TMC Metals Inc (NASDAQ: TMC ) offers a new solution to a big problem: how to get all the metals needed to make batteries for electric cars.
Battery metals, such as nickel and cobalt, usually come from land mines that destroy natural habitats and exploit workers. However, TMC wants to flip the script: instead of getting these mines from the ground, it wants to get them from polymetallic rocks in the deep ocean floor.
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Trillions of these potato-sized rocks — also called nodules — sit on the ocean floor, and TMC has the right to harvest a large portion of them. In fact, according to TMC estimates, the company may have enough nickel, cobalt, copper, and manganese to power 280 million electric vehicles.
This is the big picture. Today’s tensions include a regulatory process that the TMC has not undergone, and potential international conflict with the path it has chosen to take. However, the latest development in that regulatory process could trigger a rally soon — or at least before it reports earnings on March 26.
It’s hard to ignore the opportunity in front of TMC: it could literally be the fundamental supplier of the clean energy age, in which metals form the backbone of battery technology.
TMC’s estimates show it could have tens of billions of dollars worth of metal under its control, and the company has already demonstrated that the collection tool — using robotic vacuuming — works.
That said, the company faces two problems: first regulatory, second environmental.
The second directly affects the first: we simply do not know the extent of the damage that deep-sea mining can do to ocean ecosystems. In fact, we don’t know enough regarding to Deep sea to predict the results. Taking the nodules can disrupt the decomposition of the sea floor which can also kill or damage the microorganisms, which can then affect larger organisms, such as fish.
True, conventional land mining also causes damage, but if TMC positions itself as a supplier of clean energy materials, damaging ecosystems may be a PR nightmare.
This destructive potential is one reason the regulatory process was the way it was slowly. The International Maritime Organization (ISA), the governing body in the deep sea, does not want to finalize a rulebook for mining nodules until it is certain that ecological impacts will be minimal. It is not yet certain.
