Critical Metals shares soar after Reuters report says Washington eyeing stake

By Vallari Srivastava

(Reuters) -Shares of Critical Metals surged over 62% on Monday after Reuters reported the U.S. government was in talks to buy a stake in the miner, the latest in Washington's deal-making push to secure the supply of rare earths.

A deal, if successful, would give the U.S. government a direct interest in the largest rare earths project in Greenland, a strategically important and mineral-rich Arctic territory that President Donald Trump has previously suggested the U.S. should take over.

"A U.S. stake in (Tanbreez) would mark a significant step toward building a diversified 'mine-to-magnet' supply chain independent of China," said Neha Mukherjee, a research manager at Benchmark Mineral Intelligence.

Washington has been pushing to secure critical minerals and reduce reliance on China, taking stakes in producers such as Lithium Americas and MP Materials.

The government is not just backing domestic projects, it is also targeting overseas assets in resource-rich but underdeveloped regions, Mukherjee said.

"It also signals that we could see more such deals emerge, particularly in early-stage projects with significant resource potential."

Critical Metals had acquired Greenland's Tanbreez rare earth deposit last year for $5 million in cash and $211 million in stock.

The company applied earlier this year for a $50 million Defense Production Act grant, which Washington has since discussed converting into an equity stake, the Reuters report said, citing four sources.

If finalized, that conversion would equal roughly an 8% stake, though talks remain preliminary, the sources said.

Separately, Critical Metals said it agreed to raise $35 million from an unnamed institutional investor to fund Tanbreez's development.

Shares have gained more than 91% this year, including Monday's gains.

As of last close, the company was valued at $787 million.

On Monday, the firm also said it has restated financial statements for the six months ended December 31, 2024, and 2023, cautioning investors not to rely on the earlier reports.

(Reporting by Vallari Srivastava in Bengaluru; Editing by Tasim Zahid and Leroy Leo)

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