European Lithium Ltd (ASX:EUR, OTCQB:EULIF) says construction has officially commenced on a pilot plant and multi-use facility in southern Greenland after its major investment holding, Critical Metals Corp, formally approved the project at the Tanbreez rare earths development.
In an ASX update on Friday, European Lithium said the decision marks a key enabling step for Tanbreez, one of the world’s largest known rare earth deposits, and strengthens the underlying value of its near-45% equity stake in Critical Metals.
Construction approved under turnkey contract
Critical Metals has awarded a full turnkey design-and-build contract to Greenland-based contractor 60° North Greenland for the delivery of an Arctic-grade pilot plant, storage and administration facility in the town of Qaqortoq.
Under the comprehensive contract, the contractor assumes responsibility for all engineering, permitting, procurement, logistics, construction and commissioning activities — an approach Critical Metals says provides a clear and structured pathway for infrastructure delivery in a challenging Arctic environment.
The facility is considered a cornerstone piece of enabling infrastructure for the Tanbreez project, supporting pilot-scale processing, core handling, storage and on-site administration.
Pilot plant targeted for May 2026 readiness
The industrial building will measure about 80 metres by 20 metres, with an internal clearance of around 10 metres plus roof structure. It will be divided into three functional sections and include integrated mezzanine decks for offices and personnel facilities.
Critical Metals said the pilot plant section of the facility is scheduled to be ready for use on or before May 2026, subject to contractual milestones being met. “Ready for use” includes a weather-tight insulated building envelope, completed load-bearing floors and full access for equipment delivery and installation.
The structure has been engineered specifically for Arctic conditions, including snow loads, wind loads and frost, reflecting the company’s intent to establish long-term operational capability in southern Greenland.
Local footprint expands in Greenland
Alongside the construction approval, Critical Metals has also completed the purchase of a residential property in Qaqortoq, which will be converted into a local office and operational base.
The company said the move reinforces its long-term commitment to Greenland and supports closer coordination with contractors, regulators and the local community as Tanbreez advances.
Chief executive Tony Sage said the commencement of construction represents a significant step forward for the project.
“Formally approving and initiation of construction in Greenland is a major step forward for CRML and the Tanbreez project,” Sage said. “This turnkey contract provides us with a clear, structured pathway to deliver critical pilot-plant infrastructure in a challenging Arctic environment.”
Strategic significance for European Lithium
For European Lithium, the announcement underscores the growing strategic and financial significance of its investment in Critical Metals. The company holds 53,036,338 shares, representing about 44.98% of Critical Metals’ issued capital.
Based on the January 8 closing price of US$13.47 per share, European Lithium’s stake was valued at about US$714 million, or A$1.07 billion, although the company noted that the valuation remains subject to share price movements.
European Lithium has highlighted Tanbreez as a key part of its broader exposure to critical minerals, alongside lithium assets in Austria, Ukraine and Ireland. The project has seen steady technical and commercial progress in recent months, including drilling updates and expanded offtake arrangements.
Read more: European Lithium reports final 2024 drilling results from Tanbreez Fjord area
With construction now under way, the pilot plant facility is expected to underpin further processing validation and technical work programs as Tanbreez continues to advance towards development.