The White House on Monday dismissed market speculation that the U.S. government was considering taking an equity stake in Critical Metals Corp. (NASDAQ: CRML), triggering volatile trading in the company’s shares. After surging more than 100% during early trading to an all-time high of $16.88—compared with Friday’s close of $8.14—the stock retreated to $11.70 following the official denial, leaving the company with a market capitalization of $1.1 billion.
The rally had been fueled by a Reuters exclusive published Friday, which reported that Washington was in preliminary talks over an equity investment in the New York-based miner. According to the report, a proposed deal would have converted an existing $50 million federal grant into an approximate 8% ownership stake for the U.S. government.
The reported interest in Critical Metals would have marked the U.S. government’s third recent strategic investment in the critical minerals sector. Last month, it acquired a 5% stake in Lithium Americas (NYSE: LAC), whose Nevada project is set to become the largest source of battery-grade lithium in the Western Hemisphere. Two months earlier, the Department of Defense invested about $400 million for a 15% share in MP Materials (NASDAQ: MP), operator of the country’s only active rare earth mine at Mountain Pass, California.
Market attention has zeroed in on Critical Metals’ Tanbreez project in southern Greenland, widely regarded as one of the world’s largest undeveloped rare earth deposits. Mining Intelligence ranks Tanbreez as the globe’s top rare earth project, with total rare earth oxide (TREO) resources estimated at 28.2 million tonnes. Geological data indicate the deposit hosts at least 45 million tonnes of rare earth resources, contained within a massive and still underexplored rock formation.
Despite a global rush to discover new rare earth supplies, developers face significant technical and economic challenges. Extracting these minerals from hard rock is notoriously difficult, and processing remains costly—making large-scale, geopolitically accessible projects like Tanbreez particularly strategic.
A source familiar with the matter said Critical Metals is just one of “hundreds of companies” in the sector that have approached the U.S. government for funding. As demand for rare earths—essential for electric vehicles, wind turbines, and defense systems—continues to climb, Washington has been leveraging policy tools such as the Defense Production Act to secure its critical mineral supply chains.
Currently, the U.S. relies heavily on imports, with only the Mountain Pass mine in commercial production. Canada, too, has just one producing rare earth mine, leaving North America scrambling to diversify its sources.
Wall Street analysts caution that while the White House has denied the equity talks for now, Tanbreez’s strategic importance remains intact. Recent share price movements, they note, largely reflect short-term speculative trading. The project’s true commercial potential will depend on further exploration results and permitting progress.
As the global energy transition accelerates, geostrategic competition over critical mineral resources is expected to continue influencing both policy and capital markets.
