The United States is making noises about Greenland again. The vast island’s natural resources are back on the agenda, a year after then-US national security adviser Michael Waltz announced: “This is about critical minerals. This is about natural resources.”
Greenland is endowed with both fossil fuels and critical raw materials. It owns at least 25 of the 34 raw materials considered critical by the European Union.
The EU Critical Raw Materials Act of 2024 seeks to improve the security of European supply of these items, and both Trump and the EU want to weaken Chinese dominance in this trade. Meanwhile, large quantities of oil are found offshore in eastern and western Greenland.
The value of these resources is difficult to estimate, as oil and critical raw material prices fluctuate wildly. As with Venezuelan oil, it will take an enormous amount of money to build the infrastructure necessary to extract Greenland’s natural resources. Mining and fossil fuel projects are capital intensive, requiring large upfront investments with long lead times before the projects generate profits.
Outside of its capital, Nuuk, Greenland has almost no road infrastructure and limited deep-water ports for large oil tankers and container ships.
Around the world, private mining and fossil fuel companies can exploit public infrastructure such as roads, ports, power generation, housing and skilled workers to make their operations profitable. In Greenland, an enormous capital investment would be required to extract the first truckload of minerals and the first barrel of oil.
Therefore, the government faces a classic dilemma. Let private multinationals extract but lose most of the revenue? Or they insist on state ownership but struggle to find the capital and state capacity to enable extraction.
Mining, past and present
Greenland’s mineral riches have been known for a long time. In April 2025, Danish state broadcaster DR aired a documentary about how Denmark had historically diverted profits from a cryolite mine in Greenland.
The program caused a major political and media crisis, with some believing it challenged the perception that Greenland was economically dependent on Denmark. Minerals are a prominent but sensitive issue in Greenland’s relationship with the rest of the world.
Foreign companies have been trying to establish viable mining industries in Greenland for decades, with little to show for it. In fact, contrary to US President Donald Trump’s claims, US corporations have long had the opportunity to enter Greenland’s mining sector. The capital intensity coupled with extremely harsh weather conditions means that, so far, no company has commenced commercial mining activities.
Greenland’s natural resources minister, Naaja Nathanielsen, said in 2025 that she wanted mining to become a “very good and stable complement” to the country’s overwhelming dependence on the fishing industry.
However, in 2021 Greenland’s new socialist Inuit Ataqatigiit government banned uranium mining over pollution concerns. Australian company Energy Transitions Minerals (ETM) sued Greenland and Denmark in 2023 for 76 billion crowns (£8.9 billion), equivalent to almost four times Greenland’s GDP.
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The mining company claimed to have been stripped of future profits following the cancellation of its Kuannersuit/Kvanefjeld uranium project.
Danish courts have dismissed most of ETM’s claims as unfounded and there have been reported concerns that ETM could declare bankruptcy and thus avoid paying high legal fees. In a statement, ETM said its GM subsidiary “worked in good faith for more than a decade, in close cooperation with the governments of Greenland and Denmark.” He added that both governments had used GM to promote Greenland as a safe destination for mining investors.
But research in 2025 classified similar behaviors as “feigned victimization.” Typically, this occurs when companies perceive or position themselves as victims of unfair processes rather than as powerful participants concerned with profits.
Drilling in the Greenlandic crust would impact Copenhagen, as Greenland has a mining profit-sharing agreement with Denmark. As part of the gradual transfer of autonomy from Denmark, Greenland now retains ownership of its natural resources.
However, Denmark provides an annual block grant of 3.9 billion kroner (about half of Greenland’s state budget) to support the national economy, which is largely made up of fisheries. Denmark will reduce its global subsidy by 50% of mining profits, meaning that mining profits will essentially be split 50-50 between them up to the value of the collective concession.
Australian-American company Critical Metals recently received construction approval for a permanent office for its Tanbreez project supplying rare earth minerals, including heavy rare earth elements, in southern Greenland.
The next day, the mining company Amaroq declared that the United States is considering investing in its mining projects in southern Greenland through EXIM, the US Export-Import Bank. If the state loan is approved, it will be Trump’s first in a mining project abroad.
A recent Trump executive order allocated $5 billion to support mining projects critical to national security. This demonstrates the close relationship between extractive industries and military activity.
Fossil fuel production is less likely to happen anytime soon. In 2021, for environmental reasons, the Greenland government banned fossil fuel exploration and extraction. A parliamentary majority continues to support the ban.
With volatile oil and gas prices and the same climate and infrastructure challenges as for other natural resources, fossil fuel production in Greenland is implausible even in the event of a full US takeover.
There are many reasons why the Trump administration might want to dominate the Arctic, not least to gain relative power over Russia and China. But natural resource extraction probably won’t play a central role.
In addition, the United States already has military bases in Greenland, following a defense agreement with Denmark. The recent moves by the United States are therefore more likely to be yet another chapter in the return of the country’s imperialist ambitions.
*Lukas Slothuus is a Postdoctoral Researcher at the School of Global Studies at the University of Sussex.
This article was originally published on The Conversation/Reuters
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