The Pacific island nation of Nauru has signed a new agreement with Canadian firm The Metals Company (NASDAQ: TMC), moving one step closer to commercial mineral extraction from the seabed in international waters. The arrangement leverages U.S. high seas mining legislation, placing it outside the jurisdiction of the International Seabed Authority (ISA), the global body that typically governs such activity.
The contract specifically states Nauru will be paid set amounts once the company does engage in seabed mining under the US regime. And it’s a significant amount of money. It can be initial payments of US$265 million and can go up to US$515m.
And then on top of that, there are what’s called share warrants, which is the ability for Nauru to buy into The Metals Company at a favourable price.
The new contract between TMC and Nauru is dated 29 May and was officially filed with the U.S. Securities and Exchange Commission on 4 June.
The timing of the deal is significant, coming as the ISA convenes in Jamaica for a key session. Nauru is one of 170 ISA member states and holds exclusive rights to a designated area in the Clarion Clipperton Zone (CCZ), a resource-rich part of the Pacific Ocean floor.
While the ISA has been working on a regulatory mining code since 2014, progress has stalled — prompting frustration among companies like TMC, which has partnered with Nauru since 2011 to explore potential mining operations in the CCZ. Rather than continue waiting for the ISA’s framework to materialize, TMC and Nauru are now pursuing the American route, a move that has sparked widespread concern.
