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Trump Administration eyes stake in Greenland Rare Earths Mine Company

Four people with knowledge of the talks said that Trump administration officials had discussed taking a stake Critical Metals Corp. This would give Washington an interest in the biggest rare earths project on Greenland - the Arctic territory President Donald Trump suggested purchasing.

The deal, if finalized, would be the latest political twist in the Tanbreez rare-earths deposit. Former President Joe Biden successfully lobbyed for it to be sold to New York based Critical Metals at a much lower price than the Chinese firm offered.

Washington recently acquired stakes in Lithium American and MP Materials. This shows Trump's desire to see the U.S. benefit from the growing production of minerals that are used throughout the global economy.

Washington's interest to own a stake in Critical Metals has not been previously reported. Four sources declined to give their names, citing that the negotiations were sensitive.

In response to a comment request, a senior Trump Administration official said: "Hundreds of businesses are approaching us to try to get the government to invest in their crucial minerals projects." "At this point, there is nothing imminent with this company."

Critical Metals has not responded to multiple requests for comments via phone and email. Greenland is part of Denmark, but it has a semi-autonomous status. The Danish Embassy in Washington didn't immediately respond to an inquiry for comment.

Rare earths are used in high-tech industries, from electric cars to missile systems. They have strong magnetic properties. Western countries are clamoring for new supplies to reduce their dependency on China, which controls the extraction and processing of rare earths.

Critical Metals applied for a grant of $50 million through the Defense Production Act in June. The Defense Production Act is a Cold War legislation that aims to boost production of goods and services for national security.

Three sources confirmed that the administration began discussions with the company in the last six-weeks about converting the grant to an equity stake.

The same sources stated that if the deal is completed, a $50m conversion would represent a roughly 8.0% stake in the company. However, negotiations are still ongoing and the stake size could end up being higher, or the entire deal could fall through.

Reports in August stated that administration officials were considering reallocating $2 billion of the CHIPS Act for funding critical mineral projects. The CHIPS and Science Act was signed by President Joe Biden into law in 2022. Its goal is to divert chip production from Asia.

Two sources reported that the recent negotiations by the Administration for a 5% share in Lithium Americas delayed the Critical Metals Investment discussions.

Two sources stated that the U.S. shutdown will not affect negotiations because the high-level government employees involved in the talks are considered essential workers.

One source said that part of the discussion revolves around how warrants will be issued in order to give Washington its stake. Warrants allow their holders to purchase stock at a predetermined price.

According to two sources, the equity stake is separate from a $120,000,000 loan that the U.S. Export-Import Bank will consider to assist Tanbreez in developing its product. A spokesperson for EXIM was not available to comment immediately.

GREENLANDS APPEAL

Washington's economic interests in Greenland predated Trump's interest.

Biden officials visited Greenland’s capital Nuuk in November last year to try and entice additional private investment into the island’s mining sector. Trump sent JD Vance, Vice President of the United States, to Greenland in March. In northern Greenland, the U.S. Air Force has one of its largest bases.

Tanbreez's commercialization is estimated to cost $290 Million, according to the company.

The EXIM loan will be used to fund the technical work to get the mine up and running by 2026. The mine will produce 85,000 tons of rare earths per year once it is fully operational. Site also contains tantalum and gallium, both of which China restricted exports last year.

Greenland’s mining industry has grown slowly over the past few years due to a lack of investor interest, bureaucratic issues and environmental concerns. At the moment, there are only two small mining operations.

Tanbreez's remote and cold location is proving to be a challenge for its development, despite the fact that it is near a major river. (Reporting and writing by Jarrett Renshaw and Ernest Scheyder, and editing by Veronica Brown and Jason Neely; Edmund Klamann, Jason Neely, and Edmund Klamann.)

(source: Reuters)