I went down the Greenland rabbit hole today after reading your CG post on that topic. Here’s some of what I learned (with help from ChatGPT) that I thought you might find interesting.
The company holding the exploration license for the Kvanefjeld Rare Earths project in Greenland is Energy Transition Minerals Ltd (ETM), a publicly t…
I went down the Greenland rabbit hole today after reading your CG post on that topic. Here’s some of what I learned (with help from ChatGPT) that I thought you might find interesting.
The company holding the exploration license for the Kvanefjeld Rare Earths project in Greenland is Energy Transition Minerals Ltd (ETM), a publicly traded Australian company. They are a very small (28 employees) resource exploration company and have been active in Greenland for over a decade.
Their most recent annual report mentions that they’ve discovered what they believe is “one of the world’s largest deposits of rare earth elements (REEs)”—estimated at around 1 billion tonnes.
The company claims it was granted an exploitation license by the Greenland government, but progress on the project had halted due to a 2021 law passed by Greenland’s legislature banning the extraction of uranium ore. Since the rare earths in the Kvanefjeld deposit are mixed with uranium ore in concentrations above the allowable limits, Greenland with Danish support has effectively blocked further development.
In response, ETM has filed a lawsuit against Greenland and Denmark in the International Arbitration Court in Copenhagen.
If ETM loses in court, they’re likely finished, as the company only has one other project—a lithium deal in southern Spain. But if they win, Greenland (and Denmark) may be faced with two bad choices: either let the project proceed or pay EMT damages. Regardless of what Greenland and Denmark decide under such circumstances, ETM and its Chinese strategic partner would stand to win big.
To give you an idea of what’s a stake financially, ETM claims it has invested $150 million in the project, but their lawsuit seeks $11.5 billion in damages. The damage claim is certainly inflated, but it’s important to note it does not include the profit potential of the downstream activities to be controlled by their Chinese partner.
Speaking of the Chinese partner: ETM’s “strategic partner” is Shenghe Resources, a Chinese rare earth company, acquired a 12.5% stake in Greenland Minerals about a decade ago for just $3.5 million. Shenghe is slated to process all the ores extracted from the Kvanefjeld deposit, thus consolidating Chinese dominance in the REE processing well into the future.
Here’s the kicker: controlling the downstream processing of these rare earth elements also means controlling their marketing. As you know, China already dominates the global REE market. If they gain exclusive access to what ETM’s chair, Sara Kelly, describes as “one of the world’s largest deposits of rare earth elements,” it would, she tells her shareholders, “fundamentally change the balance of the global REE market”. She’s obviously pitching her shareholders for their continued support, but from a geopolitical perspective I don’t think she is far off the mark.
(I can send you a ChatGPT summary of ETM’s legal action against Greenland and Denmark if you’re interested. The text of the EMT complaint is not available from public sources, but is available directly from EMT.)
Now, let’s consider the outcomes.
Without Trump in the picture, most of this might have flown totally under the radar. If ETM’s claims were dismissed, the bliss of our ignorance would have continued. EMT would have quietly gone bankrupt (they reportedly have enough cash to last two more years, which is how long the arbitration process might take). For the Chinese, a loss at arbitration might have stung, but they would still dominate the REE market globally. Meanwhile, Denmark would have continued subsidizing Greenland’s economy (to the tune of ~$600 million annually), and life above the Arctic Circle would go on much as it has for centuries.
On the other hand, had EMT prevailed and the public remained unaware of Chinese efforts to insinuate themselves into Greenland’s mineral development, we might have woken up in a few years with China’s dominance in global REE markets raised to yet a higher, perhaps insurmountable level.
But with Trump’s renewed interest in Greenland and its strategic importance, the stakes are now apparent. A deal involving the U.S., Greenland, and Denmark could dramatically shift the balance of power.
While an outright purchase of Greenland is probably not in the cards, imagine an outcome where Greenland achieves national sovereignty under a commonwealth or condominium arrangement with both the U.S. and Denmark—similar to the Svalbard Treaty of 1920 governing Spitzbergen. The U.S. would provide financial and security guarantees, strengthening Greenland’s independence.
