TLDR
- Critical Metals Corp (CRML) stock surged 75% in premarket trading following reports of government investment talks
- Trump administration negotiating to convert $50 million Defense Production Act grant into approximately 8% equity stake
- Deal would give U.S. direct ownership in Tanbreez project, one of North America’s largest rare earth deposits in Greenland
- Company acquired Tanbreez last year for $5 million cash and $211 million stock after Biden administration blocked Chinese buyers
- Negotiations ongoing for six weeks but remain unfinalized with possibility of larger stake or deal collapse
Critical Metals Corp experienced a massive premarket rally on Monday. Shares climbed 75% after Reuters reported active negotiations with the Trump administration.
The talks involve converting a previously awarded grant into government ownership. Critical Metals applied for a $50 million Defense Production Act grant in June.
Washington now wants to transform that grant into an equity position. The conversion would give the federal government roughly 8% ownership of the company.
Sources familiar with the discussions cautioned that terms remain fluid. The final stake could be larger than 8%.
The deal might not happen at all. Negotiations have progressed over six weeks but lack finalization.
Greenland Rare Earth Access
The Tanbreez project drives government interest. Critical Metals purchased this Greenland asset last year for $5 million cash plus $211 million in stock.
Biden administration officials lobbied for American acquisition. Their efforts successfully prevented Chinese companies from buying the property.
Tanbreez represents one of North America’s largest rare earth element deposits. These 17 specialized metals power consumer electronics, electric vehicles, and military equipment.
China dominates global rare earth production and processing. Trump administration officials seek to reduce this dependence through domestic investment.
President Trump used emergency powers earlier this year. The action aimed to accelerate critical mineral production in the United States.
The government views rare earths as essential for national security. Applications range from missile defense systems to renewable energy technology.
Government Mining Investments
Critical Metals joins other mining companies receiving federal backing. The U.S. recently acquired a 5% stake in Lithium Americas.
Those Lithium Americas negotiations delayed the Critical Metals talks. Washington also holds a 15% position in MP Materials.
The pattern shows a coordinated strategy. The administration is building direct ownership in strategic mineral suppliers.
Critical Metals discussions include warrant structure details. Officials are determining how to properly issue the equity stake.
A separate $120 million loan remains under consideration. The U.S. Export-Import Bank is reviewing financing for Tanbreez development.
The federal government shutdown has not affected negotiations. Deal participants qualify as essential government personnel.
Stock Performance
Critical Metals shares gained 17.5% year-to-date before Monday’s surge. The company’s market capitalization reached approximately $786.9 million at the last close.
The New York-based company focuses on lithium and rare earth supply. Target markets include the United States and Europe.
President Trump has repeatedly mentioned Greenland acquisition interest. He cites strategic location and mineral wealth as motivating factors.
The rare earth sector faces supply chain vulnerabilities. Most processing happens in China regardless of mining location.
Tanbreez development could take several years. The project remains in early stages despite government interest.
