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Should This Deep Sea Mining Company Have a Spot in Your Portfolio? | The Mesh Report

Should This Deep Sea Mining Company Have a Spot in Your Portfolio?

The Gold Enthusiast October 4, 2021 Comments Off on Should This Deep Sea Mining Company Have a Spot in Your Portfolio?

Headquartered in Vancouver, Canada, this company is a deep-sea minerals exploration company that engages in the mining of seafloor polymetallic nodules in order to supply metals for electric vehicle (EV) batteries. The Metals Company (TMC) has exploration and commercial rights to three polymetallic nodule contract sites in the Pacific Ocean.

The company went public through a SPAC with Sustainable Opportunities Acquisition Corporation on the Nasdaq back on September 10th, 2021. The company’s cash on hand and proceeds from the SPAC deal are estimated to be about $570 million, which is expected to fund the company’s operations until the commercial production of battery metals as soon as 2024.

Notably, the stock started trading at $8.80 on its debut and had rallied to an all-time high of $15.39 in the following days. However, the stock has since dropped substantially and is currently down 66% from its high.

Industry Outlook

Enhancing the technology around batteries is crucial to the advancement of the EV industry as well as alternative energy development. Without an efficient way to store energy, these industries would not be viable enterprises.

Consequently, companies have increased research & development expenses, aiming to develop more advanced batteries. Battery metals play a critical role in the cathode and other components of the battery composition, thus impacting its performance. According to Allied Market Research, the global battery metals market is projected to reach $20.5 billion by 2027, growing at a CAGR of 8.2% between 2020 – 2027. Increased demand for EVs and consumer electronics devices is projected to be the key drivers of growth for the battery metals industry.

Recent Developments

On September 28th, The Metals Company announced the start of its offshore research campaign, Environmental Expedition 5C. This program has a purpose to set a rigorous environmental baseline and estimate the impact of TMC’s activities “to source critical battery metals from deep-sea polymetallic nodules.”

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