Why does Trump want Greenland? The economic value of the Arctic

U.S. President Donald Trump’s second term begins with a return to the idea of acquiring Greenland for the United States. The idea itself and the way it will be implemented are highly controversial, but the key question remains why Trump wants Greenland and how much the world’s largest island is really worth. Paradoxically, there are many indications that its value is rising under the influence of climate change.

A brief political context of the Greenland scandal

Recall that Greenland is an autonomous dependent territory of Denmark, a result of its colonization in the 18th century. In the course of political perturbations related to the German occupation of Europe during World War II, the United States pledged to protect Greenland in exchange for the right to build and maintain its own base there. Even after the war, there was also the first proposal for the Americans to buy the island – so Donald Trump’s idea is not new.

The establishment of NATO in 1949 sanctioned the presence of U.S. troops in Greenland, and Denmark and the United States signed an agreement to that effect, which was revised in 2004. Recent amendments included the priority of environmental protection and the right of the island’s self-government to be consulted on military operations being carried out. In 2019, during his first term, President Donald Trump proposed to the Danes to buy back Greenland, which was categorically refused.

The current second attempt has a slightly more worrisome tone, as the new president has not ruled out the use of military or economic pressure in his statements. In his view, the Arctic island is crucial to the security of the United States, but many experts also point to Greenland’s economic importance.

Fossil fuels in Greenland

The entire territory of Greenland, including offshore islands and glaciers, is as much as 2.166 million square ^kilometers – but the area is inhabited by only 56,000 people. individuals. Most of them are descendants of the Inuit who migrated from North America in the 13th century, and they occupy up to 20 percent of the island. All the rest, meanwhile, harbor raw materials of great economic importance.

According to a U.S. geological survey conducted in 2007, there are as many as 31.4 billion barrels of oil conversion in the area up to 500 meters off the east coast of Greenland. In the west, on the other hand, there are expected to be about 18 billion. Between 2002 and 2014, more than 20 oil and gas production licenses were issued. However, after decades of exploitation failures, Greenland’s socialist government decided in 2021 to end extraction activities, citing the need to protect the environment and Arctic fisheries. There is legitimate concern that a takeover of the island by Donald Trump, who has made no secret of his support for fossil-fuel-based economic development, would be a step toward environmental disaster in the north.

Rare earth metals – more important than gold

Greenland’s most significant natural wealth is its minerals, which are locked in a geological structure that is almost 4 billion years old. In addition to deposits of gold and platinum, precious ores that are always in demand, the island is also home to deposits of industrially valuable rare metals such as zinc, iron, copper, nickel and uranium. According to a geological analysis conducted in 2023 by scientists from Denmark and Greenland, most of the raw materials considered critical by the European Commission are located here.

Gardar province in the southern part of the island is considered to be a particularly rich area, where economically important deposits of lithium, fluorite, tantalum, niobium, hafnium and zirconium have been located. It is noteworthy that the price of hafnium, which is used in aerospace and industrial alloys, semiconductor production and nuclear reactor construction, has risen as much as 400 percent in one year. The global lithium market is expected to grow from $4.2 billion in 2023 to $6.68 billion in 2030, mainly due to demand from the development of alternative energy sources and the associated demand for batteries.

Very large deposits of molybdenum, which is used extensively in the steel industry, have been identified in eastern Greenland, as well as strontium, vanadium, titanium and platinum. In the southwest, on the other hand, phosphorus, feldspars, graphite and rare earth elements (REEs) are projected. The latter, which include all lanthanides and two scandiums, are being discovered in various regions of the island and represent one of Greenland’s most important economic assets.

Rare earth elements are raw materials with a very limited global supply and exponentially growing demand – they are used to make batteries, ceramics and permanent magnets, among other things. Currently, China is the leading producer of REEs, and European and American industries depend on imports from the Middle Kingdom. Of particular importance for technological development are dyprosium, neodymium, praseodymium and terbium, crucial for the production of electric cars, wind turbines and military equipment. All four can be found right here in Greenland, although their extraction is likely to be difficult and expensive.

The economic significance of the climate crisis

Exploration and exploitation of Greenland’s mineral deposits is hampered by its harsh climate and thick ice cover. Glaciers block access to most fjords for most of the year, complicating the transportation of raw materials and increasing operating costs by the need to store them on land. However, climate change, while so disastrous globally, in Greenland is becoming an opportunity to make the mining industry more profitable and efficient. It is even believed that the number of mines on the island will increase markedly in the next 10-15 years.

Not insignificant is the fact that Greenland is one of the bridgeheads opening the way to the North Pole, which Denmark, Russia and Canada have been vying for dominance over for years. So far, the law protects the Arctic as an area of international waters, but the prospect of the Transpolar Seaway being made more accessible by the thawing of the ice is rekindling ambitions and a desire to seize the oil, gas and precious mineral deposits of the farthest north. Global warming also raises the prospect of launching stable and safe shipping in the Arctic Ocean, thus bypassing the Suez and Panama canals and reducing transportation costs. Greenland may thus become the key to maritime travel in the northern hemisphere in the future, both commercially and militarily.

Climate change could also support Greenland’s fishing industry, which is already a major local export industry and a source of livelihood for many local communities. As waters warm in the oceans around the island, new species of fish such as herring, rays and mackerel are emerging. This is another economic asset for the Arctic island.

Geopolitical importance of Greenland

There is no denying that Nuuk, Greenland’s capital, is geographically closer to New York than Copenhagen. The entire island, meanwhile, occupies a unique position between the US and Europe, and China has also shown interest in it for years. Having radar and monitoring and warning systems here is an obvious strategic advantage. When the aforementioned economic potential is added, Trump’s motives, though difficult to accept, become quite obvious.

What do Greenlanders have to say about it? The proud descendants of the Inuit do not want to be dependent on either the Americans or the Danes. Above all, they want to preserve the natural qualities of their frigid island, which attracts more and more tourists every year, and where more than 75 percent of energy comes from water. The question remains whether Greenland will retain its unique icy character despite the political and economic pursuits of the great powers.

pic. main: Thomas_Ritter / pixabay