Inside the race for Greenland's mineral wealth

Former US President Donald Trump once stated that he believed the US would gain control of Greenland, repeatedly emphasizing his claim to the Arctic island, once citing “economic security” as a reason. Although the Danish autonomous territory was quick to declare it not for sale, it possesses vast and largely untapped mineral resources that are in high demand.

As a motorboat navigates through the choppy coastal waters and magnificent fjords of southern Greenland, jagged gray peaks suddenly come into view. “Those very high, sharp mountains are essentially a gold belt,” says Eldur Olafsson, CEO of the mining company Amaroq Minerals, pointing towards them.

After a two-hour boat ride, we land in a remote valley below Mount Nalunaq, where the company is drilling for gold. They are also searching for other valuable minerals in the surrounding mountains and valleys, having secured exploration licenses for over 10,000 square kilometers (3,861 square miles). “We are looking for copper, nickel and rare earth elements,” the Icelandic head says. “This is uncharted territory, and it’s still possible to find multiple large deposits.”

The base camp, a collection of mobile buildings and bright orange accommodation tents, houses over 100 employees, including Greenlanders, Australians, and former British coal miners. From there, a road stretches up the valley, and we drive into the gold mine, traveling up a dark tunnel within the mountain. “Look here!” Mr. Olafsson exclaims, pointing to a white quartz vein and a thin black line. “Gold, gold, gold. It goes all the way through. Isn't it amazing?”

The mine was acquired by Amaroq in 2015 and had been operational for most of the previous decade, but it closed due to low gold prices and high operating costs at the time. Amaroq is confident that the mine will now be profitable. The company plans to increase production this year, for which they have built a brand-new processing plant to crush the ore and refine the precious metals into gold bars. “We can leave the site with a box of gold every month instead of shipping ore with a 30,000-ton vessel,” Mr. Olafsson explains.

He states that Greenland offers an unparalleled opportunity due to its vast, largely untouched mineral reserves. “It can become a supplier of all the minerals that the Western world will need for the next decades,” Mr. Olafsson adds. “It is a very unique position.” However, there are currently only two active mines across the entire island.

Greenland is an autonomous territory of Denmark but controls its own natural resources. It possesses the world’s eighth-largest reserves of rare earth elements, which are crucial for manufacturing everything from mobile phones to batteries and electric motors. It also holds significant amounts of other critical metals, such as lithium and cobalt. There are also oil and gas deposits, but new drilling has been banned, and deep-sea mining is excluded.

Christian Kjeldsen, director of the Greenland Business Association, says that the global “current geopolitical situation is driving interest in the world’s largest island.” He notes that China has the world’s largest reserves of rare earth metals, while Western countries are looking for alternative supplies. “China has a very strong position when it comes to critical raw materials,” he states.

This has prompted increasing interest from Western nations in gaining access to Greenland’s minerals. China has also been eager to get involved, but its presence has been limited. Reuters recently reported that the US lobbied an Australian mining company not to sell Greenland’s largest rare earth project to a potential Chinese buyer.

Naaja Nathanielsen, Greenland’s Minister for Business, Trade and Raw Materials, says interest in the region’s minerals has “absolutely increased” in the past five years or so. She adds, “We are used to being a hotspot for the climate crisis. We want to be part of the solution.” Currently, Greenland has approved licenses for 100 blocks, where companies are searching for viable deposits. British, Canadian, and Australian mining companies are the largest foreign license holders, while Americans hold only one.

However, there are many steps to take before these sites become potential mines. Although Greenland may be rich in mineral resources, the realization of any “gold rush” is still progressing slowly. The island’s economy, with an annual GDP of just over $3 billion (£2.4 billion), is still driven by the public sector and fishing. The region also relies on a $600 million annual subsidy from Denmark.

Greenland’s politicians hope that mining revenue can reduce reliance on the $600 million annual subsidy from Denmark and help to fuel independence efforts. But in the meantime, Greenland is generating more revenue from tourism. Javier Arnaut, head of Arctic Social Sciences at the University of Greenland, says that officially, mining is still important for independence. “But in practice, you can see that very few mining licenses are being issued.”

Ms. Nathanielsen admits that while partnerships are being built with the US and the EU, “we still don’t see a lot of money flowing into the sector.” She hopes that another three to five mines will be operational within the next decade. However, mining is not easy due to Greenland’s remote location and weather. It is the world’s largest island, with 80% of its area covered by ice sheets. It has rugged mountains, and there are no roads between settlements.

Jakob Kløve Keiding of the Geological Survey of Denmark and Greenland states, “It’s an Arctic terrain, and we face severe conditions in terms of climate and limited infrastructure. So, it’s quite costly to open a mine.” These high costs, combined with low global metal prices, have deterred investors. Others blame the slow growth of the sector on red tape. The region has strict environmental regulations and social impact requirements, and it can take time to get a license.

Ms. Nathanielsen insists that most communities support mining and that it boosts local economies. “They [overseas miners] shop in local stores. They hire local employees. They rent local boats or helicopters,” she says. However, in Qaqortoq, the largest town in the south, resident Heidi Mortensen Møller doubts that new mines will bring jobs for locals. “When they talk about increasing jobs, who are they talking about?”

Jess Berthelsen, head of the local trade union SIK, says many people believe that mining revenue “will flow out of the country” without benefiting Greenland. But he supports the development of the sector. “Greenland needs more revenue and to make money in other ways than just fishing.” It is unclear how Trump’s latest Greenland strategy will develop. However, the region’s Premier, Múte Egede, said earlier this month that “we need to do business with the US” and that “the door is open when it comes to mining.”

Mr. Kjeldsen from the business association hopes this will bring “much-needed investment” to the sector. “On the other hand, there is a risk that if the uncertainty surrounding the Trump signals persists for a longer period, it could have a negative impact on the investment climate.”