Oct 6 (Reuters) - Shares of Critical Metals

surged over 75% in premarket trading on Monday after Reuters

reported the Trump administration is discussing taking an equity

stake in the development-stage mining company, citing four

people familiar with the talks.

If completed, the deal would give the U.S. government a

direct interest in Greenland's largest rare earths project.

Earlier this year, President Donald Trump had invoked

emergency powers to boost domestic production of critical

minerals as part of a broad effort to offset China's near-total

control of the sector.

President Trump has previously suggested that the United

States should take over Greenland given its strategic location

and rich mineral resources.

The United States has recently taken stakes in companies

mining critical minerals such as Lithium Americas ( LAC ) and

MP Materials ( MP ).

Rare earths are a group of 17 metals used in consumer

electronics, electric vehicles, aircraft engines and military

applications.

Critical Metals, which wants to secure lithium and rare

earths for U.S. and European markets, acquired Tanbreez deposit

in Greenland last year for $5 million in cash and $211 million

in stock.

The New York-based company applied earlier this year for a

$50 million grant under the Defense Production Act, and over the

past six weeks Washington began talks about converting that

grant into an equity stake, three of the sources said.

If the deal proceeds, converting $50 million would equate to

roughly an 8% stake, though negotiations are not final, the

sources said.

Part of the discussion involves how to structure

warrants to give Washington the stake.

As of last close, shares of Critical Metals have gained over

17% so far this year, giving the company a market capitalization

of about $786.9 million.