Is TMC The Metals Company a Smart Speculative Bet on Critical Minerals?

Over the past year, rising geopolitical trade tensions have thrust critical minerals and rare-earth elements into the spotlight. These minerals power advanced technologies like electric vehicles, wind turbines, semiconductors, and modern defense systems, making them critical to national security and energy independence.

One company seeking to establish itself as a provider of these precious minerals is TMC The Metals Company (NASDAQ: TMC). This company aims to address the growing demand for domestically sourced critical minerals by developing a new metal supply from polymetallic nodules on the deep-sea floor. The stock surged as much as 1,576% from its low last year, as investors piled into rare-earth companies.

While the stock has been volatile and story-driven, it has a long-term opportunity to address the growing needs for these critical minerals. But before you plow money into the stock, there are some things you should know first.

Deep-sea mining could be the next frontier

TMC aims to address the demand for critical minerals through deep-sea mineral exploration. The company's ultimate goal is to collect, process, and refine polymetallic nodules, which are rocks on the seafloor with high concentrations of nickel, copper, cobalt, and manganese. The company is targeting the seafloor in the international waters of the Clarion-Clipperton Zone, roughly 1,500 miles from San Diego.

Mining seabed minerals could be a significant industry and an opportunity to build domestic critical mineral reserves. When CEO Gerard Barron testified before the U.S. House Committee on Natural Resources in April 2025, he said these nodules contain more critical minerals than land-based reserves combined.

TMC has hurdles to overcome before getting started

While the opportunity for seabed mining is huge, so is the risk. There are several regulatory hurdles that TMC must overcome before it can begin mining the ocean seafloor.

In April, U.S. President Donald Trump signed an executive order, "Unleashing America's Offshore Critical Minerals and Resources," that underscores the administration's commitment to building a robust domestic supply of critical minerals. This order directs the Department of Commerce to implement an expedited permitting process under the Deep Seabed Hard Mineral Resources Act (DSHMRA).

Image source: Getty Images.

TMC is working with DSHMRA and the National Oceanic and Atmospheric Administration (NOAA) to submit applications for commercial recovery and exploration. NOAA confirmed its most recent exploration license applications were compliant and that TMC has a priority right over both exploration areas. Next, exploration applications must undergo an interagency review with other U.S. government departments.

Following certification, an Environmental Impact Statement is expected to be prepared under the National Environmental Policy Act (NEPA), and a public comment period will be provided. NOAA will then determine whether to issue the requested licenses and permits.

However, even if approved through all of the channels noted above, international legal risks remain. That's because the International Seabed Authority has not finalized exploitation regulations, and there is debate and concern over whether the U.S. can issue mining permits in international waters.

Then there is capital risk. TMC continues to operate in the red, posting an operating loss of $95.3 million in the first three quarters of last year. The company does have $165 million in cash and available credit, but there is a high likelihood that it will need additional financing over time to expand and fund operations. This could lead to debt or equity issuance, diluting shareholders' existing stakes.

TMC Revenue (TTM) data by YCharts

TMC is a high-risk stock at this stage

The Metals Company is currently in a high-risk phase of its business. The company has a strong foundation of technical expertise in deep-sea mining and favorable political tailwinds that could help it secure the first-ever deep-sea mining permit. But the company is early-stage, not generating revenue, and will likely experience significant short-term price swings, which isn't ideal for long-term investors.

While the stock has the potential to address the U.S. shortage of critical minerals, it remains highly speculative. If you decide to invest for its upside potential, keep the position small and ensure it's part of a well-diversified portfolio.

Courtney Carlsen has positions in TMC The Metals Company. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.