Rare Earth Exchanges

Critical Metals Corp Confirms High-Grade Rare Earth Materials in Greenland While China’s Specter of More Embargos Spook Markets

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Highlights

  • Critical Metals Corp announces promising drill results at Tanbreez Project in Greenland, revealing high-grade rare earth elements.
  • The project aims to reduce Western dependency on Chinese rare earth mineral exports amid escalating global trade tensions.
  • Strategic mineral discovery positions the company as a potential key resource for clean energy and defense industries.

Critical Metals Corp (opens in a new tab) (Nasdaq: CRML), a leading mining development company, announced promising results from its first drill hole at the Tanbreez Project, (opens in a new tab) a major rare earth deposit in southern Greenland. The company confirmed the presence of high-grade rare earth elements and other critical minerals, such as Gallium and heavy rare earth oxides, essential for clean energy and defense applications. CEO Tony Sage (opens in a new tab) highlighted the project’s strategic importance amid China’s recent restrictions on rare earth exports. The drill results demonstrated high concentrations of heavy rare earth elements and critical compounds, positioning the Tanbreez Project as a key resource for Western nations seeking to reduce dependency on Chinese-controlled supply chains. The company emphasized its role in advancing electrification and supporting global defense industries.

Key Message

The Tanbreez Project contains high-grade rare earth materials critical for electrification, clean energy, and defense applications, offering Western nations a viable alternative to Chinese-dominated supply chains.

The rare earth materials are located at the Tanbreez Project in southern Greenland.

Rare Earth Exchanges Review

The press release was authored in such a way as to position the deposit as part of a strategic positioning against China. The release assumes that reducing dependence on China for rare earths is both necessary and achievable through the Tanbreez Project. Or at least that this new source, once exploited, could diversify the rare earth mineral sources.  The piece frames China’s export restrictions as a pressing geopolitical challenge, which it likely will be. The article does not look at what the incoming POTUS is considering in the form of tariffs.

The company assumes that the high-grade materials at Tanbreez will make a significant impact on global markets without addressing logistical or competitive challenges.  Additionally, they emphasize potential and strategic importance without detailing the risks or timelines for commercial production.  Again, China’s main dominance comes from the processing of the critical minerals, not in the underlying sourcing of the inputs.

Investors will obviously need further information.  For example, what is the production timeline? No details on when the project will begin full-scale production or the costs involved.  As far as market readiness is concerned, there is limited information on how quickly resources can be integrated into Western supply chains.  And, of course, environmental costs can be dear with rare earth mining operations.  The piece offers no mention of environmental considerations or regulations affecting mining operations in Greenland.

Finally, as global competition will increasingly rule the day, how would the Tanbreez Project compare to other rare earth projects globally?

Overall, the press release underscores the strategic potential of the Tanbreez Project while leaving critical operational and environmental questions unanswered.

China Spooking Western Markets

But China’s moves to block exports of select minerals have spooked global markets, with Critical Metals Corp obviously playing on that dynamic.

As the New York Times reported (opens in a new tab) today, multinationals are increasingly troubled by further actions by China.   The trade embargo (opens in a new tab) on the export of four critical minerals to the United States raises concern that the provision extends the ban to companies in other countries that transfer minerals to American firms after acquiring them from China, reports Keith Bradsher.  As the Times reporter calls out:

“The order is the first time China has included a broad ban on so-called transshipment in a government regulation on exports. It also underlines Beijing’s readiness to escalate its tit-for-tat response to the tougher trade policies promised by President-elect Donald J. Trump.”

While China condemns the same action in their direction, there is growing fear among companies across key verticals in the West that the rare earth value chain could be further disrupted by moves in Beijing. More impediments could disrupt and fracture supply chains, compelling companies to slice and dice product lines by various mineral restrictions.  

Speaking with a consultant about the condition of anonymity, Rare Earth Exchanges learned of a growing fear of what could happen next. Major industries, from automobiles (all automobiles) to consumer electronics to green technologies to the massive defense enterprise of the West, are completely dependent on these inputs, overwhelmingly processed in China.

A possible wild card in all this: Elon Musk and how we will have an impact on Trump. Obviously, Musk has incentives to open the rare earth complex in China and be bidirectional in trade, commerce, and the ensuing flow of capital.

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