By Kirk Maltais
Greenland is rich in natural resources, such as metals and other rare-earth minerals. But actually getting those resources out of the frozen ground is no simple matter.
Commodity markets breathed a sigh of relief after President Trump said on his Truth Social account Wednesday that a "framework of a deal" had been reached with the North Atlantic Treaty Organization over the sovereignty of the Arctic island, averting the imminent threat of a tariff war between the U.S. and EU. But details around what a deal may look like remain hazy, and the logistics around how the untapped resources there can be accessed are an open question.
Lack of Infrastructure
In the short-term, new miners wouldn't rush to set up shop in Greenland, even if allowed. "The economics of exploration and mining in Greenland are significantly worse than even Alaska or the lower 48," said Derek Macpherson, chief executive of West Point Gold, a Vancouver, British Columbia, mining exploration company with operations across North America.
In order for miners to begin operations in Greenland, not only would they need to find the metals and rare-earth elements underground, but they would need to build the infrastructure to mine them from the ground up, Macpherson said.
"Even in a situation with a looser set of permitting than what they have now, you're not going to attract the capital you need to attract those projects right now," he said.
Only 20% of Greenland is ice-free, the Center for Strategic & International Studies said in a report published earlier this month. With temperatures that can plunge to minus 40 degrees Fahrenheit, the infrastructure needed to operate a mine there barely exists and building it would be extremely difficult, even if Greenland is sitting on some of the world's largest mineral deposits.
Frozen Potential
Greenland contains the eighth-largest reserve of rare earths in the world, according to the U.S. Geological Survey--with none of that being mined currently.
Rare earths are a term covering 17 metallic elements that are key for manufacturing components used in products such as smartphones, batteries, and hard disk drives, among others.
China isn't only the biggest miner of these elements, but is far-and-away the lead refiner, which makes the elements then usable for manufacturing.
"China's monopoly on the supply of processed rare-earth minerals and magnets gives it the power to choose winners and losers in the world in which countries can have a vibrant manufacturing economy," said Arlan Suderman, chief commodities economist with StoneX Group.
Additional onerous rules applied by the Chinese government on rare-earth exports last year has raised the anxiety around procurement of these materials in the future for the rest of the world. Some of these rules have since been paused, but Western countries are seeking ways to diversify their supply chains for these elements.
Greenland has been a target of China's strategy to maintain its stranglehold on these materials, as part of its "Arctic Policy." Chinese company Shenghe Resources is a large shareholder in one of two huge mineral deposits in the territory, although development of infrastructure to mine the deposit has been met with Western opposition.
Matter of National Security
In the U.S., rare earths--including neodymium, dysprosium, and praseodymium--are listed on the USGS's critical minerals list for 2025. This makes securing alternative sources for rare earths even more important to U.S. national-security goals.
These goals are why Macpherson thinks it is possible that the U.S. government could extend major subsidies to entice miners to develop Greenland. "That's the part you can't really account for," he said. "I think there would have to be to make it work."
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
01-23-26 1412ET
