U.S. officials are reportedly in discussions to acquire an equity stake in Critical Metals Corp (CRML.O), potentially converting a $50 million grant application into an approximate 8% ownership, to secure a direct interest in Greenland's strategically important Tanbreez rare earths project. This initiative underscores the U.S.'s broader strategy to reduce reliance on China for critical minerals, complementing previous investments and a potential $120 million EXIM loan for the project, which aims for commercial production by 2026.
Oct 3 (Reuters) - Trump administration officials have discussed taking a stake in Critical Metals Corp (CRML.O), four people familiar with the discussions told Reuters, which would give Washington a direct interest in the largest rare earths project in Greenland, the Arctic territory that President Donald Trump once suggested buying. If finalized, the deal would mark the latest political twist for the Tanbreez rare earths deposit, which former President Joe Biden successfully lobbied to have sold to New York-based Critical Metals for far less than a Chinese firm was offering. Get a daily digest of breaking business news straight to your inbox with the Reuters Business newsletter. Sign up here. Advertisement · Scroll to continue Washington has recently taken stakes in Lithium Americas (LAC.TO) and MP Materials (MP.N), underscoring Trump's desire for the U.S. to benefit from growing production of minerals used across the global economy. Details of the discussions about Washington's interest in an equity stake in Critical Metals have not previously been reported. The four sources declined to be named, citing the sensitivity of the negotiations. "Hundreds of companies are approaching us trying to get the administration to invest in their critical minerals projects," a senior Trump administration official told Reuters in response to a request for comment. "There is absolutely nothing close with this company at this time." Advertisement · Scroll to continue Critical Metals did not respond to repeated requests for comment via email and phone. Greenland is a semi-autonomous part of Denmark and the Danish Embassy in Washington did not immediately respond to a request for comment. Rare earths offer strong magnetic properties critical to high-tech industries ranging from electric vehicles to missile systems. Their importance is spurring an intense push for fresh supplies by Western countries looking to lessen their dependence on China's near total control of their extraction and processing. Critical Metals, which agreed to buy Greenland's Tanbreez deposit last year for $5 million in cash and $211 million in stock, applied in June for a $50 million grant through the Defense Production Act, a Cold War-era piece of legislation aimed at boosting production of goods for national security purposes. In the last six weeks, though, the administration has begun discussions with the company about converting the grant into an equity stake, three of the sources said. If the deal goes through, a $50 million conversion would mean a roughly 8% stake in the company, although negotiations are not final and the final size of the stake could be higher or the deal itself could collapse, the same three sources said. Administration officials have considered reallocating $2 billion from the CHIPS Act to fund critical minerals projects, Reuters reported in August. The law, formally known as the CHIPS and Science Act, was signed into law by then-President Joe Biden in 2022 and aims to lure chip production away from Asia. The Critical Metals investment discussions were delayed by the administration's negotiations in recent days for a 5% stake in Lithium Americas(LAC.TO), two of the sources said. The U.S. government shutdown is not expected to affect the negotiations, given that high-level staff involved in the discussions are considered essential government workers, two of the sources said. Part of the discussion centers on how warrants would be issued to give Washington the stake, one of the sources said. Warrants give their holders the right to buy stock at a set price. The equity stake would be separate from a $120 million loan the U.S. Export-Import Bank (EXIM) is considering to help the company develop Tanbreez, according to two of the sources. An EXIM spokesperson was not immediately available to comment. GREENLAND'S APPEAL Even before Trump expressed an interest in acquiring Greenland, Washington had long-running economic interests in the Danish territory. Biden officials were visiting Greenland's capital Nuuk as recently as last November trying to woo additional private investment in the island's mining sector. Trump also sent Vice President JD Vance to the island in March. One of the largest U.S. Air Force bases is in northern Greenland. The Tanbreez project is expected to cost $290 million to bring into commercial production, the company has previously said. The EXIM loan would be used to fund technical work and get the mine to initial production by 2026. Once fully operational, the mine is expected to produce 85,000 metric tons per year of rare earths concentrate. The site also contains gallium, which China subjected to export restrictions last year, and tantalum. Greenland's mining sector has developed slowly in recent years, hindered by limited investor interest, bureaucratic challenges and environmental concerns. Currently, only two small mines are in operation. The remote, cold location of Tanbreez is seen posing challenges to its development, although the deposit is located near a major waterway. Reporting by Jarrett Renshaw, Ernest Scheyder and Gram Slattery; Writing by Ernest Scheyder; Editing by Veronica Brown, Jason Neely and Edmund Klamann Our Standards: The Thomson Reuters Trust Principles. The Trump administration is reportedly in advanced discussions to acquire an approximate 8% equity stake in Critical Metals Corp (CRML.O) by converting a $50 million grant application. This move, aiming to secure direct interest in Greenland's strategically vital Tanbreez rare earths deposit, aligns with a broader U.S. imperative to reduce critical mineral dependence on China, following similar investments in Lithium Americas (LAC.TO) and MP Materials (MP.N). The Tanbreez project, acquired by Critical Metals for $5 million cash and $211 million in stock, is projected to cost $290 million to bring into commercial production by 2026, targeting 85,000 metric tons per year of rare earths concentrate. Further bolstering its development, the U.S. Export-Import Bank is concurrently evaluating a separate $120 million loan, underscoring the project's national security significance. Despite the strategic appeal, an administration official indicates that "nothing close" is finalized, reflecting the sensitive and ongoing nature of negotiations, which could still collapse. The project also faces inherent challenges typical of Greenland's nascent mining sector, including limited investor interest, bureaucratic hurdles, and the remote, cold location, albeit near a major waterway.
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