European Lithium secures $185m in EXIM funding for Tanbreez rare earth project in Greenland

European Lithium (ASX: EUR) has welcomed news that the Tanbreez rare earth project in Greenland has received a Letter of Intent (LOI) from the US Export-Import Bank (EXIM), indicating support for a total non-dilutive funding package of approximately $185 million (US$120m).

EXIM is the official export credit agency of the US, created to support the growth of American businesses by offering financing tools including loans, guarantees and insurance to facilitate international trade, strengthen the US economy and help support jobs across the country.

EXIM presented the LOI to Critical Metals Corp, of which European is the largest shareholder with approximately 63% of its ordinary shares.

Rare earth supply

Located in Greenland, Tanbreez is a permitted, globally significant asset positioned to unlock a sustainable, reliable and long-term rare earth elements (REE) supply for North America and Europe.

Once operational, Tanbreez will supply REEs to customers in the western hemisphere to support the production of a wide range of next-generation commercial products, as well as satisfy demand from the defence industry.

European estimates the project contains more than 27% heavy REE, which carry a much higher value than light REE.

15-year term

The proposed EXIM funding package has a 15-year term and is subject to key development milestones such as permitting, feasibility studies and environmental assessments, as well as EXIM conducting its standard due diligence.

While the structure of the proposed financing package is yet to be determined, European has indicated that it may take the form of a loan or similar obligation where debt covenants, interest payments and/or security may apply.

Financial models, secured construction and operations contracts, reliable resource supply and credible offtake agreements with creditworthy buyers are among the necessary pre-application milestones required to maximise the project’s likelihood of economic success and debt-servicing capacity.

No indicative timeline for the execution of a binding financing arrangement has been released as yet.