NOAA Streamlines Deep-Sea Mining Permits, but TMC's Financial and Regulatory Overhangs Persist

What happened

The National Oceanic and Atmospheric Administration (NOAA) issued a final rule modernizing the permit process for deep-seabed mining under the Deep Seabed Hard Mineral Resources Act, aiming to consolidate applications and reduce regulatory duplication. TMC welcomed this development, announcing its intent to submit a consolidated application and expecting faster approval for commercial recovery permits in U.S. waters. However, this regulatory progress does not address TMC's core vulnerabilities: the company remains pre-revenue with negative equity, a $145 million royalty liability, and persistent cash burn. The DeepValue report underscores that TMC's equity functions as a speculative option on uncertain dual regulatory wins, with a crowded market sentiment and high probability of further dilution. While the NOAA rule may shorten timelines, it fails to mitigate the financial fragility and environmental opposition that could stall or derail TMC's path to commercialization.

Implication

The streamlined NOAA process may reduce the time required for TMC to secure a commercial recovery permit, potentially advancing its U.S. regulatory path and aligning with political tailwinds. However, this does not alleviate TMC's negative equity, significant royalty obligations, or ongoing cash burn, which continue to erode per-share value and necessitate dilutive financings. Regulatory risks persist, with the International Seabed Authority's unresolved stance and environmental opposition still posing substantial hurdles to global approval. Market sentiment remains crowded, pricing in optimistic outcomes and leaving little margin for error or delays in the face of binary regulatory decisions. Investors should view this development as a minor positive within a high-risk framework, reinforcing the need for caution until tangible de-risking through permits and non-dilutive financing materializes.

Thesis delta

This news slightly improves the expected timeline for TMC's U.S. regulatory approval, but it does not fundamentally shift the investment thesis. The core risks—financial instability, dilution, and broader regulatory uncertainties—remain unchanged, with the DeepValue report's 'POTENTIAL SELL' recommendation still valid due to high embedded speculation and lack of margin of safety.