Inside the Race for Greenland’s Billions in Rare Earth Minerals

Deep beneath Greenland’s melting ice sheet lies a treasure trove of rare earth elements crucial to everything from electric vehicles to wind turbines. President Donald Trump’s claim that the U.S. should acquire the territory has sparked wide attention, and Greenland’s mineral wealth is a significant reason.

While China dominates the global supply of these metals, controlling at least 70% of production, Greenland’s deposits are attracting intense interest from the U.S. and European Union, which are racing to secure alternative sources of these critical materials.

Key Takeaways

• Greenland possesses significant deposits of rare earth elements essential for manufacturing green technology and electronics. China currently dominates production of those metals.
• Environmental concerns and technical challenges have slowed development, with strict regulations and the harsh Arctic climate making extraction challenging.
• The U.S. government’s stockpiling plans, including hundreds of tons of rare earth materials in 2024, signal a growing recognition of these minerals’ strategic importance amid geopolitical tensions.

The Geopolitics of Greenland

The push to unlock Greenland’s rare earth deposits is playing out against a complex backdrop of international relations. Denmark provides about $500 million annually to Greenland—more than $8,000 per resident—making the world’s largest island heavily dependent on Danish support. However, this hasn’t stopped other global powers from eyeing its strategic value. Trump has revived interest in acquiring the territory, with his Republican allies in Congress working to authorize negotiations with Denmark.

But Greenland’s value extends far beyond its mineral wealth. The island’s location along the shortest route between Europe and North America makes it crucial for U.S. military interests, particularly for ballistic missile warning systems. The U.S. already maintains a permanent presence at Pituffik air base in northwest Greenland under a 1951 agreement with Denmark, and has previously looked to expand its military footprint to monitor Russian naval activities in the waters between Greenland, Iceland, and Britain.

While Greenlandic Prime Minister Mute Egede has emphasized that “Greenland is not for sale,” a 2023 survey revealed that Greenland possesses 25 of the 34 minerals the European Commission deems “critical raw materials.” This has led to competing interests from multiple powers: China seeking inroads, the U.S. pursuing strategic advantages, and the EU looking to secure its supply chain.

Critical Minerals Powering Tomorrow’s Technology

While China controls nearly 70% of global production of rare earths and about 90% of processing capacity, Greenland’s deposits represent a potential alternative source for these vital materials. The market for these minerals reached $320 billion in 2022 (the latest period for which solid data is available), with demand for some elements tripling since 2017.

These minerals serve diverse applications across industries:

• Neodymium and dysprosium are crucial for creating powerful permanent magnets used in electric vehicle motors and wind turbine generators.
• Terbium improves the temperature resistance of these magnets, making them more durable.
• Praseodymium strengthens the magnetic properties essential for high-performance motors.

However, developing Greenland’s resources presents significant challenges. The concentration of rare minerals in the region’s ore is relatively low—between 1% and 6%—making extraction more costly and technically challenging. The harsh Arctic climate adds another layer of complexity, with ice floes blocking transportation during winter months and requiring complicated ways to store what’s mined.

Important

China has positioned itself as the dominant force in rare earth elements, controlling nearly 70% of production and about 90% of processing capacity. Recent policy changes suggest that China could further tighten its grip on the market by restricting exports, consolidating domestic producers, and stockpiling reserves.

The Bottom Line

While Greenland’s rare earth metal deposits are vast—containing 25 of 34 critical minerals identified by the EU—it isn’t easy to see how they could be used to break China’s dominance in global production anytime soon. Greenland’s people have made it clear they alone will determine their future, including that of their underground deposits. Technical difficulties associated with Arctic mining and concerns about fragile ecosystems are also hurdles. Even putting these concerns aside, experts put large-scale mining operations for these metals at about 10 to 15 years away.