The Trump administration plans to invest in a company developing rare earth mines in Greenland? White House officials deny it
The news that the Trump administration is considering investing in Greenland's rare earth project has caused fluctuations in the stock market, with Critical Metals Corp.'s stock price rising by as much as 109%. However, White House officials denied this consideration, leading to a rapid decline in the stock price. Other rare earth-related companies showed mixed stock performance, with Ucore Rare Metals rising by over 10%, while USAR initially fell by more than 3% before turning positive. The Trump administration had discussed converting $50 million in defense appropriations into equity investment in Critical Metals, which, if the deal is reached, would account for about 8% of the company's shares
Last Friday, reports indicated that the Trump administration was considering acquiring a stake in Critical Metals Corp., the company developing Greenland's largest rare earth project. On Monday, White House officials denied that the Trump administration had such considerations.
After the news of the denial from White House officials on Monday, October 6, the stock price of Critical Metals (CRML), which had surged by as much as 109% in early trading, quickly narrowed its gains, with intraday increases dropping to less than 15%. Due to significant price fluctuations, trading was temporarily halted, but it rose over 40% shortly after the lunch break. Analysts commented that the news of the Trump administration's consideration of a stake, combined with Critical Metals announcing new institutional investors, jointly propelled the company's stock price to skyrocket on Monday.
Other rare earth-related companies showed mixed stock performance. Ucore Rare Metals (UURAF) maintained an intraday gain of over 10%, NioCorp Development (NB) rose over 6% during the day, and Energy Fuels (UUUU) increased by over 3%. Mp Materials (MP) and USA Rare Earth (USAR) briefly turned negative. USAR's decline exceeded 3%, but it quickly turned positive again.
Trump administration reportedly considers direct involvement in Greenland's largest rare earth project; White House officials clarify
According to media reports last Friday, insiders stated that Trump administration officials had discussed acquiring a stake in Critical Metals, which would allow the U.S. government to directly participate in Greenland's largest rare earth project.
Reports indicated that over the past six weeks, the government began discussions with the company about converting a $50 million Defense Production Act grant into an equity investment. If the deal is finalized, the $50 million conversion would represent about 8% of the company's shares, although negotiations have not yet been finalized.
Critical Metals agreed last year to acquire the Greenland Tanbreez deposit for $5 million in cash and $211 million in stock. The company applied for a $50 million grant through the Defense Production Act in June of this year.
According to Xinhua News Agency, U.S. President Trump stated on March 20 that he had signed an executive order aimed at enhancing domestic production capacity for critical minerals and rare earths. The order reportedly allows the use of the U.S. Defense Production Act to provide funding, loans, and other investment support to enhance domestic critical mineral production capacity.
On Monday, other media reported that a White House official explicitly stated that the Trump administration is not currently considering a deal to acquire shares in Critical Metals. The official noted that the government maintains ongoing contact with the private sector and has received hundreds of proposals involving equity investments, but is not actively considering an agreement with Critical Metals Critical Metals did not immediately respond to the request for comment.
Trump Administration's Equity Investment Strategy
In recent months, the Trump administration has announced several transactions to invest in private enterprises, allowing relevant companies to exchange equity for government loans and subsidies.
In June, when approving Nippon Steel's acquisition of U.S. Steel, the U.S. government obtained what is known as a "Golden Share," granting the government veto power over key decisions. In July, the U.S. Department of Defense announced a $400 million acquisition of preferred shares in domestic rare earth producer MP Materials Corp., becoming the largest shareholder with approximately 15% ownership.
In August, President Trump announced that his administration acquired approximately $11 billion worth of Intel shares without spending a dime. Intel confirmed on the same day that, through funding and contributions from the CHIPS Act, the U.S. government would invest a total of $11 billion to acquire about 10% of Intel shares. In addition to the $2.2 billion already received from the CHIPS Act, the government will also make an $8.9 billion equity investment in Intel.
Last Tuesday, the U.S. Secretary of Energy confirmed that the U.S. government would acquire a 5% stake in Lithium Americas Corp. and hold a 5% stake in its Thacker Pass lithium mine project in Nevada.
White House Press Secretary Levitt stated last week that the efforts to hold shares in MP Materials and others are "the President's creative solution to the national debt crisis."
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