Greenland, an autonomous territory under the Kingdom of Denmark, is located in the Atlantic Ocean and is known as one of the largest land masses in the Arctic. Initially in 2019, the President of the United States (US), Donald Trump, made his first statements expressing interest in purchasing Greenland, and he made similar remarks during his second term as well. Rather than evaluating whether the island might be annexed by the US or face a threat of annexation, it is worth discussing what is happening in the Arctic region and what Greenland possesses that draws the attention of the parties involved.
Among the most significant dynamics underlying Trump’s emphasis on ‘national security’ while highlighting the importance of the island and the region are the expansion of the US hinterland and the presence of energy and rare earth element reserves in the region, which are substantial enough to potentially reshape the fate of the world. The main framework for cooperation in the region, primarily aimed at environmental and developmental goals, is formed by the Arctic Council, whose core members include the United States, Canada, Denmark, Norway, Russia, Iceland, Sweden, and Finland.
The North Atlantic Treaty Organization (NATO) serves as an invisible curtain against Russia, particularly along the borders of stakeholder countries in the Arctic region, functioning primarily as a military entity. In light of recent statements, it has been determined that the region is not only geopolitically significant but also holds resources that could enable ‘developed’ countries to achieve dominance in industrial sectors.
The Arctic has long held significant geopolitical importance. Greenland, with its raw materials such as rare earth elements, graphite, and lithium needed for electric vehicles, wind turbines, and energy transmission lines, is vital for the clean energy transition. However, the current extraction and processing of these raw materials are largely dominated by China. In 2021, China produced 98% of the world’s gallium, 82% of natural graphite, and 60% of processed rare earth elements. China also accounted for 72% of the United States’ rare earth compound imports and 42% of its graphite imports. Europe, on the other hand, is entirely dependent on China for heavy rare earth elements. This situation poses a national security threat, as geopolitical tensions could jeopardize the ability of the US and the European Union (EU) to produce the technologies necessary for their energy transition.
Greenland is considered a region with significant oil and natural gas reserves in the Arctic. In a report published in 2008, the United States Geological Survey (USGS) estimated that the Arctic region to the north of Greenland contains approximately 90 billion barrels of oil, 1.670 trillion cubic feet of natural gas, and 44 billion barrels of liquefied natural gas (LNG). These estimates indicate that the region holds a substantial portion of the world’s undiscovered oil and natural gas resources.
Due to Greenland’s harsh climatic conditions, lack of infrastructure, and environmental concerns, extracting these resources is highly costly and complex. In fact, the Greenland government suspended all oil exploration activities on the island in July 2021 as part of its efforts to combat climate change. Therefore, although Greenland’s oil and natural gas reserves have significant potential, it seems unlikely that these resources will be extracted in the near future given current policies and environmental concerns.
Of the 17 known rare earth elements, four are in high demand for energy transition technologies: dysprosium, neodymium, praseodymium, and terbium. Neodymium and praseodymium, in particular, are crucial for the magnets used in electric motors and generators. Also, these magnets are found in wind turbines and hybrid vehicles. Adding small amounts of dysprosium and terbium strengthens these magnets and enhances their durability. The demand for these metals currently exceeds supply and is expected to grow further. According to the EU Joint Research Centre, prices are anticipated to remain high in the foreseeable future.
While vast mineral deposits can be found in Northeast Asia, geographical competitors like Northern Canada hold large reserves of minerals such as nickel, copper, cobalt, and rare earth elements. In this covert competition, it is known that Russia and China have been building nuclear-powered icebreaker ships to engage in mining activities in the Arctic. Since 2021, a project led by the partnership of KoBold Metals and Bluejay Mining, with investments from renowned technology company owners like Bill Gates, Jeff Bezos, and Michael Bloomberg, has proven the region’s significance in terms of minerals and rare earth elements.
It is known that the Disko-Nuussuaq region in Greenland could rival the world’s largest nickel mines, located in Russia, with 208,577 metric tons of nickel production. Currently, the EU imports most of the critical minerals from China. 40% of natural graphite, 43% of germanium, 65% of gallium, and over 80% of both light and heavy rare earth elements are exported by China. In such a scenario, the assessment of Greenland, which has gained significant popularity in geological reports over the last five years, could be seen as a major opportunity for European or Western Bloc countries.
Especially in the production of electric vehicles, the demand for graphite is expected to increase 30 times by 2030, and for the projected 3.5 million tons of graphite needed for electric vehicle production by 2040, Greenland could meet this demand with its known reserve of 6 million tons. Greenland’s resources are not limited to graphite alone. Its most important deposits include rare earth elements, such as neodymium, used in technologies ranging from wind turbines to nuclear reactors. China currently leads in this area with 44 million tons of rare earth oxide reserves. However, Greenland is estimated to have 42 million tons of rare earth oxide reserves. If this potential is fully realized, Greenland could surpass Vietnam, Brazil, and Russia to become second in the world for rare earth element reserves.
The differences in energy transition policies between Washington and Brussels create a barrier to finding a rational and practical common ground. The rise of green and left-wing alliances in European governments from 2015 to 2022 has continued to serve as an industrial obstacle for the EU in terms of green energy policies and taxation. For instance, key political actors in Greenland have shown a supportive attitude toward developing the mining industry. All seven parties in the Greenlandic Parliament acknowledge the importance of investing in the mining sector to promote future prosperity. However, despite this interest, Prime Minister Múte Bourup Egede’s government banned the exploitation of uranium exceeding 100 ppm in 2021. This ban came after local opposition to the Kvanefjeld mining project, which planned to dispose of uranium waste near the town of Narsaq. This situation complicates the extraction of rare earth elements, as these deposits are also found with uranium reserves.
On the other hand, the opening of new sea routes due to global warming is seen as one of the reasons the region remains a focal point, even beyond its minerals. With the formation of the Northern Sea Route, Russia’s maritime journey between Asia and Europe is expected to be shortened by 30% compared to the Suez Canal. The Northwest Passage, on the other hand, connects the Atlantic and Pacific Oceans. However, this new sea route has led to international disputes due to Canada’s sovereignty claims over the route. The Trans-Arctic Route, known as the route that passes through the center of the Arctic Ocean, has the potential to offer the shortest distance between Asia and North America.
In summary, Greenland’s significance in terms of its defense infrastructure, as well as its rare earth elements and energy resources, gives it geopolitical importance that will shape the future. Trump’s statements, in contrast to the super-commodity economic doctrine led by China and the BRICS countries, show no surprise in exploring this alternative route. However, for developed countries to take any steps in the region, they must resolve public opinion issues and, especially, their internal conflicts regarding green energy. These policies are contributing to the political strengthening of far-right parties in the 2024 elections, particularly the Freedom Party of Austria (FPÖ) in Austria, the National Rally (RN) in France, and in the upcoming period, the Alternative for Germany (AfD), and are making these policies be seen as a luxury need. Furthermore, the integration of green energy into industry and its taxation method will demonstrate that any model based on these will be far from rational reality.
Spot:
• Key political actors in Greenland show a supportive attitude towards developing the mining industry.
• The differences in energy transition policies between Washington and Brussels create a barrier to finding a rational and practical common ground.
• Due to Greenland’s harsh climatic conditions, lack of infrastructure, and environmental concerns, the extraction of these resources is highly costly and complex.
