Analysis of the U.S. Greenland Acquisition Proposal and Investment Opportunities in Rare Earth Stocks

Recently, U.S. President Trump has revived the “Greenland acquisition” proposal, attracting global attention and triggering sharp volatility in the capital markets. White House Press Secretary Levitt confirmed on January 6, 2026, that Trump has clearly stated “gaining Greenland is a U.S. national security priority”, and his team is discussing various options including “using U.S. military forces” [1][2]. This geopolitical event directly triggered a sharp rally in rare earth and critical mineral stocks.

As the world’s largest island (covering approximately 2.16 million square kilometers), Greenland’s strategic value lies in two core dimensions:

and . Geographically, Greenland guards the key waterways between the North Atlantic and the Arctic Ocean, and is a critical node of the NATO anti-submarine warfare system’s “Greenland-Iceland-UK Gap” (GIUK Gap) [1][3]. As climate change accelerates the melting of Arctic ice, the commercial potential of Arctic shipping routes has become increasingly prominent, offering an alternative to traditional shipping arteries such as the Suez Canal and Panama Canal [2].

In terms of resource endowment, Greenland is rich in critical minerals. A 2023 study by the Danish and Greenlandic Geological Survey pointed out that the island’s ice-free area is approximately 400,000 square kilometers, with complex geological structures spanning nearly 4 billion years of geological evolution, making it an ideal location for exploring and developing various mineral resources [1]. Among the 34 critical minerals identified by the EU, 31 can be found in Greenland, including rare earth elements (REE), graphite, lithium, copper, nickel, zinc, lead, neodymium, praseodymium, dysprosium, etc., which are essential raw materials for energy transition, chip manufacturing, and the defense industry [2][3].

The capital market reaction to this proposal has been extremely intense, with directly related stocks seeing double-digit to dozens of percentage points gains [4]:

has become the absolute focus of this rally. The company owns the Tanbreez rare earth project in Greenland, which is one of the largest rare earth deposits in the world, with shipping conditions that allow direct access to the North Atlantic through deep-water fjords year-round. The stock soared 25.6% on January 6, and rose another 11% in after-hours trading, with a cumulative gain of over 40% in just two trading days [5][6]. 75% of the Tanbreez project’s production capacity has been pre-sold to U.S. and European clients, and it is expected to complete the remaining 25% of agreements in early 2026 [6]. As of the close on January 6, CRML’s stock price was $11.81, with a 52-week low of only $1.23, indicating extremely high volatility [5].

as a leading U.S. domestic rare earth company has also attracted market attention. The company is the only rare earth miner in the U.S. and is building domestic separation and processing capabilities. In July 2025, it received $400 million in priority equity investment from the U.S. Department of Defense and established strategic partnerships with tech giants such as Apple [5]. BMO Capital Markets upgraded its rating to “Outperform” [7]. It should be noted that its forward 12-month price-to-sales ratio is 22.93 times, a significant premium compared to the industry average of 1.44 times [7].

also benefited from the sector’s rally, but the company is still in the development stage, focusing on rare earth processing and permanent magnet production.

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The impact of the U.S. Greenland acquisition proposal goes far beyond simple mining investment, touching on multiple dimensions such as geopolitics, supply chain security, and energy transition.

: China currently controls approximately 90% of the world’s rare earth processing capacity [3], and the U.S. has long faced the strategic risk of relying on China for critical mineral supplies. If the U.S. acquires or strengthens its influence over Greenland, it can diversify rare earth supply sources and reduce dependence on a single supply channel. This logic aligns with the potential use of policy tools such as the Defense Production Act, and the U.S. may accelerate the construction of domestic critical mineral supply chains through policy intervention.

: Climate change has accelerated the melting of Arctic ice, making previously inaccessible resources reachable while opening new shipping routes connecting North America, Europe, and Asia. Controlling Greenland means seizing a first-mover advantage in the competition for Arctic shipping routes, which may reshape the pattern of global trade routes.

: Danish leaders have explicitly rejected the sale of Greenland, and European allies have collectively opposed it. The Prime Minister of the Greenland Self-Government emphasized that “the island is not for sale or annexation” [3]. Its status as a NATO member creates huge legal and political obstacles to the actual implementation of military options [1][2][3]. This risk factor may cause sharp fluctuations in the prices of related stocks in the short term.

From a capital market perspective, this event reveals several important trends: First, geopolitical risks have increasingly become a core consideration for resource stock investments; second, investors’ sensitivity to policy-driven investment opportunities has significantly increased; third, the high volatility characteristics of the rare earth and critical mineral sectors are particularly prominent under event-driven conditions. CRML’s stock price has soared 270% in six months, raising questions about whether optimistic expectations have been fully priced in [5].

