Vice President JD Vance's last minute decision to accompany his wife, Usha Vance, the second lady of the United States, who quickly eased Washington's Arctic strategy during a controversial trip to Greenland. The trip was conducted in the president's comments and the United States must “get” the island, with the Danish prime minister accusing the United States of putting “unacceptable pressure” on it.
Greenland is the largest island in the world and is a semi-autonomous territory owned by Denmark, with 80% of its land covering thick ice, with only 56,000 people remaining, mainly indigenous backgrounds. It has been at the heart of global geopolitics for years, but now enjoys a new spotlight as the White House is expected to make it part of the United States by purchasing or annexation.
Western countries hope Greenland can provide China with a balance because it has the world's largest reserves of rare earth minerals. China controls about 70% of production and 90% of processing, giving it a geopolitical “monopoly” throughout the value chain. Rare earth minerals are crucial to the production of 21st century technologies such as batteries, electric vehicles and modern defense equipment. A 2023 survey found that 25 of the 34 key raw materials in Greenland were identified by the European Commission. Some people expect Greenland's total mineral resources to be worth $4.4 trillion north, although only a small fraction (about $186 billion) can be extracted cost-effectively.
Greenland has a GDP of only $3.2 billion, only a small portion of its land can be reserved on its land and relies on the high economic fluctuations of the fishing industry. Greenland also depends on the generosity of the Danish government: about 20% of the economy is welfare. Denmark sends about $8,000 per Greenland to the island and provides half of the Greenland government's income, which in turn is used to employ about 40% of the island's labor force. Currently, if Greenland is independent (with extensive support within the territory), this source of income needs to be replaced. The White House has not commented on whether to pick up the label.
Greenland's leaders have shown interest in investing in the country's mining industry. However, they have strict restrictions on allowing companies to enter the space. In 2021, Greenland Prime Minister Múte Bourup Egge banned extraction, which could lead to uranium exploitation of more than 100 ppm (one per thousand). While uranium exposure is a legal risk, many programs protect workers and the environment’s health and safety; about 200 tons of toxic waste are generated per ton of rare earth minerals mined. Advanced mitigation strategies have been used for 40 years. The ban could be overturned as companies work hard to ensure that the Greenland government can work safely. Greenland's harsh conditions make it difficult to move heavy materials, fly helicopters or house workers near the site.
While owning Greenland would give the United States full control of the island, it could still use its economy and capital to inspire the country to adopt a more commercially friendly mining approach. The Biden administration, the EU and China are all trying to compete for Greenland's influence. Joe Biden's White House often pushes Danish territory to provide more mining investment and expand the presence of the U.S. military. Meanwhile, China often attempts to expand its business impact on the island, and the United States and the European Union try to reduce the island.
Getting exclusive visits in Greenland or elsewhere (the United States also hopes to reach an agreement with Ukraine and the Democratic Republic of the Congo) may not solve the White House’s problems. Although the United States is the second largest producer of rare earth minerals, it still accounts for only 12% of the world's supply, it exports two-thirds of its rare earths to China for processing and refining. China's most advanced refineries can turn ore into the final product exported to the United States (such as magnets), a capability that American producers lack. Ultimately, the US's winning of my rights in Greenland may be just another victory for China.