If ETM’s claim were denied under such circumstances, Greenland could still leverage its rare earth deposits with a new, globally-powerful, deep-pocketed partner (the U.S.) committed to their long-term security and economic stability. If ETM won, Denmark would no longer face the dilemma of choosing between paying $11.5 billion or ceding strategic ground to China. The U.S. would likely cover any costs of any damage award to eliminate Chinese influence in Greenland and disrupt China’s global REE monopoly. China would lose big, while Australia gains from the legal success of ETM and its shareholders.
While it’s fun to joke about Trump’s antics, the stakes involved in a deal with Greenland/Denmark are very real. Without Trump’s reemergence on this issue, we might have woken up in a few years in a much worse strategic position than we are today. Whatever deal ultimately emerges between Nuuk, Copenhagen and Washington, it will likely be better than what we might have happened had Mrs. Harris taken the helm.
Scott, I assure you this wasn't flying under the radar of the Defense Department. All of this is extremely well-known to the people who are supposed to know about it. They didn't need Trump to bring it to their attention. They know, and they have known, of Greenland's strategic significance for a very long time: the US invoked the Monroe Doctrine and occupied Greenland during World War II to prevent Germany from using it (Germany was occupying Denmark). And I *guarantee* you they're well aware of the strategically critical minerals there, as well as China's interest in them.
What Trump has succeeded in doing is profoundly alienating both Denmark and Greenland--on whom we are *very* dependent, strategically. That dependence was not a problem whatsoever, given how closely allied we were and still are, on paper. But Trump has forced Denmark to take seriously the possibility that the United States--its ally since the Second World War--could actually invade sovereign territory. They are having ministerial meetings with the highest level right now trying to figure out how to respond to this--and because Denmark is in the EU, so is the entire European Union. As if this was what they needed to worry about right now. (We're actually committed to Greenland's defense--so what would we do, fight ourselves?)
The stupidity of profoundly alienating a country with whom we already had a perfect relationship--and on whom we're so dependent, strategically--is almost unfathomable. It only makes sense if you assume that we're truly planning to invade the place, and therefore need not care what Denmark (and the world) thinks about it. Otherwise it's just an act of shooting ourselves in the foot and in a *very* big way.
Does it need to be said that if we did such a thing we would lose every alliance we have? We wouldn't have a friend in the world. We would be a pariah state. Americans citizens would be welcome nowhere. It would be utterly catastrophic for the United States.
The hatred toward Americans that Trump is engendering by making threats like this will last for a very long time. There's nothing people like less than a powerful bully who threatens to invade and occupy their country.
There are numerous alternatives for a communion between the United States and Greenland that go beyond the limited treaty obligations that have been negotiated. Greenland could become an American State. Alternatively, Greenland could become a Commonwealth ((e.g. Puerto Rico). Another possibility is for Greenland to become a territory (e.g. the U.S. Virgin Islands, the Marshall Islands, etc.). These arrangements gurantee a degree of U.S. sovereignty while also guaranteeing self-rule. All of these options should be explored and the United States should be willing to reward Greenland’s current residents with generous financial compensation. It should be up to Greenland’s citizens to make the decision on which, if any, of these arrangements are satisfactory.
What the United States should not do is be unduly attentive to the desires of Denmark which is little more than a colonial invader. The only exception to this should be if Greenland’s residents desire to continue to be a colony of Denmark, if they do, that desire should be respected.
Greenland does fall within the scope of the Monroe Doctrine. If China or any other adversary of the United States becomes too intertwined with Greenland than that would justify American intervention by any means necessary including military action.
The idea that the United States would be a pariah if it invaded Greenland is incorrect. China invaded Tibet; it’s not a pariah. Russia invaded Ukraine in the most vicious manner. It’s not a pariah either despite the American attempt to turn it into one.
Would India care if the U.S. invaded Greenland? Of course not. How would the EU react; it would do what it always does; mutter underneath its breath and immediately capitulate? What would NATO do? Somehow I doubt it would throw the United States out of the organization and decide to fend for itself.
The attention Trump is paying to Greenland makes the United States stronger not weaker.
Claire, I have just about the same amount of evidence that Trump’s attention to Greenland is making America stronger as you have that an invasion of Greenland would turn the United Ststes into a pariah nation.
