Coalter Lathrop is principal and founder of Sovereign Geographic and a fellow at the Payne Institute for Public Policy at the Colorado School of Mines. He holds advanced degrees in ocean policy and international law.
Aspiring Canadian seabed mining firm The Metals Company (TMC) switched strategies in the first months of 2025 from a lawful, long-standing, multilateral approach – seeking International Seabed Authority (ISA) permission to mine polymetallic nodules in areas beyond the jurisdiction of any state (the international seabed) pursuant to the United Nations Convention on the Law of the Sea (UNCLOS or the Convention) – to an unlawful, unilateral, America Alone approach – seeking, through its subsidiary TMC-USA, United States authorization to mine the international seabed pursuant to a moribund 1980 US statute, the Deep Seabed Hard Minerals Resources Act (DSHMRA), resurrected by the 24 April US Executive Order Unleashing America’s Offshore Critical Minerals and Resources.
In a 17 June interview, TMC CFO Craig Shesky told YouTube’s Rock Stock Channel, “we feel very strongly that the path we’ve taken through the US is the right path and also about as legally buttoned up as we can get.”
But is TMC’s current strategy actually “legally buttoned up”? Far from it. Here are some of the legal obstacles TMC will face if it continues down this path.
No international security of tenure
The US National Oceanic and Atmospheric Administration (NOAA) is the authorizing government agency under DSHMRA. Here is what NOAA has said about the security that accompanies a DSHMRA exploration license: “A DSHMRA exploration license gives the holder the exclusive right to explore a specific area, but only as against other U.S. entities. Any rights a U.S. company may have domestically are not secured internationally because U.S. companies are not able to go through the internationally recognized process at the International Seabed Authority established for Parties to the United Nations Convention on the Law of the Sea (UNCLOS).”
The only NOAA licensee to date, Lockheed Martin, knows this is a substantial obstacle. Issued exploration licenses in 1984, Lockheed has not seen a viable legal pathway to exploitation under US unilateral authorization over the subsequent four decades. According to a 2012 letter from Lockheed’s then-CEO Robert Stevens to the US Senate Foreign Relations Committee, this is why: “the multi-billion dollar investments needed to establish an ocean-based resource development business must be predicated on clear legal rights established and protected under the treaty-based framework of the LOS Convention, including the International Seabed Authority (ISA). Other international players recognize this same reality and are acting upon it.”
The obvious problems associated with mining the international seabed in the absence of international security of tenure are just the beginning of TMC’s exposure.
Violation of US international legal obligations
The United States is not a party to UNCLOS and is not bound by the treaty rules articulated in the Convention. Nonetheless, in this author’s view, any US authorization of mining activity in areas beyond US jurisdiction, such as TMC is requesting, would violate US customary international law obligations. This seems to be the majority view in the community of law of the sea experts though some disagree.
In the current circumstances, the debate is largely irrelevant: this US administration has not prioritized its international legal obligations of late, and violations of those obligations are not likely to be tested in litigation against the US any time soon. But, with a new administration, we might see a reversion to the last thirty years of US conduct, including full engagement with the ISA and no new authorizations under DSHMRA. Anybody intending to be in the seabed mining sector beyond 2028 will want to bear this possibility in mind.
Vulnerable foreign corporate partners
But what about other countries, specifically the 169 countries (including every industrialized nation except the United States and Turkey) who are parties to UNCLOS and are bound by its terms?
On its 14 May first quarter earnings call, TMC touted its “capital-light approach” to seabed mining, an approach “made possible by partners like Allseas and PAMCO providing existing assets.” “Made possible” because TMC does not, itself, own any mining or processing assets. Instead, Allseas, a Dutch company headquartered in Switzerland, owns Hidden Gem. Hidden Gem is the Malta-flagged mining vessel TMC intends to use to lift polymetallic nodules. Pacific Metals (PAMCO) owns the smelting facility in Japan where TMC intends to process its unlawfully acquired nodules. On the earnings call, TMC also suggested possible future processing in Indonesia.
More recently, on 16 June, TMC announced a new partner and strategic investor Korea Zinc, headquartered in Korea. TMC shares jumped from $4.63 to $6.75 on the news. In addition to Korea Zinc’s substantial investment, the company is slated to add to TMC’s nodule smelting partnerships. Consider also Glencore, a holder of substantial offtake rights to TMC’s nickel and copper production, headquartered in Switzerland, and do not forget TMC itself, headquartered in Canada.
What do the Netherlands, Switzerland, Malta, Japan, Indonesia, Korea and Canada have in common?
They are all parties to UNCLOS. As such, they must incorporate their UNCLOS obligations into their national legal systems and enforce those laws against actors over which they have jurisdiction.
What are those obligations?
Much of the answer is provided in a timely post published 23 June on the blog site of the European Journal of International Law and aptly titled “Untouchable metals: How the obligations of UNCLOS States Parties limit the commercial viability of unilateral deep sea mining.”
