Greenland's Rare-Earth Potential in a Trump-Driven Geopolitical Shift

The Arctic is no longer a frozen frontier. As climate change reshapes global geopolitics and the U.S. under President Donald Trump intensifies its push to counter China's dominance in rare-earth elements (REEs), Greenland has emerged as a pivotal battleground for critical minerals. With the Trump administration prioritizing Arctic resource development and national security, investors are scrutinizing whether Greenland's untapped REE deposits can become a viable alternative to China's stranglehold on the global supply chain.

The Strategic Imperative: Rare Earths as a Geopolitical Weapon

China's control over 60% of global rare-earth production and 85% of processing capacity has long been a vulnerability for the West. In 2025, this tension escalated when Beijing imposed export restrictions on gallium and germanium, critical for semiconductors and defense systems. The U.S. now faces a stark choice: either accept higher prices and supply risks from China or invest in alternatives like Greenland's deposits.

Greenland's Tanbreez project, owned by Critical Metals Corp (CRML), has become a focal point. With an estimated 22.56 million metric tons of rare-earth oxides and 140 ppm gallium oxide, it is one of the most promising Western-aligned REE assets. The Trump administration's Export-Import Bank has signaled a $120 million loan to develop the site, part of a $290 million funding package. This aligns with broader U.S. efforts to build a domestic mine-to-magnet supply chain, a goal underscored by GreenMet CEO Drew Horn's recent visit to Mar-a-Lago to brief Trump's team on Tanbreez's potential as a deepwater port and naval base.

Financial Viability: High Stakes, High Rewards

The Tanbreez project's Preliminary Economic Assessment (PEA) in March 2025 projected a net present value (NPV) of $3 billion at a 15% discount rate and an internal rate of return (IRR) of 180%. These figures are staggering, but they hinge on overcoming logistical and political hurdles. Greenland's harsh climate allows only three to four months of fieldwork annually, while its lack of infrastructure—minimal roads, limited power, and no refining facilities—adds to costs.

Yet the project's strategic advantages are undeniable. Its coastal location offers year-round deepwater access to the North Atlantic, and its low radioactivity and minimal waste (3% of material) align with ESG criteria. Critical Metals' phased approach—starting with dry beneficiation to produce a rare-earth concentrate—minimizes upfront capital expenditure. If successful, the project could scale to 425,000 tons of rare-earth oxides annually by 2026, positioning it as a critical supplier for U.S. defense and clean energy sectors.

Geopolitical Risks and Green Met's Role

While the Trump administration's backing is a tailwind, Greenland's sovereignty remains a wildcard. The island, part of the Kingdom of Denmark, has rejected Trump's repeated calls to sell it, emphasizing its right to self-determination. Greenlandic Prime Minister Mute B. Egede has stressed that any mining project must benefit local communities and adhere to international standards. This cautious stance could delay approvals for projects like Kvanefjeld, which is stalled due to a uranium mining ban.

GreenMet, the U.S. firm brokering deals between the Trump administration and Greenlandic stakeholders, is navigating this complex landscape. Its CEO, Drew Horn, a former Green Beret, has leveraged military and diplomatic ties to fast-track projects. However, the administration's abrupt reshuffling of the National Security Council in 2025 highlights the volatility of Trump's Arctic strategy. Investors must weigh whether political shifts could derail long-term plans.

China's Counterpunch and Market Dynamics

China's recent export restrictions have already driven up prices for gallium and neodymium, with benchmarks rising 15-20% in 2025. This creates a short-term tailwind for Greenland's projects, as Western buyers seek alternatives. However, China's state-subsidized production model allows it to undercut competitors on price, a challenge Greenland's high-cost operations must overcome.

The U.S. has only one active rare-earth mine, MP Materials' Mountain Pass facility in California, which lacks downstream processing. Greenland's potential to fill this gap is significant, but it requires partnerships with U.S. refiners. Critical Metals' plan to partner with U.S. or EU hydrometallurgical facilities is a key risk factor—if these partnerships falter, the project's economics could unravel.

Investment Thesis: A High-Risk, High-Reward Bet

For investors, Greenland's rare-earth projects represent a dual opportunity: geopolitical leverage and financial upside. The Tanbreez project's $3 billion NPV and strategic alignment with U.S. national security goals make it a compelling long-term play. However, the risks are substantial:

1. Political Uncertainty: Greenland's regulatory environment and Denmark's influence could delay or block projects.
2. Logistical Costs: Developing infrastructure in a remote Arctic location is capital-intensive.
3. Market Volatility: China's pricing power and U.S. policy shifts could erode margins.

A diversified approach is advisable. Investors might consider a small position in CRML, paired with exposure to U.S. refiners like MP Materials (MP) or European players. The key is to balance the high-risk Arctic bet with more stable, near-term producers.

Conclusion: Arctic Gold or Frozen Mirage?

Greenland's rare-earth potential is a microcosm of the broader U.S.-China rivalry. While the Trump administration's Arctic ambitions and Greenland's geological endowments create a compelling narrative, the path to commercialization is fraught with challenges. For investors with a high risk tolerance and a long-term horizon, projects like Tanbreez offer a chance to profit from a geopolitical shift. But for those seeking stability, the Arctic's frozen gold remains a speculative gamble.

As the ice melts and the race for critical minerals intensifies, one thing is clear: Greenland's role in the global rare-earth market will be shaped not just by geology, but by the tides of geopolitics.