TMC Stock Heads Under $5 After Biggest Weekly Decline on Deep Sea Mining Uncertainty
Renewed optimism around U.S. deep-sea mining regulation has pulled The Metals Company back into focus, but sharp reversals show just how...
Quick overview
- The Metals Company (TMC) has regained investor interest due to renewed optimism around U.S. deep-sea mining regulations, particularly following engagement with NOAA.
- Despite a recent rally, TMC shares experienced significant volatility, highlighting the fragility of investor confidence amid ongoing regulatory uncertainties.
- Recent developments in rival funding for land-based mineral initiatives have shifted investor focus away from TMC, raising concerns about its ability to secure comparable support.
- While NOAA's updated rules for deep-sea mining permit applications offer a streamlined process, the lack of precedent for approvals keeps the outlook uncertain.
Renewed optimism around U.S. deep-sea mining regulation has pulled The Metals Company back into focus, but sharp reversals show just how unstable that optimism remains.
TMC Re-Enters the Spotlight—But Stability Remains Elusive
The Metals Company has once again found itself at the center of investor attention, driven by renewed optimism surrounding U.S. regulatory pathways for deep-sea mining. Engagement with the National Oceanic and Atmospheric Administration (NOAA) has revived hopes that long-stalled permitting progress could finally move forward.
Yet the market’s response has been anything but steady. After a powerful rally earlier this month, TMC shares reversed sharply, falling roughly 10% in a single session and posting their worst weekly decline on record, down more than 30%. The violent swings underscore a familiar theme: while regulatory headlines can spark enthusiasm, confidence in the long-term outlook remains fragile.
From Capitulation to Sharp Recovery—and Back Again
The backdrop to the latest volatility stretches back to late 2025. TMC spent much of the second half of the year under sustained selling pressure, reflecting frustration over delays, political resistance, and unresolved environmental debates. By November, shares had slid below $5, marking what many viewed as a capitulation phase.
That low proved to be a turning point. From depressed levels, the stock staged a swift rebound, with buyers stepping in aggressively as sentiment began to shift. The recovery accelerated into early 2026, culminating in a surge of nearly 50% in just a few sessions last week.
At its peak, TMC briefly traded above $10, a dramatic reversal from its November lows. However, the rally quickly lost momentum. Buyers failed to defend higher levels, and the stock rolled over, erasing much of the advance in a matter of days.
Rival Funding Developments Shift Investor Focus
Part of the abrupt reversal appears tied to developments elsewhere in the critical minerals sector. Reports that the U.S. government is preparing to invest $2.6 billion into USA Rare Earth have redirected attention toward land-based, domestic supply chain initiatives.
For TMC, this matters. Deep-sea mining competes directly with onshore alternatives for political support, funding, and strategic priority. While seabed resources offer scale and theoretical cost advantages, they also come with higher environmental and legal uncertainty.
The prospect of significant federal capital flowing to a rival has reinforced investor concerns that TMC may struggle to secure comparable backing, particularly in the near term.
NOAA Rule Changes Spark Renewed Regulatory Optimism
The catalyst behind the recent rally came from Washington. NOAA finalized updates to its rules under the Deep Seabed Hard Mineral Resources Act, with the revised framework taking effect on January 21, 2026.
Under the new rules, companies can submit a single, consolidated application covering both exploration licenses and commercial recovery permits. Crucially, data collected during exploration—covering environmental, geological, and engineering factors—can now be carried forward into commercial applications.
This streamlined process reduces duplication and could shorten regulatory timelines. TMC USA has welcomed the changes and signaled its intention to file a consolidated application, framing the update as a meaningful step toward eventual commercialization.
Progress, But Not a Green Light
Despite the optimism, the NOAA process remains untested. The agency has never approved a commercial deep-seabed mining permit, making the current review process unprecedented.
NOAA has opened a public comment period for two exploration license applications submitted by TMC USA, with feedback due by February 23. It will also host virtual public hearings later this month. These steps represent procedural progress, but they offer no guarantees—either on approval or on timing.
For investors, this distinction is critical. Regulatory clarity may be improving, but the path forward remains long, politically sensitive, and vulnerable to delays.
Critical Minerals Narrative Returns to Policy Debate
Beyond regulation, TMC has benefited from a broader revival of the critical minerals narrative in U.S. policy discussions. Concerns over supply security for nickel, cobalt, manganese, and copper—key inputs for batteries, electric vehicles, and renewable infrastructure—have resurfaced.
Although some Chinese export restrictions have eased, Washington continues to view reliance on China-dominated processing chains as a strategic risk. That perspective has renewed interest in unconventional supply sources, including deep-sea polymetallic nodules.
Historically, even modest policy signals around supply security have triggered outsized reactions in TMC’s stock, and the latest move follows that pattern.
A U.S.-Focused Strategy Raises Both Opportunity and Risk
Central to TMC’s strategy is its decision to pursue permits under U.S. law rather than wait for the United Nations–backed International Seabed Authority (ISA) to finalize its long-delayed mining code.
Supporters argue this approach could provide faster clarity and reduce reliance on stalled international negotiations. Critics, however, warn that unilateral action carries significant legal and diplomatic risk.
Environmental groups continue to oppose deep-sea mining, citing limited understanding of deep-ocean ecosystems. Several countries have called for moratoriums until further research is completed, raising the risk of international pushback.
Political and Legal Uncertainty Remains a Major Overhang
A recent Congressional Research Service report highlighted the risks, noting that NOAA has no precedent for approving commercial seabed mining. It also warned that unilateral U.S. action could invite domestic lawsuits and international disputes.
Even if NOAA ultimately grants approvals, that decision would likely mark the beginning—not the end—of a lengthy legal and regulatory process. For long-term investors, this complicates both valuation and timeline assumptions.
Short Interest Amplifies Price Swings
TMC’s volatility has been magnified by elevated short interest, with roughly 14% of the free float sold short. This positioning creates conditions for sharp short squeezes when positive headlines emerge, as seen during last week’s rally.
Comments from company executives suggesting improved regulatory visibility have already triggered abrupt spikes, particularly in after-hours trading. However, these moves have tended to fade once speculative momentum subsides.
Technical Picture: Recovery Attempt, Then Breakdown
From a technical perspective, the recent rebound repaired some of the damage from last year’s selloff. Shares found support near the 50-week moving average in November, which helped ignite the rally that briefly carried the stock above $10.
TMC Chart Weekly – Resuming the Larger Uptrend
That progress has now been reversed. The latest drop back below $7 highlights unresolved fragility and reopens the door to a retest of November’s lows below $5. Without fresh regulatory or political catalysts, the stock risks slipping back into a volatile, range-bound pattern.
Conclusion: Renewed Hope, Familiar Uncertainty
The Metals Company has once again captured market attention, driven by regulatory developments and a revived critical minerals narrative. But the sharp reversal in shares serves as a reminder that optimism remains fragile.
Until there is clear regulatory precedent or tangible political backing, TMC is likely to remain a highly event-driven stock—capable of powerful rallies, yet equally prone to abrupt pullbacks when expectations run ahead of certainty.
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