At risk of over simplifying, states parties to UNCLOS must ensure that their nationals do not appropriate, claim, acquire or exercise rights with respect to the mineral resources of the international seabed, except in accordance with UNCLOS (articles 137(1) and (3)), and they must ensure that nationals participating in mining-related activities on the international seabed do so only in accordance with UNCLOS (article 139(1)). Here, “in accordance with UNCLOS” means, among other things, that all mining activities must be conducted pursuant to ISA authorization. Any state party to UNCLOS that allowed its nationals to participate in international seabed mining activity pursuant to a non-ISA permit would violate its obligation to prevent exactly that.
With this in mind, members of parliament in Switzerland and the Netherlands, both with links to Allseas, have initiated enquiries. In early May a member of the Swiss Parliament asked “What political, legal or diplomatic steps does the Parliament intend to take to discourage or prevent Swiss participation in deep-sea mining projects that are contrary to international law?” In mid-June members of the Dutch Parliament raised essentially the same question.
How long will it take for Japan, Malta, Indonesia, Korea and Canada to begin asking similar questions about their nationals? And when might cease-and-desist orders start hitting corporate mailboxes?
TMC’s capital-light approach is profoundly vulnerable to the legal obligations that are likely to be imposed on its corporate partners by their home nations, but TMC’s problems do not end there.
Prohibition against alienation
Here is another legal problem with TMC’s America Alone approach: a prohibition against alienation (transferring title to property) of minerals recovered from the international seabed other than in accordance with UNCLOS (article 137(2)).
On that first quarter earnings call in May, an investor asked TMC CEO Gerard Barron, “do you foresee any issues with potential customers [referencing the parties to the Convention] for your metals … not being able to purchase these metals from you since they [would] not be collected under an ISA license?” Barron responded, “No, I do not. I’ve heard that reported in the media, but I don’t see that as being any risk whatsoever.”
Really? No risk whatsoever? To the contrary, the risk is massive and easy to understand.
On this point, article 137(2) of the Convention says three things:
(1) “all rights in the [mineral] resources of the [international seabed] are vested in mankind as a whole,”
(2) “these resources are not subject to alienation,” and
(3) “the minerals recovered from the [international seabed] may only be alienated in accordance with [the Convention].”
Perhaps TMC and its prospective smelters in Asia could avoid the prohibition against alienation through tolling arrangements, but ultimately somebody must purchase TMC’s product. Remove the markets of 169 countries, including 18 of the world’s 20 largest economies, and TMC’s business model starts to look a bit shaky.
What is TMC’s plan? To sell metals only to US companies located within the United States? In today’s interconnected global economy, that seems unrealistic. Would General Motors source manganese, nickel and cobalt (three of the main elements in polymetallic nodules and EV batteries) from TMC-USA if doing so would prevent its vehicles from being sold beyond US borders? Probably not.
UNCLOS dispute settlement
Perhaps states parties to UNCLOS will simply ignore their international obligations. This is not unheard of in the international legal system.
What then?
What if the Netherlands allowed a Dutch company to use its mining vessel to participate in violations of international law; Japan, Korea or Indonesia allowed smelting facilities within their territories to process minerals exploited other than in accordance with the Convention; Switzerland allowed companies headquartered in Baar or Châtel-Saint-Denis to mine or trade in minerals of the deep seabed acquired under any permit other than one issued by the ISA; Malta allowed its flag to be flown over the Hidden Gem as it lifts polymetallic nodules from the international seabed under a NOAA permit; or Canada continued to allow the incorporation on its soil of a company trumpeting its new-found “regulatory certainty” while destabilizing the international legal order of the oceans?
In many instances, the consent-based system of international law, a so-called “toothless tiger”, would provide no mechanism to compel compliant behavior. Not so here; UNCLOS has teeth.
The Convention contains robust compulsory dispute settlement provisions designed to address “any dispute concerning the interpretation or application of this Convention” (article 288). States parties to the Convention may opt out of dispute settlement for a small handful of topics, but mining the international seabed without ISA permission is not on that list.
Thirty-seven states (and counting) have called for a moratorium or precautionary pause on seabed mining. Thirty-six of them are . . . you guessed it . . . parties to UNCLOS, Switzerland, Canada and Malta among them. These states are motivated to prevent precisely what TMC proposes to do, and the Convention gives them the tools.
If any national of any party to the Convention were to engage in, assist with or purchase products derived from seabed mining in violation of the Convention, and if the state of nationality did not take measures to prevent its nationals from doing so, that state could well find itself on the responding end of a claim initiated by a fellow state party to UNCLOS.
Parting thoughts
If NOAA were to grant TMC-USA’s request for authorization to mine the international deep seabed, TMC-USA would have good tenure against Lockheed Martin and no one else. Unless and until TMC-USA acquires its own mining vessel (flagged by the US or another non-UNCLOS state) and smelting facility (located in the US or another non-UNCLOS state), its capital-light approach may present a fatal problem. And, if TMC-USA does not penetrate markets in non-UNCLOS states (e.g., Venezuela, Turkmenistan, Tajikistan, South Sudan, North Korea), it may be unable to sell its processed metals anywhere other than the US.
One wonders whether any of the above is new information for TMC leadership. Perhaps it is. It is also information the well-informed investor might wish to consider before sinking their money into this venture.
Leave a Reply