Rare Earth Exchanges

Greenland, A Big Opportunity – But does the Rare Earth Deposits Lead to True Competition Against China?

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Highlights

  • Greenland contains 25 of 34 critical minerals, potentially offering a strategic alternative to China’s rare earth market control.
  • Large-scale mining operations in Greenland are estimated to be 10-15 years away, with significant technical and environmental challenges.
  • Developing rare earth processing infrastructure is crucial for the West to truly disrupt China’s market monopoly.

Peter Gratton’s article, published on January 28, 2025, in Investopedia, delves into the geopolitical and economic significance of Greenland’s vast rare earth element (REE) deposits. He highlights the growing U.S. and European interest in securing Greenland’s minerals as a counterbalance to China’s near-monopoly on REE production and processing. Beyond mineral wealth, the piece also underscores Greenland’s broader geopolitical importance, including military considerations and ongoing debates over sovereignty. However, while the article presents Greenland as a potential solution to the West’s dependency on China, it does not fully grapple with the more significant challenge: the lack of Western infrastructure for refining and processing these materials.

The Case to Make the Move

Gratton builds his case by citing China’s dominance in rare earths, noting that the country controls 70% of global REE production and 90% of processing capacity. This framing positions Greenland’s resources as a crucial alternative. The European Commission has identified that Greenland contains 25 of the 34 minerals deemed essential for advanced technology and defense applications. The global rare earth market reached $320 billion in 2022, with demand for key elements tripling since 2017, suggesting a booming industry eager for alternative sources.

What are the Challenges?

Yet, the author does acknowledge the challenges. Greenland’s ore concentrations are relatively low, between 1% and 6%, making extraction expensive and technically difficult. The Arctic climate compounds the problem, with harsh conditions disrupting operations and making transportation difficult for much of the year. While the Trump administration’s renewed interest in acquiring Greenland and its existing military presence at Pituffik Air Base is mentioned as part of securing access to these minerals, the reality is that large-scale mining operations remain at least 10-15 years away. This long lead time raises serious questions about whether Greenland can play any meaningful role in alleviating near-term supply chain vulnerabilities.

Beware of Assumptions

Despite presenting Greenland as a viable alternative, the article makes several assumptions that warrant scrutiny. It assumes that securing raw materials from Greenland would significantly reduce China’s dominance, yet it does not address the West’s lack of REE refining and processing capacity. Without domestic infrastructure, raw materials extracted in Greenland would still need to be sent abroad—likely to China—for processing.

The article also links U.S. strategic interest in Greenland to the REE race but does not critically assess whether acquiring or developing the region is politically feasible, given Greenland’s firm stance on sovereignty. Furthermore, while Gratton portrays Greenland’s development to disrupt China’s market control, he does not fully explore the ongoing environmental and regulatory hurdles that have historically blocked mining efforts in the region. Local opposition, coupled with Greenland’s strict environmental laws, presents significant roadblocks that could stall or halt extraction efforts entirely.

Additionally, the article does not sufficiently highlight that even if Greenland were to ramp up production, China could still leverage its dominance in REE processing and refining to maintain market control. The Chinese government has already begun implementing policies to consolidate domestic producers, restrict exports, and stockpile reserves. This suggests that simply mining more raw materials outside of China will not be enough to shift the balance of power unless processing capacity is developed elsewhere.

Final Thoughts

Gratton’s article thoroughly examines Greenland’s REE potential and geopolitical stakes, but it ultimately oversimplifies the notion that the island can meaningfully challenge China’s control over the rare earths market in the short term. While data supports Greenland’s mineral wealth, the significant technical, logistical, and regulatory challenges suggest that any real impact is at least a decade away.

The framing of Greenland as a strategic priority for the U.S. and its allies makes sense. Still, the article does not critically evaluate whether this is the best approach to reducing dependency on China. Until Western nations invest in refining and value-added production, securing rare earths from Greenland alone will not be enough to alter the global supply chain dynamic.

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