Four informed sources told Reuters that officials from the Trump administration are discussing the possibility of investing in Critical Metals Corp., as part of the latest move to ensure a stable supply of rare earth metals and accelerate the United States’ independence from reliance on China for rare earth metals. This would enable the United States to participate in the largest rare earth project on Greenland.
If the deal is finalized, the U.S. government would directly acquire a stake in Tanbreez, the largest rare earth project on Greenland. Greenland holds strategic importance with its rich mineral resources, and President Trump has mentioned the idea of purchasing Greenland multiple times. In March of this year, Vice President Pence even visited Greenland. One of the largest U.S. air force bases is located in northern Greenland.
During the Biden administration, the White House showed significant interest in the Tanbreez project. At that time, U.S. government officials successfully persuaded the sale of the mining rights to the New York-based Critical Metals Corp. at a price far lower than what a Chinese company had offered.
A senior official from the Trump administration responded to Reuters’ request for comment, stating, “Hundreds of companies are contacting us, trying to get the government to invest in their critical mineral projects. At the moment, there is absolutely no deal imminent with this company.” Critical Metals Corp. did not respond to the comment request.
Last year, Critical Metals Corp. agreed to acquire Tanbreez on Greenland for $5 million in cash and $211 million in stocks, and in June of this year, they applied for a $50 million fund allocation under the U.S. Defense Production Act. However, three informed sources told Reuters that in the past six weeks, the U.S. government has begun discussions with the company about converting this fund allocation into a stock ownership. If the deal goes through, the $50 million fund allocation would convert into approximately 8% stake in the company. However, the negotiations have not been finalized, and the final ownership percentage could be higher, but there is also a possibility of the deal falling through.
According to two informed sources, these shares would be separate from a $120 million loan that the Export-Import Bank of the United States (EXIM) is considering, aimed at assisting Critical Metals Corp. in developing the Tanbreez rare earth mining project.
In June, Reuters revealed that Critical Metals Corp. had received a letter of intent from EXIM for a financing plan of up to $120 million. EXIM explicitly stated that the loan plan aims to support enterprises competing with China. If approved, the loan repayment period could extend up to 15 years, which is better than the terms the company could obtain through private financing.
Neha Mukherjee, the research manager from Benchmark Mineral Intelligence, said, “The U.S. holding stakes in Tanbreez marks a significant step towards establishing an independent, diversified ‘mine-to-magnet’ supply chain away from China.”
Mukherjee further stated that the government not only supports domestic projects but also targets overseas assets in resource-rich but underdeveloped regions.
“This also indicates that we may see more of such transactions, especially in early-stage projects with significant resource potential,” Mukherjee added.
Rare earth metals are essential raw materials for permanent magnets, widely used in electric vehicles, missile systems, and other high-tech industries, crucial for U.S. national security and supply chain. Obtaining rare earth metals has long been at the core of the U.S.-China trade war. Due to the Chinese government’s support for the rare earth industry over the years, China holds approximately 70% of global rare earth mineral extraction and 90% of refining capacity.
In April this year, amid the escalating U.S.-China trade war, Beijing began restricting the export of rare earth metals and related products. U.S. and global automobile, electronics, and defense companies have struggled to obtain a stable supply of rare earth products. Subsequent to the U.S.-China trade negotiations, although China had partially lifted restrictions on the export of rare earth magnets, exports to defense enterprises remained restricted. This has spurred the U.S. government to expedite actions to break China’s monopoly in the rare earth market and promote the development of the domestic rare earth industry to swiftly diminish reliance on China.
The U.S. government recently announced its investment in the Canadian company Lithium Americas, which is developing one of the world’s largest lithium mines in northern Nevada. The Pentagon also reached an agreement with U.S. rare earth miner MP Materials, holding a 15% stake in the company, becoming the largest shareholder in MP Materials.