Greenland's Molybdenum Goldmine: A Geopolitical Game-Changer for EU Supply Chains

The European Union's reliance on Chinese molybdenum imports—a critical mineral for defense and green energy—is set to transform with Greenland's approval of a landmark mining project. On June 19, 2025, Greenland granted a 30-year exploitation permit to Greenland Resources Inc. (MOLY) for its Malmbjerg molybdenum and magnesium project. This decision marks a pivotal shift in EU-China supply chain dynamics, offering a strategic alternative to Beijing's dominance in critical minerals.

A Geopolitical Pivot: EU's Dependency on China

The EU currently sources 80% of its molybdenum from China, which controls 87% of global production. China's export restrictions—often wielded as a geopolitical tool—have left European industries vulnerable. Molybdenum, a silvery-white metal, is indispensable for high-performance steels used in aerospace, defense systems, and renewable energy infrastructure. With the EU's defense budget projected to rise from 1.5% to 4% of GDP by 2030, securing domestic or allied supply chains for this metal is no longer optional.

The Malmbjerg project addresses this gap head-on. Over its 20-year operational life, the mine will produce 32.8 million pounds of molybdenum annually, meeting 25% of the EU's annual demand and 100% of its defense-specific requirements. This aligns with the EU's Critical Raw Materials Act, which mandates diversification of supply chains for minerals deemed vital for security and green transitions.

The Investment Thesis: MOLY as a Play on Critical Metals Autonomy

Greenland Resources' stock (MOLY) is positioned to benefit from two megatrends: rising defense spending and green energy demand.

1. Defense Sector Demand Surge
Molybdenum's role in defense-grade alloys is irreplaceable. Over 80% of metallic materials for EU defense systems require molybdenum, which enhances steel's strength and corrosion resistance. As Europe ramps up production of advanced weaponry, the Malmbjerg project's low-impurity molybdenum—ideal for precision alloys—secures Greenland Resources as a preferred supplier.

2. Green Energy's Hidden Mineral
Molybdenum is a backbone of green technologies. It strengthens turbine blades for wind energy and improves battery efficiency in electric vehicles. With the EU targeting a 32 million EV stock by 2030, demand for molybdenum will only grow. The Malmbjerg project's byproduct—magnesium—further caters to EV needs, as magnesium alloys reduce vehicle weight by 30% compared to steel.

Strategic Partnerships and Financial Catalysts

Greenland Resources has secured key partnerships that de-risk the project:
- A 10-year off-take agreement with Finland's Outokumpu for 8 million pounds/year of molybdenum, valued at $1.6 billion.
- Support from the European Raw Materials Alliance (ERMA), which fast-tracks regulatory approvals.
- Financing commitments totaling $275 million from European export credit agencies (EKN, Finnvera).

The project's feasibility study estimates $820 million in capex, with a levered IRR of 33.8% and a 2.4-year payback period at $18/lb molybdenum. Over its life, it will generate $1 billion in taxes for Greenland, while creating jobs and infrastructure through Impact Benefit Agreements (IBAs) with local communities.

Risks and Considerations

• Commodity Price Volatility: Molybdenum prices are tied to steel demand. A global economic slowdown could pressure margins.
• Project Delays: Mining must begin by December 2028; permitting or financing hiccups could disrupt timelines.
• Geopolitical Tensions: China's potential pushback or sanctions could impact exports from Greenland.

Conclusion: A Strategic Bet on Critical Metals Autonomy

Greenland Resources (MOLY) is a compelling investment for those betting on EU supply chain resilience and defense/green energy spending growth. With geopolitical risks elevating the value of “near-shore” critical minerals, the Malmbjerg project's strategic alignment with EU priorities—coupled with its strong offtake agreements and financing—positions MOLY as a rare pure-play opportunity in the critical metals space.

For investors, MOLY offers exposure to a mineral that is both strategically vital and underappreciated in mainstream portfolios. As the EU's energy transition and defense modernization accelerate, Greenland's molybdenum goldmine could prove a cornerstone of regional autonomy—and a profitable one at that.