-Q filed with the SEC on November 14, 2022, including those under “Risk Factors” therein, and in TMC’s other future filings with the SEC. TMC cautions that the foregoing list of factors is not exclusive. TMC cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. TMC does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based except as required by law.

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