Scott, there is actually a pretty widespread view that the Svalbard Treaty gives Russia too much influence over Spitzbergen which would just a be part of NATO member Norway exclusively under Norwegian sovereign control without it.
I actually think one of the key questions is if Greenland wants independence do they want to keep using the Danish Krone closely pegged to the Euro. What will happen to the banking system whose deposits are currently insured by Denmark? Neighboring Iceland has already dealt with the perils of being a small country trying to regulate a banking system(Iceland has its own currency FWIW)
The flip example of the Pacific Islands with Compacts of Free Association with the US which are UN Member States and thus nominal independent but use the US dollar and whose banking systems are covered by the FDIC. On the other hand while the citizens of Free Association Compact nations(which were all originally UN Trusteeships and even earlier League of Nations Mandates like Palestine) have the right to live and work in the US without an immigration visa currently Greenlanders are Danish citizens with all the rights that entails not just in Denmark but the rest of the EU.
Do Americans actually want to extend something like the Compacts of Free Association to new countries with the fiscal costs that entails? Do Greenlanders actually want to be a sovereign nation? Right now Greenland has two MPs in the Danish Parliament. Under the US constitution they would not have the same type of representation short of statehood.
I forgot to add that I’ve been to Greenland too, and again it was a long time ago, but I got the distinct impression from the locals I met that they weren’t very fond of the Dansk. But that was long ago and now that the Danish King has added a polar bear to the Royal Coat of Arms things may have changed. 😉
I’ve been there, although it was three decades ago just as the Berlin Wall was coming down. Russia had two very sad settlements on the main island adjacent to uneconomical coal mines, which exported their output to Mother Russia. Believe me, no one in their right mind wouldn’t have wanted to live there. The Norwegians I spoke with said Russia was there only to keep their legal interests in the area intact. At that time the Russians had no impact on the local economy, no say over who came or went, no infrastructure of any importance to anybody. They were there to keep an eye on NATO, but they were probably too drunk most of the time to do much useful surveillance.
Relative to Greenland we need to keep in mind we’re talking about a country with 50,000 people, which is about 40% the size of your neighboring town, Lowell. Any regional NE’ern bank could absorb the Greenland banking system. From an economic standpoint this is not a big deal.
Any deal that gets done should pass a local referendum, but from the US standpoint I think we could absorb the cost of another 50,000 people. We had more than that cross the southern border in September and they didn’t bring control over “one of the world’s largest deposits of rare earth elements” with them.
Greenlanders do not, whatsoever, want to be part of the United States. They have their own identity, they enjoy rights and benefits that American citizens don't, and they don't want to give those up. They are deeply offended by this discussion.
Here's a good article about what we should be pursuing: https://ip-quarterly.com/en/dont-buy-greenland-buy-its-minerals. But we've now made all negotiation more difficult. Both Greenland and Denmark are democracies. It may be that our diplomats can smooth things over with their diplomats. It may be that we can persuade in that China is more of a risk to them than we are. But good luck persuading voters in either country--you can bet that just as in the US, populist politicians there will run on being "tough on the US."
My view is if you believe this region is strategically important(and I believe it is) the first and very necessary step in my opinion is to re-open Keflavik Naval Base in Iceland which was closed in 2006 very mistakenly even at the time according many like my Dad who is a US Navy veteran. Even if you don't believe in a US military presence in Europe my Dad's view was Iceland was fundamentally different and as much about protecting the United States itself as Europe on a strategically located island with little military force of it's own.
Step 2 in my opinion is reversing the decades shutdown of US military facilities in the New England states and the Canadian province of Newfoundland. As I am sure you are aware many military bases have closed in the 6 New England states like Fort Devens, Pease AFB, Loring AFB, Weymouth Naval Air Station, etc. or have been converted to non operational roles such as Hanscom AFB and Newport Naval Station. This needs to be reversed partially in order for the US to send a signal of the importance of the North Atlantic along with perhaps a return of the US military presence in Newfoundland and Labrador.
Thirdly before any political change in Greenland occurs the US has to get super serious about Icebreakers and the merchant marine(Jones Act in particular).
