US President Donald Trump has recently justified his interest in Greenland’s takeover again. However, observers assume that, in addition to all military mind games, there is an economic reason behind his desires: Greenland’s extensive occurrence of critical raw materials. Last but not least, how important Trump is such soil treasures shows his voucher for the raw materials in Ukraine.
What are critical raw materials and why are they good for?
Critical raw materials (CRM) are materials with great economic importance and at the same time a high risk of care. Among them are the much -noticed rare earths (REE), which are 17 metals, which in turn are combined as nine heavy and eight light rare earths. They are in all sorts of everyday items such as smartphones, laptops and televisions. Depending on the type of design, these electrical devices need yttrium, praseodym, terbium and dyprosium.
Rare metals are particularly important for the green changeover: they are installed in electric cars and wind turbines, among other things. These products need strong permanent magnets, which can contain up to several kilograms of neodymium and praseodym in the case of electric cars depending on the size of the engine.
What makes it interesting for the EU and Trump’s USA?
Germany has a powerful industry, but only a few critical raw materials. German companies therefore rely on deliveries from abroad as well as corporations in other EU countries. This becomes particularly clear with the rare earths: On the one hand, the EU is a world market leader, for example, in the production of car engines and wind turbines, on the other hand it covers its need for rare-dating magnets almost exclusively with imports from China, which in turn is an absolute world market leader in the area.
The EU makes such dependency susceptible to geopolitical tensions: it would have a good problem if China would throttle or even hire the supply for political or strategic reasons – for example in the course of a customs dispute. This would be fatal, especially with a view to EU climate policy and digitization.
Now, as is well known, Trump is doing little about the climate, but it is about the big money and also about containing all the leadership role of China – and the resource -rich Greenland, which belongs to the Kingdom of Denmark, comes into play. “I think Trump is more interested in the rare earth than to have the military in Greenland,” estimates former Greenland finance Minister Maliina Abelsen, who is now the chairman of the supervisory board at the fishing group Royal Greenland.
What do Greenland’s soil treasures mean for the EU?
The EU has long since taken a look at the raw materials. Almost a year ago, Commission President Ursula von der Leyen opened an EU office in the capital Nuuk and signed two cooperation agreements with a total volume of 94 million euros-part of which is to be invested in value chains for energy and critical raw materials.
An agreement was already made to the raw materials at the end of 2023, which Greenland should position as a strategic raw material supplier for ecological change in Europe. It is not only about rare earths, but also about copper, graphite and lithium: the EU has a total of 34 critical raw materials that are necessary for the green and digital change – and 23 of them can be found in Greenland, like the mineral researcher Jakob Kløve Keiding from the Geological Service for Denmark and Greenland (Geus) says.
With several of them, the potential in Greenland is classified as extremely high. “Some of the Greenland deposits for rare earths are among the largest in the world,” says Keiding. In the places of Kringlerne and Kvanefjeld in southern Greenland alone, many millions of tons of unused rare elements are stored. Other large deposits for REE and other raw materials can be found in the southwest and in the east of Greenland.
How could Greenland benefit?
It is obvious that these soil treasures have an immense value. It is difficult to estimate how high this is, says Keiding. Just so much: “You are not worth anything as long as you stay in the ground.”
Which is what Trump’s USA and Leyens EU come into play again. Because the mere reduction in raw material does not throw the big money, but rather the later steps in the value chain-and the know-how is mainly in China, says Keiding. Both in the USA and the EU are working on catching up. “It has been realized that China practically controls a monopoly and the market.”
Greenland is largely dependent on fishing and a Danish financial subsidy of the equivalent of more than 500 million euros per year. The income from mining licenses and taxes alone could mean a new economic pillar for the 57,000-inhabitant island. “98 percent of our export is currently from fishing,” says ex-minister Abelsen. Like tourism, the mineral sector can contribute to a broader economy – the Greenland in turn needs a much -discussed possible independence from Denmark.
Is there downhill sides of the mining?
Yes, in the form of risks for the sensitive arctic environment, but also for local people, for example through radioactive in -products. In Greenland, these dark sides even decided the last parliamentary election in 2021: At that time, an Australian mine project was publicly disputed to obtain rare earths and uranium in southern Greenland. The left -wing party IA won the choice by positioning itself against the project. Half a year later, the extraction of uranium was banned.
Another problem is the rough arctic conditions and high operating costs. “We are a remote place, which is why it is so expensive to reduce minerals in Greenland. So we are often the last option that is considered,” says Abelsen. “But since we run out of the rare earths, it is obviously becoming more attractive to look back towards Greenland.”
