Critical Metals in line for $120M US loan to fund Greenland rare earth project

Critical Metals Corp. (NASDAQ: CRML) has been tapped by the US Export-Import Bank (EXIM) for a loan worth up to $120 million to fund the company’s Tanbreez rare earth project in southern Greenland, as first reported by Reuters.The Tanbreez project — situated on a 4.7-billion-tonne mineralized kakortokite unit that has been largely unexplored — represents one of the world’s largest rare earth deposits.In a letter issued last week by EXIM and seen by Reuters, the New York-based Critical Metals has met the initial requirements to apply for the $120 million loan, which would have a 15-year repayment term.The project would have to be “well-capitalized with sufficient equity from strategic investors” to receive the loan, EXIM stated in the letter of interest.2026 productionAccording to Reuters, the EXIM funds — representing nearly half of the project’s estimated cost of $290 million — would be used for technical work ahead of first production by 2026.Once operational, the Tanbreez mine is initially expected to produce 85,000 tonnes of rare earth concentrates per year, then scaled up to 425,000 tonnes following a modular expansion. Its mining licence is valid until 2050.The production forecast is based on an estimated resource of 45 million tonnes, or just 1% of the host rock. According to company estimates, the Tanbreez resource has one of the largest heavy rare earth contents (Dy, Tb, Y) globally over 27%.Earlier this year, Critical Metals released an economic assessment for the Tanbreez project, showing a net present value of approximately $3 billion (approximately $2.8 billion to $3.6 billion at discount rates of 15% and 12.5%, respectively, before tax) and an internal rate of return (IRR) of 180%.Critical Metals, GreenMet partner to develop Tanbreez rare earth project in GreenlandAs part of its efforts to de-risk the asset ahead of production, the company is in the process of completing a definitive feasibility study for Tanbreez, which would include more details such as project timelines. The study is expected by the end of 2025.Critical Metals also said it expects to invest another $10 million in exploration this year, so that it would trigger the option to acquire an additional 50.5% of the asset, bringing its total ownership to 92.5%.Battle for rare earthsEXIM, acting as the US government’s export credit agency, said in the letter that CRML qualifies for its loan program since its business competes with China.Rare earths — a group of 17 minerals used in high-tech industries ranging from electric vehicles to defense systems — have become a focal point in the recent Sino-American trade clash, given Beijing’s leverage as the leading producer and exporter to Washington.China currently controls roughly 60% of rare earth production and nearly all of the processing capacity worldwide. As of 2023, its total mine production was 240,000 tonnes, nearly six times that of the US. Between 2020 and 2023, China accounted for about 70% of America’s rare earth imports. This heavy reliance on Chinese supply — which Beijing managed to weaponize in trade policy — sparked a global hunt for new rare earth mines. As of now, the US only has one active rare earth mine — the Mountain Pass in California owned by MP Materials (NYSE: MP).US-China trade truce leaves military-use rare earth issue unresolved“This is a tremendous milestone for Critical Metals Corp., which highlights to the rare earths supply chain, Western governments and investors that Tanbreez is a world-class asset that will provide mission-critical rare earth metals to counter China’s continued dominance,” Critical Metals CEO Tony Sage said in a press release Monday.Shares of Critical Metals soared on the news, trading 21.4% higher at $2.46 per share by 10:25 a.m. in New York, for a market capitalization of $225.8 million.Interest in GreenlandShould the EXIM loan be approved, Tanbreez would become the first overseas mining project to receive US government funding under the Trump administration.The letter underscores US interest in Greenland’s vast endowment of resources and critical minerals dating back to the Biden administration. It was reported that US officials visited Nuuk as recently as last November as part of ongoing efforts to get private investment in the island’s mineral sector. According to Reuters, US officials had lobbied Tanbreez’s then-owner not to sell to a Chinese developer and instead sell to Critical Metals.President Donald Trump also made no secret of his desire to “own” the Danish territory. Earlier this year, Vice President JD Vance made a quick trip to Greenland to make Trump’s pitch.Despite growing interest, Greenland’s mining sector has seen little progress in recent years due to limited investor interest, bureaucratic challenges and environmental concerns. Currently, there are only two small mines in operation.As for Critical Metals, the company would still have to build a processing facility, and its representatives said their goal is to process the material inside the US. The company had previously applied for funding to develop a processing facility from the US Department of Defense, but the review process stalled ahead of Trump’s inauguration.For the EXIM loan’s additional funding requirements, Critical Metals told Reuters it is considering offtake agreements, royalty streams and funding from other US governmental agencies.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com