Why Shares of TMC the metals company Ripped 450.9% Higher in 2025 and Can Continue Flying Higher in 2026

The Metals Company (NASDAQ: TMC) saw a dramatic re-rating after policy catalysts — shares jumped 450.9% in 2025 and were up 25.9% YTD in 2026 — following presidential executive orders in late March/April to advance deep-sea mining and a new NOAA rule updating exploration and commercial recovery regulations. Korea Zinc committed $85.2 million for 19.6 million shares and trade tensions/Chinese export limits on critical minerals have highlighted TMC as a domestic-source play for copper, cobalt, manganese and nickel, although material regulatory and execution risks remain.

Analysis

Market structure: Immediate winners are The Metals Company (TMC), engineering/contractors for seabed recovery, and U.S. refiners/partners (e.g., Korea Zinc tie-ups) as policy lowers permitting risk. Losers include China-dominant processors and exporters of nickel/cobalt/rare earths if U.S. supply ramps; expect downward pressure on premiums for these commodities over a 3–7 year commercial ramp. Cross-asset: higher capex and project risk should push credit spreads wider for junior miners (100–300bps), lift equity volatility in the sector (+30–70% realized vs. general market), and put mild downside pressure on commodity-linked FX (AUD/CAD down 2–6% in scenario of rising U.S. supply).

Risk assessment: Tail risks with outsized impact include a legal/environmental injunction or international treaty restraint (low-medium probability, high impact), catastrophic technical failure in nodules recovery, or Chinese countermeasures on exports. Near-term (days–months) volatility will be headline driven; medium-term (6–24 months) depends on offtake/refining deals; long-term (2–7 years) on successful commercial production. Hidden dependencies: insurance, ship/processing capacity, and binding offtake contracts (Korea Zinc is a key mitigant).

Trade implications: Tactical allocation should be size-constrained and event-driven: buy optionality on TMC with long-dated calls or small spot exposure, hedge with established large-cap copper exposure (FCX) and finance via covered calls. Pair trades: long US upstream optionality (TMC) vs. short highly leveraged juniors that rallied without permits. Key catalysts to watch in 30–90 days: NOAA rule implementation, any DOJ/NEPA legal filings, Korea Zinc execution milestones, and China export-policy moves.

Contrarian angles: Consensus discounts timeline and execution risk; policy support ≠ immediate production — compare to shale oil and rare-earth cycles where policy headlines took 3–7 years to affect supply. Reaction may be overbought for speculative names; mispricings exist in juniors that rallied >100% without capital plans. Unintended consequences include reputational/insurance cost inflation and elevated capex that compresses mid-cycle IRR, so avoid levering speculative positions.

Key Decisions for Investors

• Establish a capped 2–3% portfolio long in TMC (NASDAQ:TMC) using Jan-2028 LEAP calls (buy ATM or 10–20% OTM) to capture binary upside; tranche-add on a 25% pullback and trim 50% on a +100% move; hard stop: reduce to zero on any court-ordered moratorium or major environmental injunction.
• Buy a 3% position in Freeport-McMoRan (NYSE:FCX) as a hedge to copper exposure and commodity upside (12–24 month hold); finance by selling 6-month covered calls 15–25% OTM to generate ~3–6% annualized yield, or place cash-secured puts at ~30-delta to lower entry if FCX falls 10–20% from today.
• Reduce exposure to China-dependent processing/rare-earth names — trim MP Materials (NYSE:MP) by 20% over the next 30 days and redeploy proceeds into the TMC optionality/FCX exposure. If NOAA/DOI regulatory milestones clear within 60 days and Korea Zinc executes milestones, increase TMC allocation by an incremental 1–2%.