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By Melanie Burton and Ernest Scheyder
MELBOURNE/HOUSTON (Reuters) - U.S. and Danish officials lobbied the developer of Greenland's largest rare earths deposit last year not to sell its project to Chinese-linked firms, its CEO told Reuters, adding it has been in regular talks with Washington as it reviews funding options to develop the island's critical minerals.
The move underscores the long-running economic interest U.S. officials have had in the Danish territory, well before U.S. President-elect Donald Trump began musing in recent weeks about acquiring it.
Rare earths have strong magnetic properties that make them critical to high-tech industries ranging from electric vehicles to missile systems. Their necessity has given rise to intense competition between Chinese and Western interests to ease China's near-total control of their extraction and processing.
Greg Barnes, CEO of privately held Tanbreez Mining, said U.S. officials who visited the project in southern Greenland twice last year had repeatedly shared a message with the cash-strapped company: do not sell the large deposit to a Beijing-linked buyer.
The U.S. State Department was not immediately available to comment. The White House did not respond to a request for comment. The Danish Foreign Ministry declined to comment.
Barnes ultimately sold Tanbreez to New York-based Critical Metals as part of a complex deal that will be complete later this year. Tanbreez aims to mine 500,000 metric tons annually of the crimson rare earths-containing mineral eudialyte as soon as 2026.
"There was a lot of pressure not to sell to China," Tony Sage, CEO of Critical Metals, told Reuters. Barnes accepted payment of $5 million cash and $211 million in Critical Metals stock for Tanbreez, far less than Chinese firms offered, Sage said.
Barnes said offers from Chinese and other parties were not relevant because they had not clearly outlined how they could pay.
Neither executive disclosed which officials they met with or identified the Chinese companies that made offers.
U.S. interests appear to be changing the game for rare earths projects that had previously not been seen as attractive investments, analysts said.
"While the size of the Tanbreez is significant, the grade and the mineralogy are nothing to be shouted about," said David Merriman, research director at minerals consultancy Project Blue, which considers the chance of the project reaching commercial production as low, given its complex mineralogy.
The Tanbreez sale to Critical Metals shows that U.S. officials have had more success in Greenland than they have in Africa, where they have been working to offset China's grip on the mineral-rich central African copper belt.