US President Trump’s idea of buying Greenland may be just an illusion, but the United States is interested in Greenland’s natural resources, especially the rare earth raw materials on the island.
The Financial Times reported that the United States recently signed a memorandum with Greenland on rare earth mining to promote investment in this area. After China hinted that it might limit the export of rare earths to the United States, the United States is working hard to obtain other sources of supply.
Greenland is a self-governing territory of Denmark. The island is estimated to contain 38.5 million tons of rare earth oxides. The total content of rare earths in other parts of the world is only 120 million tons.
Per Kalvig, chief consultant of the Geological Survey of Denmark and Greenland in Denmark, said: “Based on the content of this resource, the agreed output will be considerable.”
Rare earths with 17 chemical elements are difficult to commercialize, but are critical for high-tech applications including electric vehicles, turbofans and military technology. China dominates the global production of rare earths, with more than 70% of rare earths being mined, and a higher proportion of processing is carried out in China.
The two companies located in the best mining rare earth location in Greenland have the need to cooperate with China, and whether Europe and the United States can finally obtain non-Chinese mining rare earth metals to obtain price competitive advantages.
However, industry analysts believe that in terms of the value chain, the rare earth project still inevitably depends on China.
Patrik Andersson, an expert at Aalborg University, said: “Chinese companies are recognized as leaders in the complex technology of rare earth refining for commercial products, and China is the largest market. It is therefore difficult to imagine a rare earth that completely excludes Chinese companies. The project can be successful.”
Greenland Minerals, another Danish rare earth mining group, is the largest shareholder of China’s Shenghe Resources holding company.