Critical Metals' shares surge on report US eyeing equity stake in company

Shares of Critical Metals (CRML) surged more than 75% in premarket trading on Monday after reports surfaced that the US government is in discussions to take an equity stake in the New York-based mining company.

The potential stake would give Washington a direct interest in Greenland’s Tanbreez project — one of the world’s largest rare earth deposits, according to a Reuters report citing four people familiar with the matter.

The Arctic territory has long drawn US strategic interest, with President Donald Trump previously suggesting the United States should purchase Greenland outright because of its rich mineral resources and geopolitical value.

If finalised, the deal would represent a major shift in US resource policy, linking the government directly to a development-stage mining company critical to securing rare earth supply chains dominated by China.

The news also sent shares of Australian-based European Lithium — which holds a 60% stake in Critical Metals — soaring more than 127% on Monday.

As of the last close, Critical Metals’ shares have gained over 17% year-to-date, valuing the company at nearly $787 million.

Over the past two years, the US has taken stakes in other mining ventures, including Lithium Americas (LAC) and MP Materials (MP), to secure domestic access to lithium and rare earths.

Tanbreez deposit is a strategic bet amid growing US-China competition

Once it begins operations, the Tanbreez Project is projected to supply rare earth elements to customers across the western hemisphere, supporting the manufacture of next-generation commercial technologies and meeting growing demand from the defence sector.

The project is estimated to contain more than 27% heavy rare earth elements (HREEs), which are significantly more valuable than their lighter counterparts.

The Tanbreez deposit has also been politically sensitive for years.

Under President Joe Biden, the US lobbied successfully for Critical Metals to acquire the site for $5 million in cash and $211 million in stock — significantly less than what a Chinese firm had reportedly offered.

Rare earth metals, a group of 17 elements used in everything from smartphones and electric vehicles to fighter jets and missiles, have become central to the global power competition between Washington and Beijing.

China currently processes nearly 90% of the world’s supply.

Earlier this year, President Trump invoked emergency powers to boost domestic production of critical minerals, part of his broader strategy to lessen US dependence on Chinese materials.

“Hundreds of companies are approaching us trying to get the administration to invest in their critical minerals projects,” a senior administration official told Reuters.

“There is absolutely nothing close with this company at this time,” the official added, underscoring that talks remain preliminary.

Terms of the potential deal still under discussion

Critical Metals, which aims to supply both US and European markets, applied earlier this year for a $50 million grant under the Defense Production Act.

Over the past six weeks, Washington has begun discussions about converting that grant into an equity stake, three of the sources told Reuters.

If completed, the conversion would equate to roughly an 8% ownership stake in the company, though negotiations are not final.

Part of the discussion reportedly involves how warrants would be structured to provide Washington with the right to acquire the stake.

The possible equity investment would be in addition to a separate $120 million loan being considered by the US Export-Import Bank to help fund the Tanbreez project.

Funding push for critical minerals

Administration officials have reportedly considered reallocating $2 billion from the CHIPS and Science Act — originally signed into law by President Biden in 2022 — to fund critical minerals projects.

The law was designed to strengthen the US semiconductor industry and reduce reliance on Asian manufacturing hubs.

Sources told Reuters that negotiations over the Critical Metals stake had been delayed due to ongoing talks regarding a separate 5% investment in Lithium Americas.

Despite the looming US government shutdown, officials said discussions on the Critical Metals stake are continuing, as the staff involved are classified as essential personnel.

For now, the potential deal underscores how Washington’s competition with Beijing over critical resources has expanded from policy rhetoric to direct financial participation — and how Greenland, once a geopolitical curiosity, is re-emerging as a key front in the global minerals race.