Claire,
I went down the Greenland rabbit hole today after reading your CG post on that topic. Here’s some of what I learned (with help from ChatGPT) that I thought you might find interesting.
The company holding the exploration license for the Kvanefjeld Rare Earths project in Greenland is Energy Transition Minerals Ltd (ETM), a publicly traded Australian company. They are a very small (28 employees) resource exploration company and have been active in Greenland for over a decade.
Their most recent annual report mentions that they’ve discovered what they believe is “one of the world’s largest deposits of rare earth elements (REEs)”—estimated at around 1 billion tonnes.
The company claims it was granted an exploitation license by the Greenland government, but progress on the project had halted due to a 2021 law passed by Greenland’s legislature banning the extraction of uranium ore. Since the rare earths in the Kvanefjeld deposit are mixed with uranium ore in concentrations above the allowable limits, Greenland with Danish support has effectively blocked further development.
In response, ETM has filed a lawsuit against Greenland and Denmark in the International Arbitration Court in Copenhagen.
If ETM loses in court, they’re likely finished, as the company only has one other project—a lithium deal in southern Spain. But if they win, Greenland (and Denmark) may be faced with two bad choices: either let the project proceed or pay EMT damages. Regardless of what Greenland and Denmark decide under such circumstances, ETM and its Chinese strategic partner would stand to win big.
To give you an idea of what’s a stake financially, ETM claims it has invested $150 million in the project, but their lawsuit seeks $11.5 billion in damages. The damage claim is certainly inflated, but it’s important to note it does not include the profit potential of the downstream activities to be controlled by their Chinese partner.
Speaking of the Chinese partner: ETM’s “strategic partner” is Shenghe Resources, a Chinese rare earth company, acquired a 12.5% stake in Greenland Minerals about a decade ago for just $3.5 million. Shenghe is slated to process all the ores extracted from the Kvanefjeld deposit, thus consolidating Chinese dominance in the REE processing well into the future.
Here’s the kicker: controlling the downstream processing of these rare earth elements also means controlling their marketing. As you know, China already dominates the global REE market. If they gain exclusive access to what ETM’s chair, Sara Kelly, describes as “one of the world’s largest deposits of rare earth elements,” it would, she tells her shareholders, “fundamentally change the balance of the global REE market”. She’s obviously pitching her shareholders for their continued support, but from a geopolitical perspective I don’t think she is far off the mark.
(I can send you a ChatGPT summary of ETM’s legal action against Greenland and Denmark if you’re interested. The text of the EMT complaint is not available from public sources, but is available directly from EMT.)
Now, let’s consider the outcomes.
Without Trump in the picture, most of this might have flown totally under the radar. If ETM’s claims were dismissed, the bliss of our ignorance would have continued. EMT would have quietly gone bankrupt (they reportedly have enough cash to last two more years, which is how long the arbitration process might take). For the Chinese, a loss at arbitration might have stung, but they would still dominate the REE market globally. Meanwhile, Denmark would have continued subsidizing Greenland’s economy (to the tune of ~$600 million annually), and life above the Arctic Circle would go on much as it has for centuries.
On the other hand, had EMT prevailed and the public remained unaware of Chinese efforts to insinuate themselves into Greenland’s mineral development, we might have woken up in a few years with China’s dominance in global REE markets raised to yet a higher, perhaps insurmountable level.
But with Trump’s renewed interest in Greenland and its strategic importance, the stakes are now apparent. A deal involving the U.S., Greenland, and Denmark could dramatically shift the balance of power.
While an outright purchase of Greenland is probably not in the cards, imagine an outcome where Greenland achieves national sovereignty under a commonwealth or condominium arrangement with both the U.S. and Denmark—similar to the Svalbard Treaty of 1920 governing Spitzbergen. The U.S. would provide financial and security guarantees, strengthening Greenland’s independence.
If ETM’s claim were denied under such circumstances, Greenland could still leverage its rare earth deposits with a new, globally-powerful, deep-pocketed partner (the U.S.) committed to their long-term security and economic stability. If ETM won, Denmark would no longer face the dilemma of choosing between paying $11.5 billion or ceding strategic ground to China. The U.S. would likely cover any costs of any damage award to eliminate Chinese influence in Greenland and disrupt China’s global REE monopoly. China would lose big, while Australia gains from the legal success of ETM and its shareholders.
