A study of The Metals Company's two seabed mining projects found an 83% chance they would lose money. The report was paid for by groups opposed to deep-sea mining, and TMC says its first projects can earn 27% a year.
At a glance
- Koinon ran 10,000 simulations of costs and outcomes for TMC's NORI-D and TOML projects.
- It estimated that the nodule collection system would likely cost about 1.9 times what TMC expects.
- TMC's own scenario values the two projects at $23 billion, against the study's median of minus $5 billion.
Background
Deep-sea mining would collect potato-sized rocks called polymetallic nodules from the ocean floor. They contain nickel, cobalt, copper and manganese, all used in batteries and steel. The Metals Company (TMC) is the best-known company trying to mine them in the Pacific. No one mines nodules commercially yet, so nobody knows what it really costs.
What the study found
Consultancy Koinon stress-tested the economics of TMC's two projects, NORI-D and TOML, using 10,000 simulations. It found an 83% probability that the projects return a loss. At an 8% discount rate, the median net present value was minus $5 billion.
In 60% of the simulations, the nodule collector lost cash in every single year. "The returns are too low for the technical, operational, environmental, price, demand and social risks involved," said Johnny West, principal at Koinon.
Why the numbers differ so much
The biggest variable is the cost of building the equipment. Koinon estimated that, based on typical overruns in frontier industries, the collection system would cost about 1.9 times TMC's expected figure. Changes in capital spending alone could swing the projects' value by more than $8 billion.
Financing makes it harder still. The study argues that cheaper bank debt is unlikely to be available, so the projects would rely on equity investors expecting returns of 25% to 30%. TMC's own projection values the two projects at $23 billion and an after-tax return of 27%.
Who paid for it, and what it means
The report, titled "Case Not Proven: The Economics of Deep-Sea Mining", was commissioned by five groups that oppose rushing into deep-sea mining. They include the Deep-Sea Conservation Coalition and the International Union for the Conservation of Nature. TMC says it can mine with a lower environmental impact than land-based mines.
For metal markets, the debate matters because seabed nodules are often presented as a new source of nickel and cobalt. If the projects cannot make money, that extra supply may never arrive. India is exploring the same resource and has put two Andaman Sea blocks rich in cobalt and nickel nodules up for auction.
Our read
Outlook: neutral. Deep-sea nodules supply no cobalt today, so the study does not change current prices. It does raise doubt over one possible future source of supply.
What to watch
- TMC's detailed response to the study's cost assumptions.
- Whether TMC lines up financing for its first nodule project.
- Bidding interest in India's Andaman Sea offshore mineral auction.
For information only, not investment advice.
Cobalt price in India
metalscost.com India reference price as of 2026-10-16.
Detailed analysis
Timeline
- 2026-10-05: Koinon publishes its report on the economics of deep-sea mining.
Supply Drivers
If seabed projects are uneconomic, nodules are unlikely to add meaningful cobalt or nickel supply.
Mining Production
The study puts the main cost risk in the nodule collector, estimated at about 1.9 times TMC's figure.
What could lift prices
- Doubts over seabed supply strengthen the position of existing land-based cobalt producers.
- One possible new source of nickel and cobalt looks less certain.
What could weigh on prices
- TMC still projects a 27% return and may yet bring nodule supply to market.
- The study was commissioned by opponents of deep-sea mining, which TMC can point to.
Country impact
| Country | Impact | Reason |
|---|---|---|
| India | Low | India is auctioning its own nodule-rich Andaman Sea blocks. |
| Democratic Republic of the Congo | Low | The report says seabed mining would mainly cut revenue for land-based mineral producers like Congo. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Critical Minerals Mining | Neutral | The study questions a new supply route without affecting current output. |
Who gains, who loses
- Opponents of deep-sea mining: They gain an economic argument alongside their environmental one.
- The Metals Company: The study could make investors more cautious about funding its projects.
Other ways this could play out
- If TMC keeps costs near its own estimates, the projects could earn returns far above the study's median.
- If costs overrun as the study expects, nodule supply may never reach the market.
Price risks
- A successful first nodule project would add new cobalt and nickel supply.
- Changes in land-based supply would matter far more for cobalt prices in the near term.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
Related
India