Last week, President Donald Trump announced that he had established a framework surrounding a deal over Greenland’s future, one that guarantees the U.S. Will be “involved” in the island’s mineral rights. But despite easing tensions with NATO countries after months of increasingly hostile rhetoric over ownership of the Denmark-administered territory, Trump’s shrinking pool of friends in Europe could foil his plan to extract the valuable minerals hidden under the ice.
That’s one of three crucial obstacles the U.S. Would likely have to overcome to gain access to Greenland’s resource wealth, according to Wood Mackenzie, an energy and mining research firm. Greenland ranks eighth in the world for rare earth reserves, essential materials to developing advanced electronics, electric cars and high-performance magnets. That wealth has made it a tantalizing target for a U.S. Administration eager to diversify supply chains away from China, which is currently the dominant supplier behind several key minerals and controls the lion’s share of global processing capacity.
In a brief published Wednesday, WoodMac analysts outlined the primary limitations of relying on Greenland’s reserve in the U.S.’s bid for rare earth dominance. Here are the three massive hurdles standing in the way of Trump’s Greenland goals:
1. Logistical nightmares
Arctic extremes would be a brutal adversary to any large-scale mining operation. Greenland’s vast ice sheet limits exploration to the island’s coastal fringes. But even there, freezing temperatures and minimal winter daylight make industrial operations nearly impossible. Equipment must endure subzero storage, while fuel and workers face remote transport via inadequate ports and nonexistent roads, WoodMac’s analysts wrote. Even if a suitable site is found and manned, deposits lie under ice sheets up to a mile thick.
Only one port in Greenland, in the southwestern capital of Nuuk, boasts modern infrastructure that could accommodate exports, the analysts added. In the rest of the territory, companies or nations attempting to mine would have to build their own energy grid and transport networks, given the interior’s lack of either, as well as import an entire skilled labor force.
“All these issues can be overcome, but it will take time and money,” the analysts wrote. How much money? WoodMac didn’t specify, but experts previously told Coins2Day that the price tag would likely run up to the hundreds of billions of dollars over several decades.
2. Environmental and local pushback
Opposition to mining and resource extraction runs deep in Greenland’s political DNA. In a 2021 election, the leftist Inuit Ataqatigiit party won on a distinctly anti-mining message, specifically opposed to a planned rare earths mine. The party has passed several anti-mining laws, including legislation in 2021 that banned most uranium development. The government has instead prioritized small, sustainable operations.
In last year’s election, Inuit Ataqatigiit lost seats to a pro-development opposition, but Greenland’s mineral resources minister, Naaja Nathanielsen, remains affiliated with the leftist party. In an interview with Politico this week, she rejected U.S. Threats and vowed to keep control over resources, pledging she and her party were “not going to accept our future development of our mineral sector to be decided outside Greenland.”
It’s unclear how future U.S.-led extraction would proceed. But under current laws and agreements, WoodMac analysts wrote, “any development will need to meet high standards for environmental and social impact.”
3. Alienating allies
But possibly the most significant barrier Trump faces is the souring relationship that has festered between the U.S. And its European partners. The WoodMac analysts point out that Greenland’s geographic position between the U.S. And Europe suggests rare earth mines on the island would benefit both regions. By sharing financing and risk, they wrote, both the U.S. And the EU could access a more secure supply of rare earths independent from China.
“This would require cooperation at a time when the relationship between the U.S. And the EU is under strain,” they added. Trump’s designs on Greenland have been widely criticized by the EU as well as the U.K., both of which recently sent a small number of troops to Greenland—ostensibly for training purposes but it also symbolized their solidarity. Tensions seem to have eased somewhat after Trump’s appearance at Davos last week, where he ruled out military action and walked back EU tariff threats.
But transatlantic relations remain at a low point. And should Trump ramp up the bellicosity of his rhetoric once again, Greenland might even be pushed closer to China, the WoodMac analysts warned. While China currently has only a minor stake in Greenland’s mining operations, and the island’s government has stated that it favors partnerships with Western nations, it has also signaled openness to engaging with China if the conditions are right. In an interview with the FT last year, Nathanielsen, the minerals minister, criticized dwindling U.S. And EU investment.
‘‘We do want to partner up with European and American partners. But if they don’t show up I think we need to look elsewhere,” she said.
