European Lithium’s Strategic Move Secures Critical Supply Chain Position

European Lithium has captured significant market attention following a major announcement from its subsidiary. Critical Metals Corp, in which European Lithium holds a substantial stake, has entered into a pivotal joint venture agreement with Romania. The deal secures an offtake for 50% of the production from the Tanbreez rare earths project. Trading in the ASX-listed shares resumed after a two-day halt prompted by the news.

This partnership represents a potential strategic transformation for European Lithium. Critical Metals Corp signed a memorandum of understanding with Romania's state-owned FPCU, a subsidiary of the nuclear energy group Nuclearelectrica. The timing is critical, as Western nations actively seek to establish alternatives to China's current dominance in rare earths processing.

The 50/50 joint venture to construct a rare earths processing facility within the European Union delivers several key strategic advantages:

• Guaranteed Offtake: Critical Metals will supply 50% of the premium rare earth concentrates from the Tanbreez project to the Romanian joint venture for the entire life of the mine.
• Capital-Light Structure: Critical Metals retains its 50% interest in the venture without being required to contribute equity or debt capital.
• Production Pre-Sold: Combined with prior agreements with UCORE (10%) and ReAlloys (15%), this new deal means 75% of Tanbreez's future production is now under long-term arrangements.
• Defense Focus: The planned processing plant is intended to produce rare earth magnets for aerospace and military applications.

Valuation and Strategic Implications for European Lithium

European Lithium's current holding of 53,036,338 shares in Nasdaq-listed Critical Metals Corp represents an approximate 45% ownership stake. Based on Critical Metals' closing share price of $10.33 USD on December 9, 2025, this stake is valued at roughly $548 million USD, equivalent to 827 million Australian dollars.

Should investors sell immediately? Or is it worth buying European Lithium?

The Tanbreez project, located in southern Greenland, is ranked among the world's largest deposits of both heavy and light rare earth elements. The partnership with Romania aims to establish the first fully integrated mine-to-processing supply chain for rare earths in the Western world. This initiative directly challenges China's control of over 80% of global processing capacity.

Romania's Energy Minister, Bogdan Ivan Gruia, stated the initiative positions his country "at the center of a fully integrated, Western-oriented supply chain—from mining to processing." Both Critical Metals Corp and the Romanian government plan to apply for funding from the EU's recently announced €3.5 billion package dedicated to securing rare earths supplies.

Updated Feasibility Study on the Horizon

Critical Metals Corp intends to incorporate the planned changes to processing and mine planning into an updated feasibility study. The company is investigating a revised process designed to increase the concentrate grade from 2.2-2.5% to over 3% total rare earth oxides in the eudialyte concentrate. Market updates on this front are anticipated by the end of the first quarter of 2026.