A push by Brussels to stockpile critical minerals has thrown a spotlight on European Lithium’s all-stock combination with Nasdaq-listed Critical Metals Corp, a $835 million transaction that ties together Austrian lithium and Greenland rare earths. The Australian Securities Exchange halted trading in European Lithium shares on Wednesday as the companies prepared to unveil a binding merger agreement, signed on May 18 and designed to give Critical Metals full control of the Tanbreez rare-earth project.
The deal is structured as two interdependent schemes of arrangement under Australian law. European Lithium shareholders will receive 0.035 Critical Metals shares for each of their own, a ratio that values the target at roughly A$0.58 per share — well above the last ASX close of A$0.415 before the halt. That gap suggests the market had already priced in some scepticism about the transaction’s timing and approvals.
Operational hurdles remain on both sides of the Atlantic. In Austria, the Federal Administrative Court overturned a key environmental permit for European Lithium’s flagship lithium project, pushing a final investment decision back to at least the end of 2026. The offtake contract with BMW is unaffected, however, and the company said the permit will now undergo a stricter individual review. The Austrian setback contrasts with progress in Greenland, where the Tanbreez pilot plant for heavy rare earths is complete. Metallurgical tests have pushed concentrate grades to nearly 3%, and the US Export-Import Bank has signalled interest in providing project financing in the hundreds of millions of dollars.
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Political momentum is building in Europe as well. On May 20, the European Union earmarked tungsten, rare earths and gallium for its first joint strategic raw materials stockpile, with talks already underway with the port of Rotterdam over storage capacity. The move aligns directly with Critical Metals’ rationale for acquiring Tanbreez: the project contains terbium and other heavy rare earths essential for electric motors, and full ownership would simplify decision-making and accelerate development.
Financial firepower has been shored up in the lead-up to the merger. European Lithium held around $219 million in cash as of March 31, 2026, and subsequently raised an additional A$45 million by selling a share parcel to Critical Metals, boosting total reserves to roughly A$356 million — comfortably above the minimum cash condition in the merger agreement. Critical Metals itself closed a private placement with institutional investors in April, aiming to raise about $60 million for operations and Tanbreez development. Despite the strategic logic, Critical Metals shares slipped almost 7% to $9.80 on May 19, reflecting some investor caution.
The transaction is expected to close in the second half of 2026, with European Lithium shareholders voting at a general meeting in the third quarter. An independent committee has been formed to review the deal on behalf of minority holders, and the Australian corporate watchdog has opened a formal investigation into possible breaches of continuous disclosure obligations. Adding to the complexity, Tony Sage serves as both executive chairman of European Lithium and chief executive of Critical Metals. The company has also launched a buyback programme for up to 10% of its capital, arguing that its assets are undervalued. All eyes now rest on the final merger details — and on whether Europe’s new appetite for homegrown raw materials can overcome the permitting bottlenecks that have long stalled the continent’s mining ambitions.
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