(Reuters) - U.S.-based miner Critical Metals has signed a letter of intent to purchase all outstanding shares of European Lithium in an about $835 million deal, a move that would secure its full ownership of Greenland's Tanbreez rare earth project.
Shares of Critical Metals, which currently holds a 92.5% interest in one of the world's largest known rare earth deposits, jumped more than 6% after the announcement on Monday. Mining and development company European Lithium owns the remaining 7.5% in the project.
The Tanbreez project is seen as a critical alternative source of heavy rare earths, used in electric vehicles, medical equipment, oil refining, wind turbines and defense, as Western nations work to reduce their reliance on China for these vital resources.
Critical Metals said the complete ownership of Tanbreez would simplify decision-making and financing strategy for the project as it advances toward a development decision.
Late last year, Reuters reported that the Trump administration had discussed taking a stake in Critical Metals, which would give Washington a direct interest in the Tanbreez project.
Critical Metals, spun out of European Lithium by combining its flagship Wolfsberg project in Austria with a special purpose acquisition corporation, dubbed Sizzle, commenced trading in 2024.
Under the latest deal, expected to be completed in the second half of this year, European Lithium shareholders would receive 0.035 shares of Critical Metals for each held.
The two companies also share senior leadership. Critical Metals CEO Tony Sage serves as an executive chairman of European Lithium, while Dietrich Wanke, the top boss of the Australia-listed company, is the president of Critical Metals' European operations.
Reporting by Pooja Menon in Bengaluru; Editing by Shilpi Majumdar
Source: Reuters