Why Critical Metals Corp Stock Fell 11.3% Today
Key Points
The U.S. government took a 10% stake in Texas-based USA Rare Earth in a $1.6 billion deal.
The domestic investment deflated speculation that Critical Metals would receive similar federal backing.
Critical Metals' Greenland project remains years from commercialization.
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Shares of Critical Metals Corp (NASDAQ: CRML) fell on Monday, finishing the day down 11.3%. The drop came as the S&P 500 gained 0.5% and the Nasdaq Composite gained 0.4%.
The U.S. government has taken a 10% stake in the mining company USA Rare Earth, leading to a dip in many mining stocks like Critical Metals Corp, which had been driven higher by investors hoping for a similar investment from the federal government.
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That narrative has been especially strong for Critical Metals due to its Tanbreez project in Greenland, the massive territory that President Trump has said he wants under U.S. control.
The Trump administration picks USA Rare Earth
While a future deal could still be on the table, the Trump administration appears more interested in shoring up domestic access. The $1.6 billion deal with USA Rare Earth, whose mine is located in Texas, helps "ensure our supply chains are resilient and no longer reliant on foreign nations," as U.S. Commerce Secretary Howard Lutnick put it.
Image source: Getty Images.
There's a long road ahead for Critical Metals Corp
Critical Metals stock is an interesting speculative pick for investors with a high risk tolerance, but the road to commercializing the massive Tanbreez project remains long, and the stock will remain highly volatile and reactive to news stories like this one.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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