Beyond imposing tariffs or pressuring the Federal Reserve to slash interest rates, President Donald Trump’s latest effort to strengthen America’s economy has him turning his attention toward the ocean — or rather, what’s on the bottom of it.
In a recently signed executive order, Trump directed the secretaries of Interior and Commerce, among others, to speed up U.S. efforts to explore the potential of mining the ocean floor for critical minerals. Just as shares of MP Materials (MP -1.13%) soared on the mid-April news that Trump was committed to stockpiling rare earth minerals, shares of The Metals Company (TMC -0.76%) also soared on his order regarding deep-sea mining.
But does this news necessarily mean that The Metals Company — a company dedicated to deep-sea mining operations — is a stock that investors should be powering their portfolios with right now?
Seeking self-sufficiency on the seabed
Metals like copper, manganese, cobalt, and nickel are critical in a wide variety of modern usages, from electric vehicle batteries to components of weapons systems. The problem, however, is that the United States doesn’t mine them in great enough quantities to be self-sufficient. The U.S. Geological Survey, for example, found that in 2024, the country was largely dependent on imports for 12 of the 50 minerals deemed critical. Moreover, China was a leading producer of 29 of those 50 critical minerals in 2023.
To help fortify the nation’s supply of minerals, Trump’s executive order, according to the White House, “develops domestic capabilities for exploration, characterization, collection, and processing of critical deep seabed minerals.”
Attempting to mitigate the potential for China to further threaten the U.S.’ supplies of these minerals, the executive order also asserts that it “strengthens partnerships with allies and industry to counter China’s influence in the seabed mineral resource space.”
Working offshore to shore up the nation’s critical minerals supply
While there are numerous mining companies operating on terra firma, there are far fewer focused on the bottom of the deep blue sea — save for The Metals Company, which has developed a system to collect polymetallic nodules off the seabed. Once they’re on board its ships, the nodules are cleaned and prepared for processing, which ultimately takes place back on land.
The Metals Company cites several competitive advantages that distinguish it from would-be competitors. For one, the company completed a successful pilot test in 2022 where it collected about 4,500 metric tons of nodules from the seafloor, and achieved a sustained hourly production rate of 86.4 metric tons with its prototype seafloor nodule collector. This validation of the company’s integrated nodule collection system sets it apart from its peers.
Another notable advantage is that the company retains exclusive exploration rights to areas in the Clarion Clipperton Zone — located in international waters — that have ample polymetallic nodules. The company estimates that its contract areas have enough resources in place to meet the requirements for 280 million electric vehicles.
Potentially choppy waters for The Metals Company
Regardless of Trump’s executive order, plenty of risks for The Metals Company remain. For one, the international community hasn’t yet endorsed deep-sea mining as acceptable. The company is still waiting — as it has for several years — for the International Seabed Authority (ISA), an autonomous organization established by the U.N., to approve seabed mining regulations.
Unsurprisingly, Trump’s enthusiasm for deep-sea mining has drawn pushback from China, which claims that the proposal violates international law. As such, his order could turn this into another front in his developing trade war.
Assuming that the ISA comes down favorably on allowing deep-sea mining and that its proposed regulations are able to overcome international opposition, there’s still the question of the actual business model: There’s no guarantee that the company will be able to generate a profit from such operations.
Is it critical to buy this minerals stock right now?
Trump’s executive order certainly looks like a positive for The Metals Company, but savvy investors will understand that a lone statement out of Washington, D.C., doesn’t categorically make it a great investment. There are plenty of questions remaining as to whether the company will be able to actually commence commercial operations, and, if it does, whether it can be a profitable endeavor.
For these reasons, it’s clear that only investors with extremely high thresholds for risk should consider investing in The Metals Company today.