We believe the economics of TMC’s operations are not viable and that the company will be a repeat of Nautilus. We expect Gerard Barron to leave the ship when this becomes obvious, as he did with Nautilus.
These are the concluding words in Iceberg Research’ latest report on The Metals Company (TMC).
The small, secretive firm is known in financial circles for its activist approach and short-selling reports on companies it believes to be overvalued, flawed, or fraudulent.
By the time the report was published, TMC’s stock had soared 290 per cent year-to-date, fueled by its pivot to U.S. permits under the Deep Seabed Hard Mineral Resources Act (DSHMRA) and President Trump’s executive order to fast-track deep-sea mining permits.
This bypasses the stalled International Seabed Authority (ISA), which TMC has criticized for delaying its plans in the Clarion-Clipperton Zone (CCZ). The report, however, sees the stock rally as unsustainable, warning of icebergs ahead for TMC’s economic viability.
Iceberg Research compares TMC to Nautilus Minerals, a failed deep-sea mining venture where TMC’s CEO Gerard Barron and founder David Heydon were early investors, reaping profits by selling shares before its 2019 bankruptcy. Nautilus went bankrupt after operating costs escalated without a pre-feasibility study (PFS).
Iceberg warns that TMC is repeating this pattern, lacking a PFS for its Nori-D project in the Clarion-Clipperton Zone (CCZ) despite claiming completion in November 2024, a claim undermined by the absence of expert sign-off by March 2025. A PFS is a critical document that estimates economically viable reserves.
Furthermore, Iceberg believes TMC’s economic assumptions are overly optimistic, questioning whether mining in harsh conditions in the deep sea could be cost competitive with mining metals in open pits onshore. The research firm believes this is not the case, and the reason why the largest mining companies in the world haven’t shown interest in deep-sea mining.
To this point, Iceberg also notes that TMC uses a discount rate to determine their projects’ net present value of 9 per cent, which it believes is too low compared to 8 per cent for land-based nickel projects.
The report states that TMC’s estimated operating costs will surge. To support that claim, it points to costs in selected open-pit mines, which average 60 USD per ton of ore processed. In contrast, TMC believe its mining costs will be below 27 USD per ton (total offshore costs of 36 USD per wet tonne).
The oil industry has shown that this is improbable. The cost of offshore oil production is unsurprisingly much more expensive than conventional onshore, writes Iceberg Research, which already sees signs of cost increases for TMC on ship dayrates and processing costs.
Commodity prices further weaken TMC’s case. In 2021 and 2022, (battery) metal prices had soared due to fears of supply crunches and increasing demand for electric vehicles. Fast forward to today, and the prices have mostly decreased, and are below TMC’s original assumptions, with copper being an exception. The decreases are driven by Indonesian supply and the rise of lithium iron phosphate (LFP) batteries, which demand fewer metals.
Iceberg Research points out that existing onshore mine reserves can support current production levels for decades, and metals can to some degree be substituted by other metals if one becomes too expensive.
The research firm adds another nail to TMC’s coffin – the nodule collection numbers. In 2022, the company conducted a pilot test and reported collecting 4,500 tons of nodules. Their stated sustained production rate was 86 tons per hour. Iceberg Research found this number to be significantly less than TMC’s previous assumptions of 146 tons per hour.
The report sees three potential factors explaining the discrepancy: lower actual nodule abundance on the seafloor, lower collector efficiency, and lower speed of the collector.
In summary, Iceberg Research estimates a devastating net present value for TMC’s nodule project of negative 721 million USD, compared to TMCs initial estimate of 6.8 billion USD.
Consequently, Iceberg believes the economics of TMC’s operations are not viable and that the company will face bankruptcy, as Nautilus Minerals did.
Iceberg Research’ warnings to investors are severe. While it’s important to keep its short-selling agenda in mind, its concerns about costs, transparency, and market dynamics demand answers from TMC.
As the company navigates U.S. permits and global scrutiny, its ability to address these issues will shape not only its future but also the trajectory of deep-sea mining. Other companies may face similar scrutiny, underscoring the industry’s challenge to prove economic, technological, and environmental viability.