Business journalist
President Donald Trump has said he thinks the US will gain control of Greenland, underscoring a claim on the Arctic island that he has made several times recently, once citing “economic security” as the reason. Although the autonomous Danish territory was quick to say it was not for sale, its vast and largely untapped mineral resources are in high demand.
The Jagged Gray Peaks suddenly appear before us as the motorboat heads into the coastal water slopes and dramatic fjords at the southern tip of Greenland.
“Those very high pointed mountains, it’s basically a gold belt,” gestures Eldur Olafsson, CEO of mining company Amaroq Minerals.
After sailing for two hours, we stepped ashore in a remote valley below Nalunaq Mountain, where the company is drilling for gold.
It is also clearing the surrounding mountain ranges and valleys, hunting for other valuable minerals, after taking up exploration licenses that range over 10,000 square kilometers (3,861 sq mi).
“We’re looking for copper, nickel and rare earths,” says the Icelandic boss. “This is unauthorized and still has the potential to have more large deposits.”
The base camp is a collection of mobile buildings and bright orange tents to house more than 100 personnel, including Greenlanders, Australians and British ex-coal miners. From there, the road climbs up to the valley, and we drive the car into the gold mine, following a dark tunnel up inside the mountain.
“Look here!” Mr. Olafsson says, pointing to a seam of white quartz and a thin dark line. “Gold, gold, gold. All the way. Isn’t that remarkable?”
The mine, which was acquired by Amaroq in 2015, had been operating for most of the previous decade but was shut down due to falling gold prices and high operating costs.
Amaroq is confident that the mine will now be profitable. And this year, he plans to ramp up production, where he’s built a brand new processing plant to break down the ore and refine the precious metal into gold bars.
“We can walk away every month with a chest of gold, opposite a 30,000-ton ship [carrying the ore]”explains Mr. Olafsson.
He says Greenland offers an unrivaled opportunity because its vast mineral reserves are largely untouched.
“It can be the supplier of all the minerals the Western world will need for decades,” adds Mr. Olafsson. “And that’s a very unique position.”
However, there are currently only two active mines on the entire island.
Greenland is a self-governing territory that is part of Denmark, but controls its own natural resources.
It is endowed with the eighth largest reserves of the so-called rare earth elements, which are vital for making everything from mobile phones to batteries and electric motors. It also has large amounts of other key metals, such as lithium and cobalt.
There is also oil and gas, but new drilling is prohibited, while deep sea blasting is also ruled out.
Christian Kjeldsen, director of the Greenland Business Association, says the global “geopolitical situation is currently driving interest in the world’s largest island”.
He points out that China has the world’s largest reserves of rare earth metals, while the West wants to secure alternative supplies.
“You have a very strong China sitting very strongly on critical raw materials,” he says.
This prompted a growing focus among Western nations to gain access to Greenland’s minerals. China also wants to get involved, but its presence is limited.
Reuters Recently reported That the US lobbied an Australian mining company not to sell Greenland’s largest rare earth project to potential Chinese buyers.
Greenland’s Minister for Business, Trade and Resources, Naaja Nathanielsen, says interest in the territory’s minerals has “absolutely increased over the last five years”.
He adds: “We are used to being the focal point of the climate crisis. We want to be part of the solution.”
Permits have now been granted for 100 blocks in Greenland, where companies are looking for viable deposits. British, Canadian and Australian mining companies are the largest holders of foreign licenses, while the Americans hold only one.
But there are many more steps before these places become potential landmines.
Still, while Greenland may be sitting on a wealth of minerals, any “gold rush” remains slow to materialize.
The economy, which has an annual GDP of just over $3bn (£2.4bn), is still driven by the public sector and fishing. And the territory also relies on an annual subsidy of $600 million from Denmark.
Greenland’s politicians hope the mining revenue will reduce reliance on a $600 million annual subsidy from Denmark and help boost independence efforts. But in the meantime, Greenland makes more money from tourism.
Official mining is still important for independence, says Javier Arnaut, head of arctic social sciences at the University of Greenland. “But in practical terms, you can see very few mining permits being granted.”
Ms. Nathanielsen admits that while partnerships with the US and the EU are developing, “we still haven’t seen large amounts of money pouring into the sector.” He hopes there will be three to five more mines in the next decade.
However, mining is not easy in Greenland due to its remote geography and weather. It is the world’s largest island, and 80% is covered by an ice sheet. It has rugged mountains and no roads between settlements.
“It’s arctic terrain,” says Jakob Kløve Keiding of the Geological Survey of Denmark and Greenland, who mapped the territory’s deposits. “We have problems with difficult conditions in terms of climate and limited infrastructure. So it is quite expensive to open a mine.”
Those high costs, along with low global metal prices, kept investors at bay.
Others blame bureaucracy for the slow growth of the sector. The territory has strict environmental regulations and social impact requirements, and obtaining permits can take time.
Ms Nathanielsen says most communities support mining and that it strengthens the local economy. “They [overseas miners] they shop at the local store. They employ local employees. Charterers do a local boat or helicopter,” she says.
However, in the largest southern city, Qaqortoq, resident Heidi Mortensen Møller is skeptical that the new mines will bring employment to the locals. “When they say they’re going to add jobs, who are they talking about?”
Jess Berthelsen, head of the local union, Sik, says many people think mining revenue will “leave the country” rather than benefit Greenland. But he supports the growth of the sector. “Greenland needs more income and money to be made in ways other than fishing.”
It’s not clear how Trump’s latest Greenland Gambit will play out. However, the territory’s Prime Minister Niem Egede said earlier this month that “we have to do business with the US” and that “the door is open in terms of mining”.
Mr Kjeldsen, from the Business Association, hopes it will bring “much-needed investment” to the sector. “On the other hand, if the uncertainty surrounding the signal from Trump’s withdrawal is prolonged, there is a risk that it could negatively affect the investment environment.”
