Shares of TMC the Metals Company (TMC 7.66%) are jumping on Thursday, up 8.6% as of 2:46 p.m. ET. The rise comes as the S&P 500 (^GSPC 0.34%) and Nasdaq Composite (^IXIC 0.17%) gained 0.3% and 0.1%, respectively.

TMC's stock is getting a boost from a major deal announced this morning between the Pentagon and another mining company.

The Trump administration is backing rare earths

Last week, President Trump mused about the possibility of the federal government investing in domestic rare earth mining. The U.S. is extremely dependent on foreign rare earth elements -- especially from China -- which are critical to many key defense systems.

This morning, MP Materials, which owns the only operational rare earth mine in the U.S., announced that the Department of Defense (DoD) is investing $400 million in the company. The deal will see the DoD become the largest shareholder, controlling nearly twice the shares of CEO James Litinsky and the next-largest shareholder, BlackRock Advisors.

Image source: Getty Images.

More deals could be coming

Rare earth and critical mineral mining companies across the board saw their shares lifted by the news on the hope that the Trump administration would make additional deals. Although the administration hasn't explicitly stated it will, it has indicated as much. TMC could very well be the beneficiary of a similar deal.

Still, this is pure speculation. There are no guarantees. There's a lot of hype behind TMC -- it is entirely pre-revenue -- and I would stay away from the stock unless you have a particularly high risk tolerance and are willing to lose your investment. However, there is a significant upside if things pan out.