Last week, President Donald Trump stated that he had established a framework regarding a deal about Greenland’s future, one that ensures the U.S. will be “involved” in the island’s mineral rights. However, despite the easing of tensions with NATO countries after months of increasingly hostile talk about the ownership of the Denmark – administered territory, Trump’s decreasing number of friends in Europe could thwart his plan to extract the valuable minerals hidden beneath the ice.
According to Wood Mackenzie, an energy and mining research firm, this is one of the three crucial obstacles the U.S. would probably have to overcome to gain access to Greenland’s resource wealth. Greenland ranks highly in the world for rare earth reserves, which are essential materials for developing advanced electronics, electric cars, and high – performance magnets. This wealth has made it an alluring target for a U.S. administration eager to diversify supply chains away from China, which is currently the leading force behind several key minerals and controls the majority of global processing capacity.
In a report published Wednesday, WoodMac analysts outlined the main limitations of relying on Greenland’s reserve in the U.S.’s attempt to achieve rare earth dominance. Here are the three major hurdles standing in the way of Trump’s Greenland goals:
1. Logistical nightmares
The extreme Arctic conditions would be a tough opponent for any large – scale mining operation. Greenland’s vast ice sheet restricts exploration to the island’s coastal edges. But even there, freezing temperatures and limited winter daylight make industrial operations almost impossible. Equipment has to withstand sub – zero storage, while fuel and workers face long – distance transport through inadequate ports and non – existent roads, WoodMac’s analysts wrote. Even if a suitable site is found and staffed, the deposits are located under ice sheets up to a mile thick.
Only one port in Greenland, in the southwestern capital of Nuuk, has modern infrastructure that can handle exports, the analysts added. In the rest of the territory, companies or countries trying to mine would have to build their own energy grid and transport networks, considering the lack of both in the interior, and also import an entire skilled workforce.
“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 estimated that the cost would likely reach hundreds of billions of dollars over several decades.
2. Environmental and local pushback
Opposition to mining and resource extraction is deeply rooted in Greenland’s political nature. In a 2021 election, the leftist Inuit Ataqatigiit party campaigned on a clearly anti – mining message, specifically opposing a planned rare earths mine. The party has passed several anti – mining laws, including one in 2021 that banned most uranium development. Instead, the government has given priority to small, sustainable operations.
In last year’s election, Inuit Ataqatigiit lost to a pro – development opposition, but Greenland’s mineral resources minister, Naaja Nathanielsen, still belongs to the leftist party. In an interview with Politico this week, she rejected U.S. threats and vowed to maintain control over resources, promising that she and her party “are 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 perhaps the most significant barrier Trump faces is the deteriorating relationship that has developed between the U.S. and its European partners. The WoodMac analysts point out that Greenland’s geographical position between the U.S. and Europe indicates that 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 obtain a more secure supply of rare earths independent of China.
“This would require cooperation at a time when the relationship between the U.S. and the EU is under stress,” they added. Trump’s plans for Greenland have been widely criticized by the EU as well as the U.K., both of which recently sent forces to Greenland—ostensibly for training purposes but it also symbolized their unity. Tensions seem to have eased a bit after Trump’s appearance at Davos last week, where he ruled out military action and withdrew EU tariff threats.
But transatlantic relations remain at a low level. And if Trump increases the belligerence of his rhetoric again, Greenland might even be pushed closer to China, the WoodMac analysts warned. While China currently has only a small stake in Greenland’s mining operations, and the island’s government has said it prefers partnerships with Western nations, it has also shown willingness to engage with China if the conditions are right. In an interview with the FT last year, Nathanielsen, the minerals minister, criticized the decreasing 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.