Mining executive Tony Sage had one thing on his mind when China announced sweeping restrictions on its export of rare earth elements last summer: a bare, rugged mountainside in Greenland.
There, on the edge of a chilly Arctic fjord, his company had just bought a licence to mine, while geological surveys had shown a vast array of rare earths underground that China had just stopped exporting.
For the myriad of small frontier mining companies betting on Greenland’s untapped mineral resources, China’s decision presented a big opportunity, despite the remote island’s freezing climate and forbidding terrain.
“It shows that geopolitically, it’s very important to bring on other suppliers,” said Sage, chief executive of Australian-based Critical Metals Corp. “Even if China starts selling again, you don’t want to be reliant on a potential enemy.”
Then, in December, Donald Trump, citing Greenland’s mineral resources and strategic importance, demanded to buy the territory from its ruler Denmark. In a fiery telephone call in January with Danish prime minister Mette Frederiksen, he insisted he was serious about his bid for the island.
His actions have spurred a surge of interest in Greenland’s mining companies and its potential to produce key elements used in everything from electric vehicles to missile guidance systems, investors said.
“When you see the increased noise, people are potentially more willing to inject capital . . . Interest had gone pretty crazy,” said Charlie Byrd, portfolio manager at Cordiant Capital.
Cordiant owns a majority stake in Lumina Sustainable Materials, which runs a mine producing anorthosite used in fibre glass — one of only two in operation on the world’s largest island.
The other, a gold mine owned by Amaroq Minerals, is ramping up production after completing its first gold pour, where the metal is cast into bars for transport, in November last year.
But although Greenland’s government has pitched itself as an alternative supplier to China to strengthen its economy and boost its campaign for independence from Denmark, the hurdles for mining remain huge.
These include high costs, the icy Arctic climate and the lack of infrastructure. There are no roads connecting any one of its settlements and cities, only fjords.
“We have looked at Greenland, we have been exploring it for 15 years. We have never been able to come up with a profitable project,” Rio Tinto chief executive Jakob Stausholm told CNBC in January.
“There’s clearly a lot of minerals up there, but the logistic cost in a place where you don’t have roads . . . is enormous.”
The Greenlandic government has also stripped some miners of their licences for failing to make any progress with their projects on the ground, while other companies have chosen to sell.
“Commercially, it was hard to make it work,” said Alexander Downer, a former Australian foreign minister and an adviser to an Australian zinc miner, Skylark Minerals, which ended up selling its asset in Greenland in December for just over A$1mn.
“But if the Americans take control, or their engagement and influence ramp up, it might make it easier,” he said.
Trump’s nominee for commerce secretary Howard Lutnick has a stake in Sage’s company through his financial firm Cantor Fitzgerald, security filings show. Lutnick has agreed to divest his financial interests if he is confirmed, the New York Times reported.
Sage’s project, the Tanbreez site, which his company bought for just over $200mn in cash and critical metals stock, is on the edge of a southern fjord, rich in minerals, including gallium — an element critical for the west’s defence production. But it needs jetties, roads, and other structures to be built as well as the mine itself.
Despite many years of development by Tanbreez’s previous owner, Greenland’s mining minister Naaja Nathanielsen noted that little progress had been made.
“I do hope that at least all this attention . . . will actually get the project to move forward. That’s why we grant business operators licences to our country. To develop it and get things moving,” Nathanielsen said. “If they don’t hold up their part of the agreement, it goes back to us.”
The global attention triggered by Trump has given some Greenland miners a boost. Shares in London listed Amaroq Minerals and GreenRoc Strategic Minerals have risen 6 per cent and 9 per cent respectively this year, although from a low base.
“It’s all good publicity,” said Roderick McIllree, managing director of 80 Mile, another UK-listed miner with three projects in Greenland.
But he added, projects on the island are expensive and will require billion-dollar investments.
The previous US administration’s focus on climate issues and net zero have also made the past four years “very difficult” for miners, he said.
“What the industry is now hoping for with a capitalist back in charge is that these extractive industries become front and centre.”
This hope, however, worries Greenlanders. Although keen to see the territory strengthen its economy, reduce its reliance on subsidies from Denmark, and move towards full independence, some fear the effect on the pristine and fragile environment of the Arctic island.
“We don’t want a gold rush,” Nathanielsen said. “We’re not looking for 10, 20 active mines. Firstly, it’s not a realistic perspective. Secondly, for us, five mines would be absolutely fine in terms of our workforce and the size of our industry, in terms of oversight (capacity).”
Other Greenlanders point to the irony that extractive industries could be the key to their political independence, when their land is deeply affected by climate change and the melting of the Arctic ice sheet, which covers about 80 per cent of the island all year round.
“We feel the effects of climate change hugely,” said Bolette Nielsen, Tanbreez chair, who works closely with Sage. “Especially up north where the ice hasn’t been freezing enough for ice fishing and transportation.”
Trump’s attention, she said, could be a risk. “We want green energy. Trump wants the opposite.”
“He’d drill here if he could,” she added, referring to Greenland’s potential oil reserves. Greenland banned all oil and gas exploration in 2021, citing climate concerns.
Some mining projects have been put on hold over environmental concerns. In 2023 the Greenlandic government halted the large Kvanefjeld mining project because uranium was found alongside the rare earths.
However, Energy Transition Minerals, an Australian-listed explorer which was behind the development and is locked in a legal battle with the government over the issue, has now raised A$9mn for the project after its shares jumped on Trump’s intervention.
Climate change and the potential opening up of new Arctic shipping routes is also making Greenland’s mines more reachable. “Access is a key thing,” 80 Mile’s McIllree said. “Thirty to 50 years ago, many of these places were inaccessible.”
It is also focusing minds on the issue of Arctic security, with competition between the US and China, including over the far north, intensifying.
“Greenland is in an amazing situation where it can leverage one of the world’s superpowers to draw investment into the country, and facilitate independence,” McIllree said.
“It presents a clear and present opportunity for [western governments] to resecure their supply lines. Greenland is the centre of the universe, depending on how you look at the globe.”
Additional reporting by Leslie Hook in London
