U.S. in Talks to Secure Critical Metals Stake as Rare Earth Tensions Rise

Critical Metals Corp. (NASDAQ: CRML) shares surged 27.4% in premarket trading on October 6, 2025, driven by a 10-year off-take agreement with REalloys Inc. for 15% of rare earth concentrate from its Tanbreez Project in Greenland, according to a Blockonomi report. The project, one of the world's largest heavy rare earth deposits, now has long-term demand visibility, bolstering investor confidence. Concurrently, U.S. rare earth stocks like MP Materials (MP) and USA Rare Earth (USAR) also saw gains amid escalating trade tensions over China's rare earth export controls.

China, which controls nearly 70% of global rare earth mining and processes 90% of these materials, intensified export restrictions in late September 2025, prompting President Donald Trump to threaten 100% tariffs on Chinese imports starting November 1. While Trump later softened his stance, the geopolitical tension underscored the strategic importance of diversifying supply chains. Critical Metals' Tanbreez Project, with 22.56 million metric tons of rare earth resources and 26-27% heavy rare earth oxide (HREO) content, is positioned as a critical asset for U.S. and European supply chains, according to a Yahoo Finance report.

Recent drilling results from the Tanbreez Project highlighted exceptional grades of total rare earth oxides (TREO) ranging from 0.32% to 0.89%, with gallium oxide concentrations of 80-140 ppm, according to a StockTitan article. These findings, coupled with China's ban on gallium exports to the U.S., amplify the project's strategic value for defense and technology applications. The 2024-2025 drilling program has already completed 1,500 meters of exploration, with further assays expected to expand resource estimates, the Yahoo Finance report added.

JPMorgan Chase added momentum to the sector by announcing up to $10 billion in direct equity investments targeting critical minerals and frontier technologies, citing national security concerns, as previously reported. CEO Jamie Dimon emphasized reducing U.S. dependence on "unreliable sources" of critical minerals, aligning with broader efforts to strengthen domestic supply chains. This initiative follows the Department of Defense's $400 million equity investment in MP Materials, signaling coordinated policy action.

Amid the trade war escalation, reports surfaced that the U.S. government is in preliminary talks to acquire an 8% equity stake in Critical Metals, potentially providing Washington with direct access to the Tanbreez Project, according to an Invezz report. European Lithium, which holds a 60% stake in Critical Metals, saw its shares jump over 127% following the news, the report said. The U.S. has previously invested in lithium and rare earth ventures, including Lithium Americas and MP Materials, to reduce reliance on Chinese materials.

China's recent export controls, including the application of a U.S.-style "Foreign Direct Product Rule" to rare earths and magnets, have disrupted global supply chains, a point made in a CNBC op-ed. The measures restrict foreign firms from exporting rare earth magnets containing Chinese-sourced materials or produced with Chinese technology without approval. These actions, coupled with restrictions on technology exports and skilled labor, reflect Beijing's strategic use of legal and regulatory tools to assert economic leverage.

Critical Metals' stock, which closed up over 55% on October 5, 2025, continues to attract attention as part of broader U.S. efforts to secure critical minerals. The company's Wolfsberg Lithium Project in Austria and Greenland-based Tanbreez Project position it as a key player in the clean energy and defense sectors, the Yahoo Finance report noted. Analysts observe that the project's high HREO content and gallium concentrations offer a dual economic advantage, particularly as demand for advanced technologies grows, the StockTitan article added.