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: The strong opposition from Denmark and Europe has created major diplomatic obstacles to the acquisition plan. Although the market has expectations for commercial agreements or a “free association agreement model” [4], the actual negotiation process may be long and the outcome uncertain. The foreign ministers of Denmark and Greenland are scheduled to meet with Secretary of State Rubio in Washington next week [2], and the negotiation results will directly affect market sentiment.

: Related stocks have seen sharp rallies in the short term, with CRML’s cumulative gain exceeding 40% [5][6]. If there is no follow-up substantive progress to support the rally, a “buy the rumor, sell the news” correction may occur. The company is still in the development stage, and production and revenue will take several years to materialize [5], so the current valuation mainly reflects expectations rather than fundamentals.

: Even if political obstacles are removed, resource development still needs to overcome multiple hurdles such as investment, regulations, logistics, and environmental permits [6]. Factors such as geology, technology, and the environment may cause the development progress of projects such as Tanbreez to fall short of expectations.

: Given the “two-week to 20-day” timeline set by Trump [2], the market will pay close attention to subsequent diplomatic developments. Stimulated by news, related stocks may maintain high volatility, providing opportunities for traders with risk tolerance.

: If the U.S. promotes commercial agreements such as rare earth mining and hydropower development [2], mining companies with projects in Greenland will receive policy dividends. Critical Metals has publicly stated that it is open to investment from Washington, forming a market expectation of mutual engagement [6].

: As climate change melts ice, the difficulty of resource extraction gradually decreases [1]. If the U.S. successfully gains influence over Greenland, the global rare earth supply chain pattern may undergo structural changes, creating long-term value for early movers.

We are currently in a highly sensitive policy window (1-2 weeks), where market volatility and opportunities coexist. Investors should closely follow the progress of diplomatic contacts between Washington, Denmark, and Greenland, as well as any policy statements related to critical mineral investments. In the medium term (1-6 months), we will enter the stage of substantive negotiations and commercial agreement advancement, and the differentiation of related targets will intensify. In the long term (1-3 years), we need to observe the actual project development progress and supply chain restructuring.

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Based on the above analysis, the following information can serve as an objective background for decision support:

: Critical Metals Corp. (CRML) is the most direct beneficiary due to its Tanbreez rare earth project located in Greenland; MP Materials (MP), as a leading U.S. domestic rare earth company, indirectly benefits from increased industry attention.

: Greenland holds 31 types of critical minerals identified by the EU, including rare earth elements, graphite, copper, nickel, etc., which have strategic value for energy transition and the defense industry.

: The rally in resource stocks triggered by geopolitical events usually goes through three stages: a general rally driven by news; the start of differentiation, with the market focusing on the most direct beneficiary targets; a return to fundamentals, depending on actual policy progress and project execution. Investors should understand that we may currently be in the first or second stage.

: Given the high volatility, it is recommended to focus on position control, diversified investment, and stop-loss mechanisms to avoid significant losses during sharp fluctuations.

: Investors should continue to pay attention to actual project progress, specific measures of the U.S. government, and official international responses, rather than relying solely on market rumors or media reports.

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When a geopolitical event triggers a rally in resource stocks, the market usually goes through three stages [4]. The first stage (1-3 days) is a general rally driven by news; the second stage (1-2 weeks) sees the start of differentiation, with the market focusing on the most direct beneficiary targets; the third stage (1-3 months) is a return to fundamentals, depending on actual policy progress and project execution.

The first island acquisition proposal in 2019 triggered a short-term rally in related stocks, but they subsequently pulled back [4]. This historical experience reminds investors that event-driven rallies may lack sustainability, and fundamental improvement is the core driver of long-term value creation.

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: Mixed

: [“Geopolitics”, “Rare Earths”, “Critical Minerals”, “Investment Opportunities”, “Greenland”, “Supply Chain Security”]

: [“CRML”, “MP”, “USAR”]

— Reference Sources —

[0] Jinling Analysis Database (market data, quantitative analysis tools)

[1] Xinhua News Agency - Why Does Greenland Make the U.S. So Covetous

[2] Jin10 Data - Trump’s Team Urgently Develops “Island Acquisition” Plan

[3] Yahoo Finance Hong Kong - From the Cold War to Critical Minerals: How Greenland Became Trump’s Obsessed Target?

[4] Yicai Global - Trump Threatens to “Annex” Greenland, Six Scenario Simulations

[5] TIKR - Why Critical Metals (NASDAQ:CRML) Stock Rallied 26 Percent Yesterday

[6] EBC - U.S. Pre-Market Rare Earth Concept Stocks Strengthen

[7] Nasdaq - MP Materials Trades at Premium Value