While it’s fun to joke about Trump’s antics, the stakes involved in a deal with Greenland/Denmark are very real. Without Trump’s reemergence on this issue, we might have woken up in a few years in a much worse strategic position than we are today. Whatever deal ultimately emerges between Nuuk, Copenhagen and Washington, it will likely be better than what we might have happened had Mrs. Harris taken the helm.
Best,
Scott
Scott, I assure you this wasn't flying under the radar of the Defense Department. All of this is extremely well-known to the people who are supposed to know about it. They didn't need Trump to bring it to their attention. They know, and they have known, of Greenland's strategic significance for a very long time: the US invoked the Monroe Doctrine and occupied Greenland during World War II to prevent Germany from using it (Germany was occupying Denmark). And I *guarantee* you they're well aware of the strategically critical minerals there, as well as China's interest in them.
But we don't need a deal with Greenland. We have one already: https://avalon.law.yale.edu/20th_century/den001.aspv.
What Trump has succeeded in doing is profoundly alienating both Denmark and Greenland--on whom we are *very* dependent, strategically. That dependence was not a problem whatsoever, given how closely allied we were and still are, on paper. But Trump has forced Denmark to take seriously the possibility that the United States--its ally since the Second World War--could actually invade sovereign territory. They are having ministerial meetings with the highest level right now trying to figure out how to respond to this--and because Denmark is in the EU, so is the entire European Union. As if this was what they needed to worry about right now. (We're actually committed to Greenland's defense--so what would we do, fight ourselves?)
The stupidity of profoundly alienating a country with whom we already had a perfect relationship--and on whom we're so dependent, strategically--is almost unfathomable. It only makes sense if you assume that we're truly planning to invade the place, and therefore need not care what Denmark (and the world) thinks about it. Otherwise it's just an act of shooting ourselves in the foot and in a *very* big way.
Does it need to be said that if we did such a thing we would lose every alliance we have? We wouldn't have a friend in the world. We would be a pariah state. Americans citizens would be welcome nowhere. It would be utterly catastrophic for the United States.
The hatred toward Americans that Trump is engendering by making threats like this will last for a very long time. There's nothing people like less than a powerful bully who threatens to invade and occupy their country.
There are numerous alternatives for a communion between the United States and Greenland that go beyond the limited treaty obligations that have been negotiated. Greenland could become an American State. Alternatively, Greenland could become a Commonwealth ((e.g. Puerto Rico). Another possibility is for Greenland to become a territory (e.g. the U.S. Virgin Islands, the Marshall Islands, etc.). These arrangements gurantee a degree of U.S. sovereignty while also guaranteeing self-rule. All of these options should be explored and the United States should be willing to reward Greenland’s current residents with generous financial compensation. It should be up to Greenland’s citizens to make the decision on which, if any, of these arrangements are satisfactory.
What the United States should not do is be unduly attentive to the desires of Denmark which is little more than a colonial invader. The only exception to this should be if Greenland’s residents desire to continue to be a colony of Denmark, if they do, that desire should be respected.
Greenland does fall within the scope of the Monroe Doctrine. If China or any other adversary of the United States becomes too intertwined with Greenland than that would justify American intervention by any means necessary including military action.
The idea that the United States would be a pariah if it invaded Greenland is incorrect. China invaded Tibet; it’s not a pariah. Russia invaded Ukraine in the most vicious manner. It’s not a pariah either despite the American attempt to turn it into one.
Would India care if the U.S. invaded Greenland? Of course not. How would the EU react; it would do what it always does; mutter underneath its breath and immediately capitulate? What would NATO do? Somehow I doubt it would throw the United States out of the organization and decide to fend for itself.
The attention Trump is paying to Greenland makes the United States stronger not weaker.
What's your evidence for it making us stronger?
Claire, I have just about the same amount of evidence that Trump’s attention to Greenland is making America stronger as you have that an invasion of Greenland would turn the United Ststes into a pariah nation.
