The Metals Company Is Riding the Critical Metals Boom. Here's Why I Still Wouldn't Touch It.
Key PointsThe Metals Company holds an interest in a vast part of the Pacific seabed that could hold 1.6 billion tonnes of polymetallic nodules.
The Metals Company (NASDAQ: TMC) has identified vast reserves of critical metals in the Clarion Clipperton Zone, an area of the Pacific Ocean off the U.S. West Coast. These critical metals, including nickel, copper, cobalt, and manganese, are essential for electric vehicle batteries, renewable energy, and other applications. The company has an estimated net present value of $23.6 billion for its resources.
However, TMC faces significant regulatory and execution challenges as it seeks approval from the U.S. National Oceanic and Atmospheric Administration (NOAA) to extract these resources, bypassing the international approval framework established by the United Nations. The company is also in need of substantial funding to develop its offshore collection system and build processing and refining capacity in the U.S. While TMC could play a crucial role in meeting future demand for critical metals, its regulatory approach and financial situation make it a high-risk investment.
The article suggests waiting to see how these risks develop before considering a potential investment, and instead recommends looking at more established metal stocks in the meantime.
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