This Rare Earth Stock Just Took Control of a Massive Greenland Deposit. Is It a Buy?

Critical minerals and rare-earth elements have come into focus, and for good reason. These elements are vital for industries such as national security and defense, semiconductors, and renewable energy. Not only that, but according to research from The Motley Fool, China accounts for roughly 70% of rare-earth extraction and 90% of rare-earth element processing.

In recent years, China has imposed export restrictions on certain materials, prompting many Western countries to seek domestic sources. Critical Metals (NASDAQ: CRML) is one company looking to help these countries secure rare-earth elements, and recently took control of the Tanbreez project in Greenland to make this a reality.

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Critical Metals has gained control of the resource-rich Tanbreez Project

Critical Metals is an early stage mining company developing the Tanbreez Project in Greenland. What makes this site compelling is that it contains all eight essential heavy rare-earth elements (HREEs), including dysprosium and terbium, which are used for defense and renewable energy applications. Unlike many rare-earth projects located inland, Tanbreez is near deep-water fjords, providing year-round shipping access to the North Atlantic.

This month, the government of Greenland agreed to transfer the remaining 50.5% ownership stake in the Tanbreez project to Critical Metals, giving the company a 92.5% stake. Critical Metals Chairman Tony Sage said that "this is a game-changing moment for Critical Metals" and that it "removes the significant structural overhang on the project."

In March, independent testing confirmed a refined concentrate grade of 2.96% Total Rare Earth Oxides (TREO). This high-grade concentration matters because it translates into lower processing costs, making the project significantly more profitable.

What's next for Critical Metals?

In March, Critical Metals' board approved $30 million to fast-track drilling, engineering, and infrastructure, targeting a massive resource expansion from 45 million tonnes (Mt) to approximately 130Mt.

The development of this project comes as U.S. President Donald Trump announced plans for "Project Vault," a $12 billion strategic critical minerals stockpile that will combine $2 billion in private capital with $10 billion in Export-Import (EXIM) Bank loans. As part of this, Critical Metals has secured a $120 million Letter of Intent from the U.S. EXIM Bank to support the development and financing of Tanbreez.

Next up, Critical Metals will deploy fully autonomous communications towers and drone systems at the site to enhance operational monitoring. For the rest of this year, the company will conduct integrated field programs involving 6,000 meters of drilling and bulk sampling for feedstock.

Next year, it will complete an updated Preliminary Economic Assessment (PEA) and advance toward final engineering designs. It targets first ore production in late 2028 or early 2029.

This early-stage miner has its work cut out for it

Critical Metals is positioning itself to be a key provider of critical minerals and rare-earth to Western nations, helping reduce reliance on China's supply chains. With the company now owning a majority stake in Tanbreez, the project has moved from an exploratory phase into direct development.

That said, it will take time and capital to develop the Tanbreez project. For that reason, I think investors will want to avoid buying Critical Metals stock right now and instead should keep it on a watch list to see how the project unfolds in the coming years.

Courtney Carlsen 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.