Retreating ice is exposing huge deposits of iron ore, rare earths and hydrocarbons, but it has yet to launch a single major mining project, and oil and gas production is a decade away at best.
Greenland may award one of its biggest mining exploitation licences this summer, a $2.3 billion (1.5 billion pounds) project by UK-based London Mining Plc (>> London Mining Plc) that will supply China with around 15 million tonnes of iron ore a year.
It is a high-profile project that has awoken concerns about Chinese geopolitical influence from the likes of the EU.
Last summer China's outgoing President, Hu Jintao, paid a three-day visit to Denmark, and top of his agenda were the mineral riches of Greenland, a self-governing nation of just 57,000 people within the Danish kingdom.
EU officials, fearing losing out, flew to Nuuk just days before the Chinese visit to sign a letter of cooperation on accessing its "strong potential" of "critical" materials, including rare earths at competitive prices.
In 2011, U.S. Secretary of State Hillary Clinton also paid a visit to signal her country's interest in rare earths, a group of elements needed in most electrical devices from mobile phones to televisions.
But while Greenland has approved about 140 exploration licences, not one mining project, including London Mining, has secured financing. There have been no major finds of oil or gas, and if there were discoveries, production would not begin for at least a decade.
When asked about how much Greenland could make in revenues from oil, Greenland's mining and petroleum minister Ove Karl Berthelsen replied, "Oil? We have to find it first."
"People say mining has almost started," Finance Minister Maliina Abelsen told Reuters. "It is a lot more difficult than that. This is not the best investment climate for finance. I worry expectations may be too high."
Indeed, the mining world is in upheaval as the price of basic materials such as iron ore and coal tumbled last year on Europe's economic malaise and slowing growth in China.
Brazil's Vale (>> Vale SA), the world's biggest iron ore miner, posted its first quarterly loss in 10 years last quarter, while giants BHP Billiton (>> BHP Billiton Limited) (>> BHP Billiton plc) and Rio Tinto (>> Rio Tinto Limited) (>> Rio Tinto plc) both replaced their bosses and put key projects on ice as they slash costs.
And Tuesday's election win by Greenland's social democratic Siumut party, which campaigned on greater control and heavier taxation of foreign mining, could further complicate matters.
While most in Greenland accept that foreign investment is needed to wean it off an annual grant from Denmark, environmental concerns and unease at the cultural impact of a mining invasion - about 2,000 Chinese workers may be flown in for the construction of the London Mining project alone - featured strongly in the election.
MINING IN THE PIPELINE
Construction on the London Mining project could start in 2014, if all goes well, while three other mining projects could get exploitation permits in the next year, the government said.
That includes Tanbreez, a roughly $185 million rare earths project by Australian-based company Rimbal and a $500 million project in the remote north by Australia's Ironbark (>> Ironbark Zinc Limited), which could be one of the world's 10 biggest zinc mines.
Under four years of Prime Minister Kuupik Kleist, whose party came second in Tuesday's vote, Greenland opened up to investors, with its mining exploration policy ranking 14th out of 96 jurisdictions in a 2012-2013 survey of mining companies by the Fraser Institute, ahead of Alaska and Western Australia.
Greenland officials tout these projects as saviours for the economy of the world's most thinly populated country, which is a quarter the size of the United States.
London Mining's project could provide revenues equivalent to between 10 and 20 percent of the annual grant from Denmark.
"We're a small economy. A small amount of money from a global point of view has a huge influence," said Berthelsen.
But even its small number of projects could come unstuck.
A rare earth deposit being explored by Australian-owned Greenland Minerals and Energy (>> Greenland Minerals and Energy Limited) could be one of the largest outside China, which accounts for more than 90 percent of global production.
But rare earths are often intertwined with uranium, as is the case with this project, thwarting efforts because of Greenland's zero tolerance on mining radioactive materials, a rule it inherited from Denmark.
"For the moment we have scaled down," said Ib Laursen, operations manager at Greenland Minerals and Energy. "We are waiting for some legislative clarity."
U.S. giant Alcoa Inc (>> Alcoa Inc) is considering building an aluminium smelter on Greenland's west coast, strategically sited between European and North American markets. It could entail the import of thousands of workers, possibly from China.
The smelter would be fed from mines as far apart as Brazil and Australia, supplying aluminium to the global market.
But Alcoa has not yet decided whether to go ahead with the project as the sector struggles with overcapacity; firms are still taking out capacity to curb losses.
"Financing for mining is very tight, and it will be more of a problem in 2013 than in 2012. There is a shortage of risk-taking capital at the moment," said a senior government official.
"I would be happy if only two of these projects started, given the global financial situation."
OIL AND GAS
Government officials say Greenland's northeast offshore fields could have 31 billion barrels of oil and gas, while the west, including Canadian waters, could hold 17 billion barrels.
But drilling in the western offshore region in 2010 and 2011 failed to yield any discoveries despite a $1.2 billion campaign led by British explorer Cairn Energy (>> Cairn Energy PLC).
Cairn said by email that it might carry out more drilling in 2014 but only envisaged "limited operations" in 2013.
Operators, who also include Royal Dutch Shell <RDSa.L>, have no firm plans for drilling this year as they hold plenty of less difficult acreage elsewhere.
Drilling is very expensive as remote locations and tough conditions require extra precautions, such as a back-up rig, or extra search-and-rescue vessels.
"In terms of drilling, Greenland is still under-explored. It is still early days, and a lot of works needs to be done on interpreting and understanding the subsurface data," Lynn Morris, analyst at Europe Upstream Research for Wood Mackenzie.
The government expects to announce within two months the results of bidding on 11 blocks on the remote northeast.
"There are very high expectations with this area," said a senior government official in Greenland who asked to remain anonymous. "I would not expect to see any drilling wells for at least 10 years or so."
"North Eastern offshore sites are more frontier than the west, and the conditions are far more difficult - deeper water, harsher climate. This area is geologically analogous to Mid Norway and the Barents Sea," Wood Mackenzie's Morris said.
That said, Greenland's long-term promise remains alluring.
"In one way we get a little bit worried in the short term, but in the longer view we are less concerned," Berthelsen said.
Damien Degeorges, founder of the Arctic Policy and Economic Forum, say few countries could afford to be complacent.
"Greenland is a long-term strategy," Degeorges said. "Like the Arctic, it will not be some 10-year fashion that will go away. You cannot take the risk of not being there."
(Editing by Will Waterman)
By Alistair Scrutton
Stocks treated in this article : Alcoa Inc
, BHP Billiton Limited
, BHP Billiton plc
, Cairn Energy PLC
, Greenland Minerals and Energy Limited
, Ironbark Zinc Limited
, London Mining Plc
, London Mining Plc
, Rio Tinto Limited
, Rio Tinto plc
, Vale SA