US Govt Backs Rare Earth Rival, TMC Stock Dives 20%, Clouding NOAA’s Mining Permit
The Metals Company has returned to investor radar on regulatory optimism around U.S. deep-sea mining, but sharp price swings underline how..
Quick overview
- The Metals Company (TMC) has regained investor interest due to regulatory optimism surrounding U.S. deep-sea mining permits, but this optimism is fragile.
- Recent volatility in TMC's stock price highlights the uncertainty surrounding its long-term outlook, influenced by political, legal, and environmental factors.
- The NOAA's new rules for deep-sea mining applications have sparked a temporary rally, but the agency has never approved a commercial permit, leaving the process unproven.
- TMC's strategy to pursue U.S. permits instead of waiting for international regulations carries significant risks, including potential legal challenges and environmental opposition.
The Metals Company has returned to investor radar on regulatory optimism around U.S. deep-sea mining, but sharp price swings underline how fragile that optimism remains.
TMC Re-Engages the Market—But Confidence Is Fragile
The Metals Company’s long-term outlook remains clouded by political, legal, and environmental uncertainty. Still, the stock has re-entered market conversations after renewed optimism surrounding its engagement with the U.S. National Oceanic and Atmospheric Administration (NOAA) on deep-sea mining permits. That renewed attention, however, has come alongside fresh volatility. After a powerful rally last week, TMC shares have fallen roughly 20% in the latest session, testing key technical support and reminding investors how quickly sentiment can turn.
From Capitulation to Comeback
TMC spent much of the second half of 2025 under heavy pressure. Shares slid relentlessly and fell below $5 in November, marking a capitulation phase after months of disappointment. That low proved to be an inflection point. From those depressed levels, the stock staged an aggressive rebound, gathering momentum into early 2026.
The recovery accelerated sharply last week, with TMC surging close to 50% in a matter of days. At one point, shares briefly pushed above the $10 mark, signalling a dramatic reversal from the November lows. Yet the move lacked staying power. Buyers failed to defend those gains, and the stock has since rolled over, erasing a significant portion of the advance.
Rival Funding Shifts the Spotlight
Part of the latest downside pressure appears tied to developments elsewhere in the critical minerals space. Reports that the U.S. government is preparing a $2.6 billion investment in USA Rare Earth have redirected investor enthusiasm toward domestic, land-based supply chain projects.
That shift has mattered for TMC. While deep-sea mining offers scale and theoretical cost advantages, it competes directly with onshore alternatives for political and financial backing. The prospect of federal capital flowing to a rival has reinforced concerns that TMC may struggle to attract comparable support, at least in the near term.
NOAA Rule Changes Reignite Regulatory Optimism
The catalyst behind last week’s rally came from Washington. NOAA finalised changes to its rules under the Deep Seabed Hard Mineral Resources Act, with the updated framework taking effect on January 21, 2026.
The revised rules allow companies to submit a single, consolidated application covering both exploration licences and commercial recovery permits. Importantly, data collected during the exploration phase—environmental, geological, and engineering—can now be rolled directly into commercial applications. This change reduces duplication and may shorten regulatory timelines.
TMC USA has welcomed the development and signalled its intention to file a consolidated application, framing the rule change as a meaningful step toward eventual commercial approval.
Symbolic Progress, Not a Green Light
Despite the enthusiasm, the NOAA process remains unproven. The agency has never granted a commercial deep-seabed mining permit, making the current review process unprecedented.
NOAA has opened a public comment period for two exploration licence applications submitted by TMC USA, with feedback due by February 23. It will also host two virtual public hearings later this month. While these steps mark formal progress, they offer no assurance of approval or clarity on how long the process could take.
For investors, the distinction matters. The regulatory path may now be clearer, but it is still long, politically sensitive, and vulnerable to delays.
Critical Minerals Narrative Returns
Beyond regulation, TMC has benefited from a renewed focus on critical minerals in U.S. policy discussions. Concerns about supply security for nickel, cobalt, manganese, and copper—key inputs for batteries, electric vehicles, and renewable infrastructure—have resurfaced.
Although diplomatic efforts have eased some Chinese export restrictions, Washington continues to view reliance on China-dominated processing chains as a strategic risk. That perspective has revived interest in unconventional supply sources, including deep-sea polymetallic nodules.
For TMC, this narrative is familiar. Historically, even modest policy signals around supply security have triggered outsized moves in the stock.
A U.S.-Centric Strategy Raises Stakes
Central to TMC’s approach is its decision to pursue permits under U.S. law rather than wait for the United Nations–backed International Seabed Authority (ISA) to finalise its long-delayed mining code. Supporters argue this route could deliver faster clarity and reduce reliance on stalled international negotiations.
Critics see significant risks. Environmental groups have strongly opposed deep-sea mining, warning that ocean ecosystems remain poorly understood. Several countries have called for moratoriums until further research is completed. Acting unilaterally could expose the U.S. and TMC to legal challenges and diplomatic friction.
Political and Legal Risks Loom Large
A recent Congressional Research Service report underscored the uncertainty, noting that NOAA has no precedent for approving commercial seabed mining. It also warned that unilateral U.S. action could trigger domestic lawsuits and international disputes.
Even a favourable NOAA review would likely represent only the beginning of a multi-year regulatory and legal process. For long-term investors, this significantly complicates valuation and timeline assumptions.
Short Interest Fuels Swings
Volatility has been amplified by elevated short interest, with roughly 14% of TMC’s free float sold short. This positioning creates the potential for sharp squeezes when positive headlines emerge, as seen during the recent rally.
Comments from company executives hinting at improved regulatory visibility have already triggered abrupt after-hours spikes. While these moves can be dramatic, they often fade quickly once speculative momentum subsides.
Technical Picture: Progress, Then Reversal
From a technical standpoint, the recent rebound repaired some of the damage from last year’s sell-off. The stock found support near its 200-day moving average in November, a level that finally attracted sustained buying interest.
TMC Chart Daily – Resuming the Larger Uptrend
However, the latest drop back below $8 highlights unresolved fragility. The rally linked to NOAA developments has stalled, and without fresh news, the stock risks slipping back into a range-bound, volatile pattern.
Conclusion: Hope Rekindled, Uncertainty Intact
The Metals Company has once again captured investor attention, driven by regulatory developments and a revived critical minerals narrative. Yet the sharp reversal in shares underscores a familiar reality: progress remains incremental, risks are substantial, and confidence is easily shaken.
Until there is clear regulatory precedent or tangible political backing, TMC is likely to remain a high-volatility, event-driven stock—capable of powerful rallies, but equally prone to abrupt pullbacks when optimism runs ahead of certainty.
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