Shares of Critical Metals Corp (NASDAQ: CRML) soared more than 75% in premarket trading on October 6, 2025, after news broke that the U.S. government is in discussions to take an equity stake in the New York-based mining company. According to an exclusive report by Reuters, the potential deal would give Washington a direct interest in Greenland’s Tanbreez project, one of the world’s largest and most strategically significant rare earth deposits.
This sudden surge in Critical Metals’ stock—at one point more than doubling from around $8 to nearly $17—was fueled by speculation that the U.S. might convert a proposed $50 million Defense Production Act grant into roughly an 8% ownership stake in the company. Investors piled in, briefly pushing the company’s market value above $1.1 billion, before the stock settled around $11–$12 as White House officials cautioned that “nothing is close with this company at this time.” The official, speaking to Reuters, added, “Hundreds of companies are approaching us trying to get the administration to invest in their critical minerals projects.”
The Tanbreez deposit, located near Narsaq in southern Greenland, is often described as a world-class resource. With an estimated 45 million tonnes of rare-earth-rich ore, including high-value heavy rare earth elements (HREEs) like dysprosium and terbium, the project is seen as a potential game-changer for Western supply chains. The deposit’s heavy rare earth content—about 27%—sets it apart from many global competitors, as these elements are critical for high-tech applications such as electric vehicle motors, wind turbines, and missile guidance systems.
The U.S. government’s interest in Tanbreez is part of a broader push to secure supplies of critical minerals outside of China’s control. China currently processes nearly 90% of the world’s rare earths, and recent export controls on minerals like gallium and germanium have only heightened Western concerns about supply chain vulnerabilities. Over the past two years, the U.S. has taken stakes in other mining ventures, including Lithium Americas in Nevada and MP Materials, the only rare earth mine currently operating in the United States.
The geopolitical tug-of-war over Tanbreez has been years in the making. In 2024, then-President Joe Biden successfully lobbied to block a Chinese firm’s higher bid for the deposit, ensuring it was sold to Critical Metals for $5 million in cash and $211 million in stock—a price significantly lower than what the Chinese bidder reportedly offered. President Donald Trump has also shown keen interest in Greenland’s resources, famously musing about buying the island outright in 2019 due to its mineral wealth and strategic location.
Critical Metals’ ambitions go beyond the U.S. market. The company aims to supply both U.S. and European customers, and its flagship project has attracted attention from allies as well. The UK and EU have entered talks with Greenland on a critical minerals pact, reflecting a wider Western effort to secure Arctic mineral supplies and reduce reliance on Chinese-dominated supply chains.
Amid the market excitement, Critical Metals announced it had secured $35 million from an unnamed institutional investor to advance Tanbreez’s development. In late September 2025, the company also amended its agreement to boost its ownership of the project from 42% to 92.5%, issuing shares to Tanbreez’s founder, geologist Gregory Barnes, while Australia’s European Lithium retained a 7.5% stake. Barnes, who discovered Tanbreez, agreed to the deal after U.S. officials intervened to keep the deposit in Western hands. He called Tanbreez “a game-changer for the rare earths supply chain in the West.”
The U.S. Export-Import Bank is considering a separate $120 million loan to help finance Tanbreez’s development, and administration officials have reportedly discussed reallocating $2 billion from the CHIPS and Science Act—signed into law by President Biden in 2022—to fund critical minerals projects. The CHIPS Act was originally designed to strengthen the U.S. semiconductor industry and reduce reliance on Asian manufacturing hubs, but the growing importance of minerals like those found at Tanbreez has prompted calls for broader support.
For its part, Critical Metals has been careful not to comment directly on the potential government stake. Executive Chairman Tony Sage emphasized the strategic importance of the Tanbreez project, stating, “Tanbreez is a strategically important asset for Western supply chains.” In August, the company inked a 10-year offtake agreement to supply rare earth concentrate from Tanbreez to a U.S.-based separation plant, further integrating the project into American supply chain plans.
Developing Tanbreez is no small feat. The site is remote, set in a harsh Arctic environment, but it benefits from proximity to a deepwater fjord, allowing year-round shipping access for exporting concentrate. Critical Metals estimates it will cost about $290 million to build the initial mine and processing facilities, with first production targeted for 2026. Once operational, Tanbreez is expected to produce around 85,000 tonnes of rare earth concentrate annually in its initial phase, with plans to ramp up to over 400,000 tonnes per year in later expansions. For context, total global rare earth oxide output is currently estimated at 250,000–300,000 tonnes per year.
Of course, Greenland’s authorities and local stakeholders will have a decisive say in Tanbreez’s fate. The autonomous territory of Denmark has been cautious with mining approvals, balancing economic development with environmental and Indigenous rights. Only two small mines currently operate in Greenland, and the Tanbreez project still requires final permits and agreements with the Greenlandic government. Recent months have seen Greenland’s leadership signal openness to closer cooperation with Western nations, as the island seeks to leverage its mineral wealth for new trade deals.
The U.S. government’s possible equity stake in Critical Metals would mark a significant policy shift—direct financial participation in a development-stage mining company. This approach, which has already been used with Lithium Americas and MP Materials, is part of a larger strategy to build a “mine-to-magnet” supply chain independent of China, encompassing extraction, processing, and manufacturing of critical components. Neha Mukherjee, a research manager at Benchmark Mineral Intelligence, observed, “A U.S. stake in Tanbreez would mark a significant step toward building a diversified ‘mine-to-magnet’ supply chain independent of China.”
Yet, the story is far from over. The White House’s clarification that no deal is imminent has tempered market enthusiasm, but the strategic value of Tanbreez and Critical Metals remains clear. As the global race for critical minerals intensifies, Greenland—a place once considered a geopolitical curiosity—has become a key battleground in the competition for resources that underpin the technologies of the future.
Whether or not the U.S. government ultimately takes a stake in Critical Metals, the company’s rise underscores the growing importance of rare earths, the shifting dynamics of global supply chains, and the complex interplay of business, politics, and national security in the 21st century.
