American Tungsten Corp. (TSXV: TUNG, OTCQB: DEMRF)
Building America’s Defense Critical Metals Supply
The United States is taking active measures to reduce its heavy dependence on foreign critical minerals and rare earth elements. Research shows that China holds a near-monopoly in the rare earth sector, accounting for 70% of global mining and 90% of global processing. To address this situation, the U.S. is making significant investments to revitalize its domestic supply chain and explore seabed mining.
TMC The Metals Company (TMC) is one of the pioneers in this field. The company recently received a key regulatory approval that allows its seabed mining operations to move forward.
In May of this year, the U.S. National Oceanic and Atmospheric Administration (NOAA) officially certified TMC’s application for an exploration license for its USA B deep-sea activities. This approval covers an additional 122,000 square kilometers of seafloor exploration area, further expanding TMC’s licensed scope beyond the previously approved 65,000 square kilometers for exploration and commercial extraction under its USA A application.
This approval enables TMC to advance its exploration plans across a vast underwater area on the Pacific seabed, located between Mexico and Hawaii. According to company estimates, this region may contain over one billion tons of polymetallic nodules. These small nodules, rich in nickel, cobalt, copper, manganese, and rare earth elements, are critically important for electric vehicles, defense technologies, and other sectors.
Following the certification, NOAA will begin preparing an Environmental Impact Statement to assess the potential effects of the proposed exploration activities on deep-sea ecosystems. The statement will seek public comments and undergo rigorous review regarding sediment plumes, benthic toxicity, and biodiversity loss.
TMC’s receipt of NOAA certification is a positive step, bringing it closer to extracting critical minerals and rare earth elements from the seabed. However, the project still faces substantial opposition from environmental organizations, which fear that deep-sea mining could cause permanent damage to marine biodiversity.
Furthermore, the very approach of using NOAA to authorize deep-sea mining faces scrutiny. Historically, operations in international waters fall under the jurisdiction of the United Nations-backed International Seabed Authority, which has been slow to approve deep-sea mining, prompting the U.S. to pursue an alternative path.
TMC remains in a very early stage, as a company with no revenue yet. NOAA’s regulatory approval is a step in the right direction, but the company still faces multiple hurdles before actual seabed mining can begin.
TMC is attempting to break new ground – not by digging deep underground, but by descending to the Pacific seabed to collect nodules rich in critical metals like cobalt, copper, nickel, and manganese. However, deep-sea mining still involves many unknowns: long-term ecological impacts are unclear; one recent study found that mining equipment led to a 37% decline in deep-sea animal populations and a 32% decline in species diversity. Commercial profitability is also unknown. While the company has highlighted an estimated $24 billion in nodule value, the costs of commercial-scale collection and processing remain uncertain. These uncertainties are already reflected in TMC’s stock price, which is below $7. The company has a market capitalization of approximately $2.6 billion, which appears high for a mining company with no revenue and without full regulatory approval. Given the commercial risks and potential difficulties associated with deep-sea mining, most investors would be best advised to remain on the sidelines until the regulatory path becomes clearer. Only aggressive investors might consider getting involved at this stage.
