The stock price of Critical Metals surged nearly 53% in pre-market trading on Monday, October 6th, following reports from Reuters that the U.S. government is in talks to acquire a stake in the mining company. This move is the latest attempt by the Trump administration to secure the rare earth mineral supply chain.
If successful, this deal would give the U.S. government a direct stake in Greenland’s largest rare earth project. Greenland, a strategically important Arctic region with abundant mineral resources, was suggested by President Trump for U.S. takeover.
Neha Mukherjee, research manager at Benchmark Mineral Intelligence, stated, “U.S. investment in Tanbreez marks an important step in establishing a diversified supply chain independent of China in the ‘mine to magnet’ sector.”
The U.S. government has been pushing to secure critical mineral supplies and reduce dependence on China, having previously invested in producers such as Lithium Americas and MP Materials.
Mukherjee further mentioned that the government not only supports domestic projects but also targets overseas assets in resource-rich but underdeveloped regions. She added, “This also indicates that we may see more such deals, particularly in early-stage projects with significant resource potential.”
Critical Metals acquired Greenland’s Tanbreez rare earth deposit last year for $5 million in cash and $211 million in stock.
The company reportedly applied for a $50 million Defense Production Act grant earlier this year, and discussions in Washington have been ongoing about converting the grant into equity.
Sources revealed that if finalized, this conversion would amount to approximately 8% of the company’s equity, though negotiations are still in the preliminary stages.
Additionally, Critical Metals announced that they have agreed to raise $35 million in funding from an unnamed institutional investor to support the development of Tanbreez.
The company’s stock has risen by about 17% year-to-date, with a current market value of approximately $787 million.
On Monday, the company also announced restatements of financial statements as of December 31, 2024, and the same period in 2023, cautioning investors not to rely on previous reports.
Notably, Critical Metals is a Nasdaq-listed company, with its other key asset being the Wolfsberg lithium project inherited from European Lithium listed in Australia. The U.S. government’s interest in Critical Metals demonstrates a global layout of the critical mineral supply chain strategy across continents and multiple mineral types.