Why Critical Minerals Corp. Rallied Today on a Tough Day for the Markets

Shares of rare-earth and lithium miner Critical Minerals Corporation (NASDAQ: CRML) rallied 12.4% on Tuesday as of 2:05 p.m. EDT. The move was all the more impressive as the broader market indexes were largely down severely.

Critical Minerals was up and to the right along with other mining stocks today, after the Trump Administration's Department of the Interior disclosed that it would expand the focus of "Project Vault," which aims to stockpile critical materials.

Critical Minerals is a Greenland-focused rare-earth company

Critical Minerals Corp. is a subsidiary of European Lithium Limited. It has significant interests in the Wolfsberg Lithium Project in Southwest Austria and the Tanbreez Project, a rare-earth mining project in Greenland.

That's why the stock benefited when the White House disclosed "Project Vault" yesterday, while elaborating on the new initiative today. Under Project Vault, the Department of the Interior will expand its stockpiles set aside for national defense to include more quantities and a greater variety of critical materials for American businesses in case of shortages.

The list of over 50 critical minerals includes both rare-earth and lithium. And while Critical Minerals Corp. is incorporated in the British Virgin Islands and a subsidiary of a European company, the U.S. could very well buy some of its output when its projects come to fruition. At the very least, having the U.S. government purchase incremental amounts of these metals will increase overall demand and help buoy global metals prices.

Image source: Getty Images.

Critical Materials is highly speculative

Of note, Critical Materials Corporation is still pre-revenue, with its mining projects projected to start up in 2028. As such, this is a highly speculative name that tends to trade on news related to the Trump Administration's interest in critical materials, as well as sovereignty issues regarding Greenland.

As such, I would steer investors toward other mining stocks with current operations, or at least projects inside the U.S. where the government has taken an interest.

Billy Duberstein and/or his clients have 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.