Is TMC the Metals Company a High-Risk, High-Reward Buy Amid a Resurging U.S. Critical Minerals Push?

The U.S. critical minerals strategy has entered a new phase, driven by geopolitical urgency and the accelerating demand for AI infrastructure. At the center of this shift is The Metals Company (TMC), a deep-sea mining pioneer whose fortunes are inextricably tied to the Biden administration's (and now Trump's) efforts to secure supply chains for nickel, cobalt, copper, and manganese-metals critical to batteries, semiconductors, and AI systems. But with TMC's stock surging 160% in three months while grappling with $184.5 million in quarterly losses, the question remains: Is this a speculative bet worth taking, or a high-stakes gamble on an unproven industry?

Strategic Tailwinds: U.S. Policy and Geopolitical Momentum

The U.S. government's aggressive pivot toward critical minerals has created a tailwind for TMC. President Trump's executive order explicitly prioritizes deep-sea mining as a counterweight to China's dominance in rare earth elements and battery materials. This aligns with the One Big Beautiful Bill Act (OBBBA), which allocates $5 billion for industrial base funding and streamlines permitting for domestic mining projects. For TMC, which operates in U.S. waters and has secured full compliance with NOAA's regulatory framework, these policies reduce bureaucratic friction and open access to federal financing tools like the Defense Production Act.

The geopolitical angle is equally compelling. The U.S. has formed alliances with Japan, South Korea, and Australia to diversify supply chains, while TMC's collaboration with Japan on rare earth element extraction from seabed nodules positions it as a linchpin in this network. With China controlling over 60% of global rare earth processing capacity, the U.S. push to "onshore" critical mineral production-backed by tariffs on copper and metallurgical coal-creates a near-term tailwind for companies like TMC that can supply raw materials for AI and energy infrastructure.

TMC's Operational Progress: A Mixed Bag

TMC's recent milestones suggest it is moving closer to commercial viability. The company has successfully produced battery-grade manganese sulfate from polymetallic nodules, a breakthrough that could reduce U.S. reliance on imported manganese. Its NORI-D Project, with a projected $23.6 billion net present value, underscores the economic potential of deep-sea mining. However, operational challenges persist. TMC's $115.6 million cash reserves are dwarfed by its $184.5 million quarterly net loss, driven by non-cash expenses and share-based compensation. While the company has avoided public market dilution for now, its path to profitability hinges on scaling processing infrastructure-a sector where the U.S. currently lacks domestic capacity according to analysis.

Regulatory progress offers hope. NOAA's draft rule to streamline seabed mining permits and the updated U.S. Critical Minerals List (now including copper according to company updates) signal growing federal support. Yet environmental opposition remains a wildcard. Greenpeace and other groups have criticized deep-sea mining as ecologically destructive, a risk that could delay permits or trigger litigation.

Market Volatility and Investor Sentiment: A Rollercoaster Ride

TMC's stock has mirrored the volatility of its industry. A 34.6% surge in late 2025 followed news of U.S. government talks, while a 17.74% jump to $7.40 occurred ahead of a global critical minerals summit according to VectorVest analysis. Analysts have split on price targets, with a median of $9.25 according to CSIS analysis, reflecting uncertainty about regulatory outcomes and technical hurdles. The company's CFO has even warned short sellers, hinting at a potential short squeeze, though VectorVest notes TMC has "very poor upside potential" despite recent gains.

Investor enthusiasm is fueled by TMC's alignment with U.S. strategic goals. The company's partnerships with Kingston Process Metallurgy and Allseas according to company updates, along with its equity stake in Japan's Minamitori Island project according to company updates, highlight its global reach. Yet the risks are stark: TMC's business model depends on achieving commercial production by Q4 2027 according to company updates, a timeline contingent on regulatory approvals and capital availability.

The Bottom Line: High-Risk, High-Reward

TMC embodies the paradox of deep-sea mining: a sector with immense strategic value but fraught with operational, environmental, and financial risks. For investors, the key question is whether the U.S. government's push for critical mineral self-sufficiency will outweigh these challenges.

On the upside, TMC's role in supplying AI-critical minerals and its alignment with U.S. industrial policy make it a compelling long-term play. The company's technical progress and regulatory momentum suggest it could become a cornerstone of the domestic supply chain.

On the downside, TMC's financials remain precarious, and environmental opposition could derail projects. The lack of proven processing infrastructure in the U.S. also means TMC's success depends on international partnerships or federal subsidies-a scenario that introduces geopolitical and policy risks.

For those with a high-risk tolerance and a multi-year horizon, TMC offers a unique opportunity to capitalize on the U.S. critical minerals boom. But for conservative investors, the company's speculative nature and uncertain regulatory environment may justify caution.