The explosion in artificial intelligence computing power demand and the global proliferation of electric vehicles are driving sharp growth in demand for key metals such as nickel, copper, cobalt, and manganese. However, traditional mining faces challenges including declining ore grades, enormous capital requirements, and lengthy permitting processes. Against this backdrop, a company called The Metals Company (TMC) has proposed a nontraditional path—collecting metal nodules from the Pacific seabed—and this concept is drawing keen attention from investors.
The Metals Company plans to collect polymetallic nodules in the Clarion-Clipperton Zone between Hawaii and Mexico. These potato-sized nodules formed naturally over millions of years and lie loosely scattered on the seabed, rich in four commercially valuable metals: nickel, copper, cobalt, and manganese. The company’s business model resembles that of traditional miners: acquire exploration and production rights, use specialized collector vehicles to gather nodules from the seabed and transport them to surface production vessels, then ship them to processing facilities for refining into final products for sale. The only difference from conventional mining lies in the source of raw materials.
According to estimates, global electric vehicle ownership will exceed 1 billion in the coming years, requiring 56 million tons of nickel, 7 million tons of manganese, 7 million tons of cobalt, and 85 million tons of copper. In comparison, 2019 global production stood at 2.3 million tons of nickel (only half suitable for batteries), 18 million tons of manganese, 140,000 tons of cobalt, and 12 million tons of copper—a staggering gap. As demand for critical minerals continues to rise, finding new supply sources has become an urgent issue for the mining industry.
Supporters argue that TMC’s contract area holds one of the world’s largest undeveloped resources of battery metals. If commercial operations materialize, the company could become the world’s largest supplier of nickel and manganese. Moreover, because the nodules already lie on the seabed, no drilling or blasting is required, theoretically avoiding some costs of traditional mining, thereby offering a competitive price advantage.
However, risks are equally significant. First, commercial deep-sea mining has not yet developed into a mature global industry, and the approvals required to launch large-scale production remain uncertain. On the environmental front, scientists and conservation organizations warn that deep-sea ecosystems are still poorly understood by humans, and disturbing the seabed could have long-term impacts on marine life.
Geopolitical factors provide additional tailwinds for TMC. China is the world’s leading supplier of rare earth metals and has previously used rare earth supply as a bargaining tool, prompting the United States and other countries to actively promote diversification of critical mineral supplies. The U.S. government has pushed to revise relevant procedures to help TMC obtain permits and has cooperated with Japan to accelerate development in specific subsectors of the industry. Yet to date, the only substantive progress the company has achieved is that its permit application “has received formal certification from the U.S. National Oceanic and Atmospheric Administration”—meaning the agency has confirmed receipt of the application and that it is properly completed—far from a final construction permit.
TMC remains in a loss-making stage and has not yet obtained final approval for seabed mine construction, making its commercial prospects highly uncertain. Regulatory hurdles, environmental opposition, or technical challenges could all prevent the project from materializing. For most investors, waiting on the sidelines until the mine is operational or even profitable may be the more prudent choice. The stock is better suited for aggressive investors with high risk tolerance and an extremely long investment horizon.
