Greenland, with its untapped reserves of critical raw materials, is emerging as a key player in the global race for resources needed for the energy transition. The island is rich in rare earth elements, lithium, niobium, hafnium and zirconium—essential materials for everything from electric vehicles and wind turbines to consumer electronics. However, despite the growing demand for these resources, large-scale mining in Greenland faces significant hurdles.
As the world moves towards renewable energy, the demand for raw materials like rare earth elements—used in electric motors, generators, and wind turbines—has surged. Of the 17 rare earth elements, four—dysprosium, neodymium, praseodymium, and terbium—are particularly crucial for the energy transition. Neodymium and praseodymium, for example, are essential for the powerful magnets used in electric motors, while dysprosium and terbium improve their performance and durability. With demand for these metals outpacing supply, nations with access to these resources, such as Greenland, have a strategic advantage.
Greenland’s vast mineral wealth has caught the attention of major industrial powers. The European Union, in a bid to secure a stable supply of critical minerals, recently signed a mining agreement with Greenland, following a similar pact with the United States. While China has also expressed interest, ongoing geopolitical tensions complicate the possibility of such an agreement.
Challenges to large-scale extraction
While the potential for mining in Greenland is considerable, several obstacles stand in the way of rapid development. The harsh Arctic climate is a significant factor. Much of the northern coastline is covered in sea ice for much of the year, making extraction expensive and logistically challenging. The southern part of Greenland, where ice-free fjords open in the summer, offers more favorable conditions, yet even here, ice floes and harsh winter weather can block transport routes, requiring costly on-site storage solutions.
“The costs are far too high in the north,” says Flemming Getreuer Christiansen, a geoscientific consultant with expertise in Greenland’s mining industry. “The concentration of rare earths in the region’s ore is low, and extracting them could be prohibitively expensive.” Southern Greenland shows more promise in terms of resource potential, but even these deposits present challenges due to their lower concentration of rare earth elements, which increases extraction costs.
Political and environmental concerns
In addition to logistical and technical challenges, political and environmental factors complicate the path forward for mining in Greenland. Environmental concerns are significant, particularly with regard to potential pollution risks, the impact of mining on Greenland’s pristine ecosystems, and the increased shipping traffic that could disrupt the local fishing industry, a vital part of the Greenlandic economy.
The EU’s mining agreement with Greenland emphasizes sustainability, and resource extraction will proceed only under strict environmental conditions. However, these conditions may limit the speed and scope of mining operations. There are also concerns among local communities and environmental groups about the long-term consequences of expanded mining activities.
Greenland’s political landscape further complicates matters. The desire for economic independence from Denmark has driven the government to seek greater control over its resources, but this has led to a polarized debate over mining. A significant legal dispute erupted in 2021 when the Greenland government banned uranium mining, a decision that impacted Australian company Greenland Minerals’ rights to the Kuannersiut project, which it had spent 15 years developing. The company has since sought $11.5 billion in compensation, casting uncertainty over future investment in the region.
Future prospects and the road ahead
Despite these challenges, Greenland’s potential as a supplier of critical minerals remains significant. However, experts caution that a mining boom is still far off. “It will take many years before Greenland earns large amounts from mining,” says Christiansen. “A handful of mines may open within the next 10 to 15 years, but even for the EU, this will be just a small contribution to their overall supply needs.”
For Greenland, the revenue generated from mining may not be enough to achieve full economic independence. While the island’s reserves hold promise, the complexity of extracting and processing these materials, along with the political and environmental hurdles, means that the road to a flourishing mining industry will be long and fraught with challenges.
As Greenland navigates the delicate balance between economic development and environmental protection, it remains to be seen how its rich mineral resources will shape its future. For now, the promise of Greenland’s untapped reserves remains a tantalizing but distant prospect.
