Deep-Sea Mining Prospects Fuel The Metals Company Stock Gains

The Metals Company Stock Advances Amid Regulatory Speculation

The Metals Company (TMC), a prospective deep-sea mining firm, saw its stock price climb by 18.8% in September, extending its year-to-date gains to over 560% in 2025. This latest advance follows a robust first half of 2025, where shares had already surged by 489.3%.

Driving Factors and Market Reaction

The September surge in TMC stock was primarily fueled by renewed speculation concerning the regulatory landscape for deep-sea mining. Investors reacted to news that India had signed a 15-year agreement with the International Seabed Authority (ISA) for the exploration of polymetallic sulphides in the Indian Ocean. This development is perceived by some market participants as a strong indicator that the ISA may soon finalize its long-awaited deep-sea mining rules, thereby reducing regulatory uncertainty that has historically impacted the sector.

Prior to September, TMC shares had experienced significant upward momentum throughout 2025. This earlier appreciation was partly attributed to executive orders from the Trump administration aimed at advancing U.S. leadership in seabed mineral development. Notably, an executive order asserting the nation's policy to "advance United States leadership in seabed mineral development" led to a 45% increase in TMC's stock on the day of its issuance. Further investor interest was generated by an article in The Wall Street Journal and a bullish analyst price target of $5.50, up from a previous close of $4.45. Strategic investments also contributed, including an $85.2 million equity investment by Korea Zinc for 19.6 million common shares and a $37 million direct offering in May, led by Michael Hess.

Broader Context and Risk Assessment

While the market has responded positively to potential regulatory clarity and strategic backing, TMC remains a highly speculative investment. The company is currently pre-revenue, operating in an industry with unproven commercial profitability. Its business model centers on collecting polymetallic nodules containing critical minerals such as cobalt, copper, manganese, and nickel, essential for the green energy transition.

Significant environmental concerns persist, with scientists and environmental groups warning of irreversible damage to marine ecosystems from deep-sea mining operations. Reports indicate that processes like the release of sediment plumes could harm marine life, with some experiments showing substantial reductions in fish and shrimp populations. This has led to strong opposition, with 38 governments and 55 major companies, including BMW, Google, and Patagonia, advocating for a moratorium on deep-sea mining.

The regulatory environment, though seemingly improving, also presents complexities. The ISA's comprehensive mining code remains unfinished as of July 2025, with key sticking points including royalty distribution, environmental impact assessment requirements, and liability provisions. The U.S. government's efforts to fast-track seabed mining permits could create a parallel regulatory system, potentially leading to legal challenges and geopolitical tensions. TMC itself holds existing ISA exploration contracts, one of which is due for renewal in 2026, positioning the company at the nexus of national and international regulatory frameworks.

Financially, TMC reported a net loss of $74.3 million in Q2 2025, with a quarterly cash burn of $20.6 million. Although the company held $115.8 million in cash as of June 30, 2025, providing an operational runway into 2027, its pre-revenue status and ongoing losses indicate a need for additional funding before commercial production, which carries dilution risk for existing shareholders. The economic viability is further complicated by the high capital costs of deep-sea mining and the volatility of commodity prices; for instance, lithium prices have dropped over 80% since 2023, and nickel, cobalt, and graphite have lost half their value.

Looking Ahead

TMC aims to commence commercial deep-sea mining in Q4 2027, contingent on securing the necessary permits. The ongoing developments at the ISA and the interplay between national and international regulatory efforts will be critical to this timeline. Investors will closely monitor further progress on the ISA mining code, any additional government support for critical mineral extraction, and the company's ability to secure long-term funding without substantial shareholder dilution. The long-term profitability of deep-sea mining remains a central question, balancing the global demand for critical minerals against significant environmental and operational challenges. TMC's journey represents a key test case for the future of deep-sea resource extraction and its governance globally.