Critical Metals pares gains as U.S. government talks report downplayed

Critical Metals (NASDAQ: CRML) shares gave up some their early gains Monday afternoon after the White House shot down reports that it is considering buying a stake in the rare earths company.

Citing an unidentified government official, Bloomberg reported Monday that the Trump administration wasn’t actively considering an investment in Critical Metals. Reuters had reported late Friday that the United States government was said to be interested in buying a stake in the company as part of the Trump administration’s broader strategy to expand its control over the world’s supply of critical minerals. 

Critical Metals stock still climbed 45% to $11.62 in afternoon trading on the Nasdaq market Monday, boosting the company’s market capitalization to about $1.1 billion. Earlier the stock rose to as high as $16.68, more than twice Friday’s closing price of $7.98.

A deal with Critical Metals, if finalized, would give Washington a direct interest in the Tanbreez project in southern Greenland, one of the largest rare earth deposits in the world. The Reuters report, dated Friday, followed an announcement by Critical Metals that it had more than doubled its interest in the project from 42% to 92.5%.

High profile

Washington has engineered several high-profile transactions in recent months to buy stakes in companies with projects or mines that could become key suppliers of critical minerals to the domestic market.

Last month, the U.S. Department of Energy agreed to buy a 5% stake in Lithium Americas (NYSE: LAC), whose flagship project in Nevada is slated to become the largest source of battery-grade lithium in the Western Hemisphere. Two months earlier, the Department of Defense (now re-branded the “Department of War”) acquired a $400 million – or 15% – stake in MP Materials (NASDAQ: MP), the nation’s only rare earths producer.

New York-based Critical Metals is one of “hundreds of companies” with critical minerals projects that have approached the U.S. government for investment, a Trump official said when contacted for comment by Reuters.

Any equity investment, according to Reuters, would be separate from the $120 million loan being lined up by the U.S. Export-Import Bank, which was announced in June.

Large project

Tanbreez has at least 45 million tonnes in total resources hosted within a massive kakortokite unit that has largely been underexplored to date, the company says. One-third of that resource is categorized as “heavy” rare earths used widely in high-performance applications such as clean energy and defense. These are more sought after than the more common “light” rare earths.

According to Critical Metals, the Tanbreez rare earths were discovered in an orebody covering 8 km x 5 km, representing only 1% of the entire 4.7-billion-tonne host rock. Exploration is under way to further expand the resource in support of a bankable feasibility study.

A preliminary economic assessment for Tanbreez, released earlier this year, showed an after-tax net present value of $2.1–$2.7 billion at discount rates of 12.5% and 15%, respectively. The internal rate of return is about 180%, while capital costs were pegged at about $300 million.

The report outlines a phased growth strategy for Tanbreez, with initial production of around 85,000 tonnes of rare earth oxides per annum, beginning as early as 2026, then scaled to 425,000 tonnes after modular expansion.

Critical Metals had previously said Tanbreez would cost $290 million to bring into commercial production, with initial work to be funded by the EXIM Bank loan.

Greenland interest

Due to its vast endowment of resources and critical minerals, Greenland has attracted U.S. economic interest dating back to the Biden administration. U.S. officials visited the capital, Nuuk, as recently as last November as part of ongoing efforts to get private investment in the island’s mineral sector.

According to Reuters, the Biden government successfully lobbied Tanbreez’s then-owner not to sell the project to a Chinese developer and instead sell it to Critical Metals for a cheaper price.

Current President Donald Trump also made no secret of his desire to “own” the Danish territory. Earlier this year, Vice President JD Vance made a quick trip to Greenland to make Trump’s pitch.

Greenland’s mining sector has seen little progress over the years due to limited investor interest, bureaucratic challenges and environmental concerns. Two small mines are now in operation.

As for Critical Metals, the company would still have to build a processing facility for the rare earths. Its representatives have said their goal is to process the material inside the U.S.