What happened
After closing at a 52-week high on Tuesday, shares of The Metals Company (TMC) plummeted 15.4% yesterday. The decline is extending into today's trading session. With a growing number of nations raising doubts about deep sea mining, the market is sensing that The Metals Company, a company aspiring to produce battery metals from mineral formations harvested from the seafloor, is facing formidable political opposition that may impede its growth.
As of 10:57 a.m. ET, shares of The Metals Company are down 15.8%.
So what
The Financial Times reported today that numerous British Parliament members have raised concerns about deep sea mining to the prime minister. More than 20 parliamentarians addressed their concerns in a letter, stating, "The risks to deep-sea ecosystems are too great for it to be permitted to start."
A growing number of voices outside the U.K. are also sounding concerns about the dangers of deep sea mining. In early June, for example, the European Academies Science Advisory Council issued a statement in which it argued for a moratorium on deep sea mining due to the potential environmental dangers. Corporations such as Alphabet and BMW are also dubious about the prospects of mining the seafloor for metals.
Currently, the International Seabed Authority (ISA), an international organization established by the U.N., is meeting in Jamaica where it's discussing a potential regulatory framework for deep sea mining.
The Metals Company aims to produce battery metals -- nickel, cobalt, copper, and manganese -- from polymetallic nodules found on the seafloor.
Now what
While there's growing opposition to deep sea mining, there's also a considerable amount of support for the burgeoning industry. For those who had been bullish on the prospects of The Metals Company, it seems premature to trim their positions based on those articulating concerns about the risks of mining the seafloor. Instead, metals-minded investors would be better off waiting for the ISA to conclude its meeting and reveal its conclusions before making any investment decisions.