Evaluating Metal Stocks: The Metals Company's Deep-Sea Mining Gamble Below $10

If you’re exploring opportunities in metal stocks, The Metals Company (NASDAQ: TMC) presents a fascinating but risky proposition. Unlike traditional miners who dig underground, this company pursues an unconventional path—harvesting potato-sized polymetallic nodules from the Pacific Ocean seabed to extract battery-grade nickel, copper, cobalt, and manganese. The theory is compelling: ocean harvesting could be more economically efficient and environmentally friendly than land-based mining. But as this metal stock currently trades below $10, investors should carefully weigh what needs to go right for TMC to succeed.

An Unconventional Play in Battery Metal Stocks

The Metals Company operates in an entirely unproven market. No mining company has yet obtained a commercial license for deep-sea operations, making TMC a pure speculative play in the metal stocks sector. The company is currently pre-revenue, burning through cash while awaiting regulatory approval to scale its operations. However, TMC management recently provided more visibility on timing, projecting late 2027 as a potential launch window for commercial operations. This timeline is why the stock has attracted attention from aggressive investors willing to bet on long-term growth potential in metal stocks.

The appeal is clear: polymetallic nodules contain the exact materials needed for battery production, and global demand for these metals continues climbing as electric vehicle adoption accelerates worldwide. For investors bullish on the energy transition, metal stocks like TMC represent a leveraged play on battery metal supply chains.

The Three Critical Hurdles for This Metal Stock

However, significant obstacles stand between TMC and profitability. The first is financial: the company reported approximately $165 million in total liquidity at the end of the third quarter. With ongoing cash burn from operations and exploration activities, this capital cushion will deplete before reaching revenue generation. TMC will need to secure additional funding to survive until commercial operations begin—a task that becomes harder if market conditions deteriorate or investor confidence wavers.

The second hurdle is regulatory. The International Seabed Authority (ISA) is responsible for creating the rulebook governing deep-sea mining, but consensus remains elusive. Countries and environmental groups debate whether commercial mining should proceed at all, let alone which company should go first. While TMC is exploring a U.S. permitting alternative, it’s unclear whether that path will withstand international legal challenges. This regulatory uncertainty makes TMC one of the riskiest metal stocks to own today.

The third obstacle is technical. TMC’s extraction technology has never been tested at scale. Engineering challenges, equipment failures, or environmental complications could derail operations even if regulatory approval materializes. Deep-sea mining operates in an extreme environment—crushing pressures, darkness, and fragile ecosystems—where real-world performance may diverge sharply from laboratory results.

The Reality Check on Regulatory and Technical Risks

What makes this metal stock genuinely speculative is the convergence of all three risks simultaneously. The company cannot launch operations without capital, regulatory approval, and proven technology. If any single element fails, the investment thesis collapses. The current sub-$10 price reflects this reality—the market is pricing in substantial failure probability.

It’s worth emphasizing that deep-sea mining remains largely unknown. Environmental impacts, extraction efficiency, and commercial viability are all open questions. The media hype around metal stocks doesn’t change these fundamental unknowns.

Who Should Consider Adding This Metal Stock?

Given these complexities, TMC is appropriate only for aggressive investors with multi-year time horizons and high risk tolerance. These investors understand they could lose their entire stake if regulatory approval stalls or technical problems emerge. For them, the potential upside—a company controlling a major new source of critical battery metals—justifies the risk.

More conservative investors seeking exposure to the metal sector should consider battery metal exchange-traded funds instead. These diversified vehicles spread risk across multiple companies and projects, reducing dependence on any single technology or regulator’s decision. This approach offers exposure to the secular growth trend in battery metals without betting the farm on an unproven operation.

The Bottom Line

Metal stocks focused on novel extraction technologies like TMC present a classic asymmetric bet: limited downside (stock is already cheap) paired with potentially massive upside if all pieces align. The company’s late-2027 target provides a concrete timeline for investors to monitor progress on regulatory approval and technical demonstrations.

However, the odds remain weighted toward disappointment. Regulatory approval is uncertain, funding may prove difficult to secure, and technology risks are real. Before adding this metal stock to your portfolio, ensure you can afford to lose your investment without affecting your long-term financial plans. For the right investor with appropriate risk appetite, TMC offers a compelling speculative opportunity in the emerging deep-sea mining sector—but make no mistake: this is speculation, not investing.