Trump is not the first to notice Greenland’s mineral wealth. Here are 3 reasons the minerals have stayed underground

Greenland does not have the infrastructure, and building it would be very difficult

Greenland’s remoteness and harsh Arctic environment are fundamental barriers to mining. Most of the island lies under ice, and even in ice-free areas where mineral deposits are found, there are no railways, few roads, limited ports, almost no power grids, and a very small workforce trained for industrial mining.

Building a modern mine on Greenland is not like opening one in Australia or Brazil or indeed, China. Every piece of infrastructure — from roads and airfields to energy supplies and housing for workers — generally must be created from scratch, at vast cost. Exporting minerals requires efficient transport links, yet Greenland’s communities are scattered, and some towns have no direct connections to each other.

Once the ore has been dug up, it has to be processed, something China has a massive expertise in. It then has to be transported and connected to global markets. Without basic infrastructure, exploration projects remain idle or move extremely slowly, discouraging large-scale investment. Any mining project here would have to pour in money and effort for years before the extractions could be utilised.

Much before Trump, Greenland itself has wanted to utilise its mineral wealth. The homepage of the island’s Mineral Resources Authority calls it, “An underexplored, mineral-rich country with a competitive licensing framework, stable political environment, low investment risk and pro-mining population and government.” However, investors are not lining up, because of the huge risks and costs involved, apart from the harsh climate for workers.

Greenland’s environmental laws

Despite the mineral resources ministry’s claim of a “pro-mining population and government”, Greenland has laws that restrict exploitation of natural resources.

Large-scale mining activity could endanger the fragile ecosystem of the ice-covered island and accelerate melting of the ice sheets, something already happening due to global warming. Thus, in 2021, Greenland banned new offshore oil and gas exploration, with climate change cited as the chief reason.

Then is the fact that rare earths in Greenland are often found alongside the radioactive uranium, and uranium mining is heavily regulated here.

The China angle

Even if infrastructure and regulatory issues were resolved, mining has to make economic sense, and that’s not guaranteed in Greenland’s case.

First, the global supply of rare earths and critical metals is harshly competitive. China currently dominates processing and much of the raw production of rare earth minerals worldwide, often at lower costs than Western projects can match.

Mining ventures require billions in upfront capital, a long timeline to recoup costs, and confidence in future commodity prices. For rare earths in particular, prices are volatile, and large swings often result from China’s pricing strategies — it can easily undercut new producers by lowering prices and flooding the market with materials.

Greenland’s attraction is not because of the quantities of its reserves, but the fact that they are almost completely untapped. For most companies, however, this would count against the island, when they can get the same quantities of reserves in other, more exposed locations, in South America, Australia, and Africa.