- TMC, The Metals Company, is up 40% this morning
- They're into deep sea mining of those manganese nodules
- The big question is whether mining licences will ever be granted
TMC (NASDAQ: TMC) stock, or, “TMC The Metals Company” as it likes to call itself, is up 35 to 40% this morning in premarket trade. There's no obvious piece of news about this or to explain this. No corporate release. It's also clearly not anything to do with a difference in operational results as TMC is still years away from producing anything at all. The likely and useful assumption is that there's been a change in attitude concerning critical materials. Or, rather, investors think that there will be some future change in attitudes there.
TMC is an interesting company, there's no doubt about that. What they desire to do is, in one sense, entirely obvious and sensible. Great portions of it will be eminently achievable too. The problems are twofold – one is just the one part of their technology. The other is whether – even if they can get it to work economically – whether they'll be allowed to deploy it.
The big game is those manganese nodules on the deep sea bed. They contain not just manganese but nickel, cobalt and copper. If they could be got up off that deep sea bed then they'd be easy enough to process for those metals – indeed, TMC has an arrangement with Glencore already if it can collect them. They have access to a licence to allow them to collect them in one specific area. They've got what they claim is a technique to be able to collect them. So, what's the problem then?
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There are two problems with what TMC is trying to do. One is the sheer energy cost of bringing up the nodules from 5,000 feet down. There are claims this has been solved but we'd all like to see it. The other is that there are always those environmentalists. We're seeing significant blowback – those deep sea environments are very special and should not be mined at all. That would, of course, create something of a problem for those who would mine the deep seabeds.
That's a political matter and how the politics works will, in the end, be a major determinant of how TMC does. If any ban goes ahead then the idea is killed off. If full production licences are granted then it becomes a technical matter whether it will work or not.
This is then going out on something of a limb but the more people talk of two things – the climate crisis and supplies of critical minerals – then the more likely the full licences are to be granted. The UK govt (which controls some of those deep sea bed licences) has just produced a critical minerals pathway which mentions this problem. The US govt is similarly pushing for there to be more critical minerals supplies. It might well be the ebb and flow of this argument that is pushing the TMC stock price around.
If that's so then trading positions in The Metals Company will need to be guided by estimations of political movements on the granting, or not, of those full deep sea bed exploitation licences.