Greenland’s future is under the microscope as the US government seeks greater influence in the Arctic nation. Pic: Getty Images

Greenland’s strategic location and mineral endowment have come into focus in recent months, attracting interest from the US government
Its untapped rare earths deposits, vital for defence and clean-energy technologies, could position Greenland as a linchpin in Western supply chains
In particular, the Tanbreez deposit in southern Greenland could potentially supply up to 50% of the world’s heavy rare earths – a market currently dominated by China

 

Greenland rarely features in global headlines, but renewed US interest in the Arctic island has pushed it into the geopolitical spotlight, highlighting the nation’s strategic location, military importance, and untapped mineral wealth.

Positioned along the shortest route between the US and both Europe and Russia, it occupies a pivotal place in US defence planning.

America already operates the Pituffik space base in northwest Greenland, a key installation supporting ballistic missile warning, missile defence, and space surveillance missions.

However, the US government appears determined to expand its presence in the territory.

In essence, missiles or aircraft travelling between Russia and North America would likely pass over or near Greenland, giving it strategic importance for early-warning and surveillance systems.

Accordingly, President Trump has cited Greenland’s significance as central to his proposed US$175 billion ‘Golden Dome’ missile defence initiative, which aims to intercept hypersonic, ballistic, and advanced cruise missiles – as well as drones – launched from anywhere in the world, including from space.

However, his recent insistence that the US is prepared to “go as far as we have to” to acquire Greenland from Denmark – an ally and fellow NATO member – sent shockwaves through diplomatic circles.

 

Shifting geopolitical landscape

Under President Trump, the US appears increasingly wary of China’s interest in Greenlandic infrastructure and Russia’s expanding military footprint across the Arctic.

He has previously described Greenland as “critical” to US national interests, warning that “if we don’t go in, Russia’s going to go in, and China’s going to go in.”

However, the scope of America’s future involvement has recently become less clear, following reports that the US and NATO have agreed to a “framework for a future deal” with respect to Greenland.

Nevertheless, US diplomacy is seemingly geared towards keeping Greenland aligned with Western interests.

This concern is not new.

The US explored acquiring Greenland in 1867, again in 1946, and most recently in public discussions in 2019, each time underscoring the island’s strategic value.

Fast forward to today and climate change could be adding fresh urgency.

Melting ice is opening Arctic shipping routes, easing military movement, and unlocking access to some of Greenland’s globally significant mineral resources.

 

Modern-day minerals

Greenland hosts a wide array of commodities, including iron ore, graphite, tungsten, molybdenum, palladium, vanadium, zinc, gold, uranium, and copper.

However, it is rare earths that are now attracting global interest.

This group of 17 elements underpins a wide array of modern-day industries, such as clean energy, electric vehicles, consumer electronics, and defence.

And China dominates the world’s supply chain.

In a nutshell, Beijing controls about 70% of global rare earths production and an even larger share of processing capacity.

This concentration came into focus last October when China expanded its rare earths export controls. It added five more elements to its restricted list and lifted the total to 12.

According to the US Geological Survey, the US relies on China for about 70% of its rare earths imports.

President Trump has moved to address these vulnerabilities through public-private partnerships and international cooperation.

These included an equity investment in New York-listed MP Materials, owner of the only rare earths mine in the US known as Mountain Pass.

The US has also entered bilateral agreements with allies such as Japan and Australia to build rare earths capacity outside China.

However, reshaping the global supply chain will not happen overnight, cautioned European Lithium (ASX:EUR)  executive chair Tony Sage, whose company is advancing the Tanbreez rare earths project in Greenland.

“Geopolitically, it’s complex,” noted Sage in a recent interview with CNBC.

“The US aims to reduce reliance on China, but that will take years. During this time, the US will remain reliant on Chinese supply,” he said.

 

The heavy rare earths advantage

Additionally, not all rare earths are created equal.

Most deposits, including Mountain Pass, are dominated by light rare earths. These minerals are more abundant and typically used in high-volume applications such as catalysts and conventional magnets.

Heavy rare earths, on the other hand, are scarcer and tend to be substantially more valuable. They are commonly used in powerful magnets that can withstand extreme heat, making them indispensable in some military applications.

“Heavy rare earths like terbium, dysprosium, gallium, and niobium are critical for missiles, destroyers, and F-35 fighters,” said Sage.

“Greenland is essential to supplying these heavy materials for both the US military and the EU,” he added.

Against this backdrop, Tanbreez stands out as a project with the potential to reshape global supply chains for these high-performance, strategically critical minerals.

 

Strategic asset

Tanbreez is one of the world’s largest rare earths deposits, operated through a partnership between European Lithium and NASDAQ-listed Critical Metals Corp (CRML).

Geologically, it is somewhat unusual with about 27% of its rare earth content consisting of heavy rare earths.

And once in production, the project has the potential to reshape supply chains for Western markets.

“If we follow the mining plan we’ve shared publicly, we’ll control 50% of the world’s supply of heavy rare earths. Currently, China controls 97%,” explained Sage.

The project’s scale is equally compelling. Tanbreez hosts an estimated 4.7 billion tonne resource, potentially supporting more than a century of mining.

It also boasts year-round direct shipping access via deep-water fjords connected to the North Atlantic Ocean.

“We’re not the only company with rare earths in Greenland, but we’re the only one mining-ready, with an export license granted by the Greenland government,” said Sage.

“Our deposit is highly accessible, easily extractable, and located right on the North Atlantic shipping route.”

“Everything we’ve done over the past two years positions us to begin shipping by 2028.”

 

Momentum building

European Lithium holds a 45% stake in CRML, and investor interest in both companies has been growing.

Shares in European Lithium have rocketed by about 75% so far this year. And CRML has fared even better, soaring by about 175% since the start of January.

This momentum has been reinforced by a recent deal that hints at the strategic significance of Tanbreez.

Earlier this month, CRML executed a non-binding term sheet to form a 50:50 joint venture with Saudi Arabian industrial conglomerate TQB.

Under the agreement, CRML expects to supply about 25% of the rare earths concentrates produced at Tanbreez to a Saudi-based processing facility.

This facility will be tasked with producing separated rare earths oxides, metals, and downstream products, including magnet-grade materials destined for aerospace, defence, and other high-performance applications.

Notably, all finished materials are intended for application in America’s defence industrial complex.

“The establishment of an integrated processing platform in Saudi Arabia not only diversifies global rare earth processing capacity beyond China but also strengthens supply chain security for allied nations across Europe, the Middle East and beyond,” noted Sage.

The deal also points to Greenland’s emerging role in modern-day national security considerations, as well as the importance of its natural resources to the US and the West.

 

 

At Stockhead, we tell it like it is. While European Lithium is a Stockhead advertiser, it did not sponsor this article.