Scott, there is actually a pretty widespread view that the Svalbard Treaty gives Russia too much influence over Spitzbergen which would just a be part of NATO member Norway exclusively under Norwegian sovereign control without it.
I actually think one of the key questions is if Greenland wants independence do they want to keep using the Danish Krone closely pegged to the Euro. What will happen to the banking system whose deposits are currently insured by Denmark? Neighboring Iceland has already dealt with the perils of being a small country trying to regulate a banking system(Iceland has its own currency FWIW)
The flip example of the Pacific Islands with Compacts of Free Association with the US which are UN Member States and thus nominal independent but use the US dollar and whose banking systems are covered by the FDIC. On the other hand while the citizens of Free Association Compact nations(which were all originally UN Trusteeships and even earlier League of Nations Mandates like Palestine) have the right to live and work in the US without an immigration visa currently Greenlanders are Danish citizens with all the rights that entails not just in Denmark but the rest of the EU.
Do Americans actually want to extend something like the Compacts of Free Association to new countries with the fiscal costs that entails? Do Greenlanders actually want to be a sovereign nation? Right now Greenland has two MPs in the Danish Parliament. Under the US constitution they would not have the same type of representation short of statehood.
Tim,
I forgot to add that I’ve been to Greenland too, and again it was a long time ago, but I got the distinct impression from the locals I met that they weren’t very fond of the Dansk. But that was long ago and now that the Danish King has added a polar bear to the Royal Coat of Arms things may have changed. 😉
Tim,
I’ve been there, although it was three decades ago just as the Berlin Wall was coming down. Russia had two very sad settlements on the main island adjacent to uneconomical coal mines, which exported their output to Mother Russia. Believe me, no one in their right mind wouldn’t have wanted to live there. The Norwegians I spoke with said Russia was there only to keep their legal interests in the area intact. At that time the Russians had no impact on the local economy, no say over who came or went, no infrastructure of any importance to anybody. They were there to keep an eye on NATO, but they were probably too drunk most of the time to do much useful surveillance.
Relative to Greenland we need to keep in mind we’re talking about a country with 50,000 people, which is about 40% the size of your neighboring town, Lowell. Any regional NE’ern bank could absorb the Greenland banking system. From an economic standpoint this is not a big deal.
Any deal that gets done should pass a local referendum, but from the US standpoint I think we could absorb the cost of another 50,000 people. We had more than that cross the southern border in September and they didn’t bring control over “one of the world’s largest deposits of rare earth elements” with them.
Greenlanders do not, whatsoever, want to be part of the United States. They have their own identity, they enjoy rights and benefits that American citizens don't, and they don't want to give those up. They are deeply offended by this discussion.
Here's a good article about what we should be pursuing: https://ip-quarterly.com/en/dont-buy-greenland-buy-its-minerals. But we've now made all negotiation more difficult. Both Greenland and Denmark are democracies. It may be that our diplomats can smooth things over with their diplomats. It may be that we can persuade in that China is more of a risk to them than we are. But good luck persuading voters in either country--you can bet that just as in the US, populist politicians there will run on being "tough on the US."
My view is if you believe this region is strategically important(and I believe it is) the first and very necessary step in my opinion is to re-open Keflavik Naval Base in Iceland which was closed in 2006 very mistakenly even at the time according many like my Dad who is a US Navy veteran. Even if you don't believe in a US military presence in Europe my Dad's view was Iceland was fundamentally different and as much about protecting the United States itself as Europe on a strategically located island with little military force of it's own.
Step 2 in my opinion is reversing the decades shutdown of US military facilities in the New England states and the Canadian province of Newfoundland. As I am sure you are aware many military bases have closed in the 6 New England states like Fort Devens, Pease AFB, Loring AFB, Weymouth Naval Air Station, etc. or have been converted to non operational roles such as Hanscom AFB and Newport Naval Station. This needs to be reversed partially in order for the US to send a signal of the importance of the North Atlantic along with perhaps a return of the US military presence in Newfoundland and Labrador.
Thirdly before any political change in Greenland occurs the US has to get super serious about Icebreakers and the merchant marine(Jones Act in particular).
I agree with your Dad.