Senior Trump administration officials have discussed taking a stake in Critical Metals Corp, four people close to 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 suggested buying.
If finalized, the deal would be another political turn for the Tanbreez rare earth deposit, which former President Joe Biden successfully pushed to be sold to New York-based Critical Metals for far less than what a Chinese firm was offering. Washington has recently taken stakes in Lithium Americas and MP Materials, underscoring Trump’s desire for the United States to benefit from the growing production of minerals used throughout the global economy.
Details of discussions about Washington’s interest in an equity stake in Critical Metals have not been previously reported. The four sources declined to give their names, citing the sensitivity of the negotiations.
“Hundreds of companies are approaching us trying to get the government to invest in their critical mineral projects,” a senior Trump administration official told Reuters in response to a request for comment. “There is absolutely nothing going on with this company right now.”
Critical Metals did not respond to repeated email and telephone requests for comment. 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, from electric vehicles to missile systems. Its importance is causing intense pressure for new supplies from Western countries, which seek to reduce their dependence on control almost total control that China exerts on its extraction and processing.
Critical Metals, which agreed to buy Greenland’s Tanbreez field last year for $5 million in cash and $211 million in stock, applied for a $50 million grant through the Defense Production Act in June. a Cold War-era law intended to boost the production of goods for national security purposes.
In the last six weeks, however, the Government has begun talks with the company to convert the subsidy into an equity stake, according to three of the sources.
If the deal goes through, a US$50 million conversion would mean an approximately 8% stake in the company, although the negotiations are not final and the final size of the stake could be larger or the agreement itself could not be finalized, the same three sources said.
Government representatives have considered reallocating $2 billion from the Chips Act to finance critical minerals projects, Reuters reported in August. The law, formally known as the CHIPS and Science Act, It was signed into law by then-President Joe Biden in 2022 and aims to attract chip production outside of Asia.
Discussions on the Critical Metals investment were delayed by the government’s negotiations in recent days for a 5% stake in Lithium Americas, two of the sources said.
The shutdown of the US Administration is not expected to affect the negotiations, given that the senior staff participating in the discussions are considered essential government workerssaid two of the sources.
Part of the discussion centers on how guarantees would be issued to give Washington a stake, one of the sources said. The warrants give their holders the right to buy shares at a certain price.
The participation in the capital would be independent of a loan of US$120 million that the U.S. Export-Import Bank is considering to help the company develop Tanbreez, according to two of the sources. An Exim spokesperson was not available for comment.
