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Deep-Sea Nodule Collection: Why Some Investors Are Missing the Boat (Guest Post by Craig Shesky)

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Guest post: Craig Shesky is the Chief Financial Officer of The Metals Company, a leader in exploring and responsibly developing critical minerals from seafloor polymetallic nodules.

In my career as a hedge fund investor, I learned that the most lucrative investments were often the ones that were easiest to dismiss upfront.

One of the goals of making investment recommendations is to maximize the fund’s risk-adjusted returns. But let’s be honest: another goal is ensuring you have plausible excuses for your bosses and peers if a great opportunity is missed. “Yes, I saw the potential, but here’s why I didn’t take the leap…”

When it comes to deep-sea nodule collection, many investors are quick to fall into the same traps. I know because I did too, back when I first began analyzing this industry on the buyside. The objections are well worn:

  • “The technology seems unproven.”
  • “It’s probably very capital intensive.”
  • “It must be higher on the cost curve than traditional mining.”
  • “What about the environmental impacts?”
  • “The regulatory and political risks seem too high.”

Of course, many of these objections were also leveled over 50 years ago at the new offshore oil and gas industry, and many proved to be unfounded. In fact, many of the same players who pioneered that industry are now using that experience to pursue deep sea mining.

This disconnect between myth and reality is creating a generational opportunity for investors willing to look closer, with potential near term catalysts through executive and legislative support from President Trump and Congress, who are looking to usher in a new era of mineral independence for the United States.

Proven Technology, Proven Resource

The Metals Company (Nasdaq: TMC) leads the world in developing polymetallic nodules—seafloor rocks rich in nickel, cobalt, copper, and manganese.  We’ve published SEC S-K 1300 and Canadian N.I. 43-101 resource statements on two of our contract areas, which were ranked as the #1 and #2 largest undeveloped nickel projects by Mining.com for the last two years in a row. 

These nodules lie unattached on the seafloor in the Pacific Ocean’s Clarion Clipperton Zone (CCZ). Unlike traditional mining, there’s no drilling, blasting, or digging involved; the nodules are simply collected and pumped to the surface.

This isn’t theoretical. Over $500 million has already been invested in our project, with TMC and our partners achieving major milestones. In 2022, TMC and our partner Allseas completed the first integrated large-scale test mining campaign since the 1970s. More than 3,000 tonnes of nodules were collected and lifted from depths of 4 kilometers, validating the efficiency of our collection technology. This achievement wasn’t just a technical breakthrough—it also provided the critical environmental data regulators and stakeholders needed.

Onshore, our partner Pacific Metals Company (PAMCO) successfully processed nodules into over 500 tonnes of calcine and is converting this into high-grade nickel-copper-cobalt products and manganese silicate. This was achieved using proven rotary kiln electric arc furnace (RKEF) technology, meaning we’re leveraging existing infrastructure and keeping capital costs low.

High Grades + Multiple Metals = Economic Viability

The economics of our NORI-D Project are compelling even at current nickel prices, as will be detailed this quarter in the release of our pre-feasibility study (PFS). Most land-based nickel projects in North America and Australia struggle with low ore grades, rising costs, and lengthy timelines. In contrast, our nodules contain high grades of nickel (1.4%), cobalt (0.13%), copper (1.1%), and manganese (31%). This polymetallic resource means lower operating and capital costs per tonne, offering life-of-project profitability even at nickel prices below $10,000 per tonne. This makes intuitive sense: we don’t have to build new ships or new processing facilities, so we can truly be a capital-light operation.

Indonesia dominates the nickel market, but its high-grade laterite deposits are expected to deplete within five years. As these new RKEF processing lines seek alternative feedstocks, polymetallic nodules offer a scalable, long-term solution. Beyond nickel, over half our future revenue is expected to come from valuable byproducts like copper, manganese, and cobalt.

Environmental Progress: 12 Years, 22 Campaigns, and No Showstoppers

Since 2012, over $200 million has been invested in environmental research for the NORI-D Project. This includes 22 offshore campaigns and the most extensive environmental baseline ever conducted in the deep sea. All critical questions—originally raised by NOAA to Congress in 1995—have been addressed, with sediment plume dispersion being definitively answered by independent studies from MIT and other leading institutions.

A Life Cycle Assessment by Benchmark (LCA) confirms that collecting nodules has far lower environmental and social impacts compared to land-based mining. It avoids deforestation, carbon sink destruction, and community displacement—issues that have plagued terrestrial mining for decades. Our near-zero solid waste, zero-toxic waste flowsheet eliminates tailings by design, setting a new standard for responsible resource development.

Regulatory Paths Forward

The International Seabed Authority (ISA) is aiming to finalize its Mining Code in 2025, establishing a clear regulatory framework for deep-sea mining. In the meantime, TMC has contingency plans in place to ensure continued progress.

For U.S.-focused investors, this is where the opportunity becomes even more compelling. The United States hasn’t ratified the United Nations Convention on the Law of the Sea (UNCLOS), but it was American companies that pioneered this industry in the 1970s. New legislative initiatives like the RUSRA Act and the 2025 NDAA signal growing U.S. interest in reclaiming leadership in this space.

Overcoming Opposition and Hidden Agendas

Unsurprisingly, there’s opposition to this industry, led by well-funded NGOs and certain countries with vested interests in land-based mining. Chile, the world’s largest copper producer, and France, which continues to bankroll loss-making nickel operations in New Caledonia, have been vocal critics. But their motives are transparent: protecting domestic industries. 

As France and Chile have found out time and again when proposing various obstructionist measures at the International Seabed Authority, they have neither the power nor the support to stop this industry. Rather, some of the world’s most populous countries and most credible industrial economies are the ones pushing forward with deep sea resource activities in international or territorial waters: China, India, Japan, South Korea, Russia, Sweden, Norway…and now, at long last, the United States.

A New Era of Metal Independence

As China and NGOs debate against each other at the ISA, the U.S. appears ready to reassert its rights in an industry it helped create. Key cabinet appointments in State, Commerce, the UN Ambassadorship and the National Security Council are already on the record as supporters of deep sea mining, alongside dozens of Congresspeople. And we’re seeing an administration that is much more concerned with protecting its own interests than bowing to the global order.

The Pacific Council’s Duncan Wood captured it well when he told the Wall Street Journal, “If the U.S. is to get involved in deep sea mining, the political stars are more aligned than ever.”

It is imperative that the U.S. does not trade hard-won energy independence for metal dependence. At long last, the U.S. seems ready to do what it did over 50 years ago: dive in head first. 

It’s time for investors to do the same.

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