Highlights
- The United States and Denmark blocked Chinese firms from acquiring a significant rare earths deposit in Greenland through Tanbreez Mining.
- Critical Metals acquired the deposit, aiming to develop non-Chinese sources of critical minerals for defense applications.
- Despite the diplomatic success, challenges remain in developing Western rare earth processing capabilities.
- China currently maintains 90% market control in rare earth processing.
The United States, in coordination with Danish officials, successfully lobbied Greenland’s largest, rare earths developer, Tanbreez Mining (opens in a new tab), to avoid selling its deposit to China-linked buyers.
National Interests in a Resurgent Economic Nationalist Era?
As Reuters reported (opens in a new tab) earlier in January, Tanbreez, which controls a vast deposit containing 30% heavy rare earths critical for defense applications, was acquired (opens in a new tab) by New York-based Critical Metals despite significantly higher offers from Chinese firms. This deal represents a strategic victory for Washington, reinforcing its efforts to secure non-Chinese sources of critical minerals amid rising geopolitical tensions.
The U.S. has struggled to counter China’s rare earth dominance, particularly in Africa, but Greenland’s geopolitical position—under Danish oversight—has provided a more favorable battleground. The Trump administration’s renewed focus on Greenland, underscored by Donald Trump Jr.’s private visit to Nuuk, signals a broader strategy to expand Western mining investment and establish a supply chain independent of Beijing.
Critical Metals is now engaging with major U.S. defense contractors, including Lockheed Martin, RTX, and Boeing, and has applied for Pentagon funding to develop a U.S.-based rare earths processing facility. This is a key challenge given that China controls about 90% of rare earth separation, processing, and overall refining, not to mention the value-added production of products such as magnets.
Importantly the funding process has stalled amid the presidential transition, leaving uncertainty over whether Trump’s administration will follow through.
What’s Going on?
While the report highlights U.S. diplomatic success, it glosses over Denmark’s long-term stance on Greenland’s resource sovereignty and whether it fully aligns with U.S. ambitions. Additionally, while China is framed as the primary competitor, little analysis is provided on whether Western companies have the financial and technical capability to challenge China’s rare earth processing supremacy.
The potential for Greenland’s deposits to become a viable alternative to China’s highly integrated, state-backed rare earth supply chain remains uncertain. According to experts in this, field, who spoke on condition of anonymity,, it would take a Western effort several years to match Chinese capability.
More Questions than Answers
Will Trump’s administration provide the necessary funding and infrastructure support to make this Greenland venture viable? Can Critical Metals and other Western firms develop refining capacity at a scale that truly counters China’s monopoly?
And if not China, could other foreign entities, such as European or Japanese firms, step into Greenland’s resource sector? Without a clear roadmap for processing and refining rare earths outside of China, this deal may be more symbolic than transformative for Western supply chain independence.
It must be recognized that, given the true reality of rare earth and critical mineral dynamics, free market solutions alone are unlikely to resolve this challenge.
Daniel
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