Nuuk (dpa) – US President Donald Trump has articulated his interest in acquiring Greenland primarily through the lens of national security. However, many observers believe economic factors also play a significant role in this interest, particularly Greenland’s substantial reserves of critical raw materials. Trump’s focus on resource acquisition is further demonstrated by his activities in Ukraine, and the European Union also recognizes the importance of Greenland’s mineral wealth.
Understanding Critical Raw Materials
Critical raw materials (CRM) are defined as resources that hold significant economic value and come with a high risk of supply disruption. Among these are the noted rare earth elements (REE), which comprise 17 metals categorized into nine heavy and eight light rare earths. These materials are essential components in everyday electronics such as smartphones, laptops, and televisions. Devices often require elements like yttrium, praseodymium, terbium, and dysprosium depending on their design.
Rare earth metals are vital for enabling the green transition, being integral to the production of electric vehicles and wind turbines. These technologies depend on strong permanent magnets, which can contain several kilograms of neodymium and praseodymium, contingent on the size of the motor in electric cars.
Why Do Greenland’s Resources Matter to Trump and the EU?
Germany, while maintaining a robust industrial base, possesses limited critical raw materials. As a result, German firms depend heavily on imports, which is also true for other EU nations. This reliance is particularly evident in the case of rare earth elements: the EU excels in manufacturing car engines and wind turbines but satisfies its need for rare earth magnets almost exclusively through imports from China, the dominant player in this sector.
This dependency exposes the EU to geopolitical risks: any reduction or cessation of supplies from China, potentially arising from political disputes, could pose significant challenges, especially in light of the EU’s climate goals and digitalization efforts.
While Trump may not prioritize environmental issues, he is keenly aware of economic interests and the need to counteract China’s dominance—making resource-rich Greenland, part of the Kingdom of Denmark, particularly appealing. “I believe Trump is more focused on the rare earths than on establishing a military presence in Greenland,” suggests former Greenlandic Finance Minister Maliina Abelsen, now the chair of the board at the fishing company Royal Greenland.
The Significance of Greenland’s Mineral Resources for the EU
The EU has long viewed these critical resources as strategically important. Nearly a year ago, EU Commission President Ursula von der Leyen inaugurated an EU office in Nuuk and signed cooperative agreements amounting to 94 million euros, aimed at developing value chains for energy and critical raw materials.
In late 2023, an agreement was reached to designate Greenland as a strategic supplier of resources to support ecological transitions in Europe. This encompasses not just rare earths but also copper, graphite, and lithium. The EU has identified 34 critical raw materials essential for the green and digital transitions—23 of which are found in Greenland, according to mineral researcher Jakob Kløve Keiding from the Geological Survey of Denmark and Greenland (Geus).
Greenland’s potential is considered exceptionally high for many of these minerals. “Some of Greenland’s rare earth deposits rank among the largest globally,” notes Keiding.
Potential Benefits for Greenland
The immense value of these mineral resources is clear, though estimating their exact worth is challenging, according to Keiding. He emphasizes, “They are worth nothing as long as they stay in the ground.”
This scenario brings both Trump’s USA and the EU back into focus. The extraction of raw materials alone does not generate substantial profits; rather, it’s the later stages in the value chain that hold the most economic promise, with much of the expertise currently residing in China, states Keiding. Both the US and the EU are striving to gain a foothold in these aspects. “It has become clear that China essentially holds a monopoly on the market.”
Currently, Greenland’s economy largely depends on fishing and a Danish financial subsidy exceeding 500 million euros annually. Revenues from mining licenses and taxes could cultivate a new economic foundation for the island’s 57,000 residents. “Ninety-eight percent of our exports come from fishing,” notes former
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