Rare Earth Exchanges

Greenland, Rare Earths, and a Rising US-Denmark Divide

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Highlights

  • President Trump’s attempt to purchase Greenland from Denmark sparks international diplomatic tensions and strategic resource debates.
  • Greenland’s rare earth elements represent a critical geopolitical asset, with China currently dominating global processing and refining capabilities.
  • The US lacks the infrastructure to immediately capitalize on Greenland’s resources, making the proposed acquisition more symbolic than strategically practical.

Tensions between Denmark and the United States have escalated after President Donald Trump’s renewed push to acquire Greenland, sparking concerns across Europe about US foreign policy under his second term. During a heated phone exchange, Danish Prime Minister Mette Frederiksen firmly rejected Trump’s bid to purchase Greenland, making it clear that the Arctic territory is not for sale. However, Trump’s insistence has sent shockwaves through transatlantic relations, with European diplomats calling the conversation “horrendous” and “a cold shower.”

A Precedent, But…

While the US has a long history of securing strategic deals in Greenland—dating back to World War II and the Cold War—the geopolitical landscape has shifted. Denmark is marching toward a green energy future, aligning with European initiatives to curb carbon dependency and expand renewable energy infrastructure. China has even aligned with this mission.  Meanwhile, Trump’s administration is doubling down on fossil fuel extraction with an aggressive “drill, baby, drill” strategy that puts carbon-heavy industries back at the forefront.

Rare Earth Wonderland

Greenland plays a crucial role in both visions but for different reasons. The island is rich in rare earth elements (REEs), which are critical for green technologies such as wind turbines and electric vehicles but also essential for defense systems, advanced electronics, and the automotive industry. Trump’s pursuit of Greenland is framed as a national security move, particularly as China and Russia increase their Arctic presence. However, there’s a critical flaw in the US strategy: securing Greenland’s rare earth deposits will not immediately help American industry.

Rare Earth Realities

China dominates 90% of the global rare earth refining and processing capacity, controlling the value-added production of key components like magnets. Even if the US were to gain access to Greenland’s resources, it lacks the infrastructure to refine and manufacture them domestically, meaning it would still have to rely on China or build a rare earth supply chain from scratch—a process that could take a decade or more. Furthermore, an influx of Greenland’s rare earths could create a global surplus, driving down prices, which China, with its state-backed enterprises, could easily absorb, whereas private Western companies might struggle to compete and even collapse.

The fundamental question remains: Is Trump’s Greenland push a strategic move or a symbolic power play? His administration seems to view Greenland as a quick-fix solution to rare earth dependence without addressing the lack of US refining capacity or China’s ability to undercut Western rare earth production. Meanwhile, Denmark faces a delicate balancing act: managing its Arctic sovereignty, green energy commitments, and growing international interest in Greenland’s vast resources.

Major Investment in Processing, Refining & Value added Production

If the US wants to seriously compete in the rare earth race, Greenland alone won’t be the answer—America must invest in refining, processing, and domestic manufacturing capabilities. Without these key steps, Trump’s vision for Greenland may be little more than a geopolitical tug-of-war with no tangible benefits for American industry, aside from, of course, the strategic Arctic sea lanes.

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