Analysis of the Impact of Geopolitical Tensions in Greenland on Critical Minerals Investment and Supply Chain Security

Based on the latest collected information, I will provide you with an in-depth analysis of geopolitical risks, critical minerals investment, and supply chain security.

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The current tense trilateral relationship among the U.S., Denmark, and Greenland began in early 2025 and reached a new climax in January 2026. According to Reuters, on January 17, 2026, people in Denmark and Greenland held large-scale rallies to protest U.S. President Trump’s threat to annex Greenland. In Nuuk, the capital of Greenland, thousands of demonstrators led by Prime Minister Jens-Frederik Nielsen marched to the U.S. Consulate, holding flags and chanting “Kalaallit Nunaat” (the Greenlandic name for Greenland). Organizers estimate that more than 20,000 people participated in the protest in Copenhagen, a size equivalent to the entire population of Nuuk. Demonstrators clearly stated: “Greenland is not for sale, it’s not a toy, it’s our home.”[1][2]

The trigger for this protest was the continuous escalation of territorial claims by the Trump administration since early 2025. Trump has stated on multiple public occasions that the U.S. must “own” the entire Greenland, and claimed that this goal could be achieved through “gentle means or more difficult ones.” U.S. Vice President Vance held talks with Danish Foreign Minister Lars Løkke Rasmussen and Greenlandic Foreign Minister Vivian Motzfeldt in Washington in January 2026, but failed to resolve the “fundamental differences” between the two sides.[3]

The core contradictions of this crisis can be summarized into three dimensions:

Dimension of Contradiction	U.S. Position	Denmark/Greenland Position
Sovereignty	Advocates acquiring or controlling Greenland to safeguard national security	Insists on Greenland’s right to self-determination and rejects any form of annexation
Resource Development	Seeks priority mining rights to obtain rare earth resources	Takes “zero ecological damage” as the prerequisite for mining and rejects development requests with political motives
Military Security	Emphasizes Arctic security and U.S. military presence	Worries that militarization may damage local lifestyles and the environment

Notably, a January 2025 poll showed that 85% of Greenlanders oppose joining the U.S., with only 6% in support. A concurrent poll also indicated that 75% of Americans and half of Republicans oppose Trump’s plan to take control of Greenland, reflecting significant domestic divisions in the U.S. on this issue.[3][4]

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Greenland possesses one of the world’s most important undeveloped critical mineral resources. According to 2025 data from the U.S. Geological Survey (USGS) and assessments by the Geological Survey of Denmark and Greenland (GEUS), Greenland’s resource endowments are as follows[5][6][7]:

• The USGS estimates that Greenland has approximately 1.5 million metric tons of rare earth reserves, ranking 8th globally
• GEUS’s assessment is more optimistic, suggesting that Greenland may actually hold approximately 36.1 million metric tons of rare earth resources, which would make it the world’s second-largest holder of rare earth reserves if accurate
• A unique advantage of Greenland’s rare earth deposits is their exceptionally high concentration of
  heavy rare earth elements
  (including terbium, dysprosium, and yttrium), which typically account for less than 10% of most rare earth deposits but are key materials for permanent magnets used in wind turbines, electric vehicles, and defense systems

• Greenland holds 29 of the 38 critical raw materials identified by the European Commission
• 55 critical raw material deposits have been identified, but only 1 is currently in operation
• Important associated minerals include: graphite (over 6 million metric tons), cobalt, nickel, lithium, titanium, vanadium, tungsten, zinc, copper, gold, uranium, etc.

• The USGS estimates that the Arctic Circle may hold approximately 30% of the world’s undiscovered natural gas reserves
• Northeastern Greenland may hold approximately 31 billion barrels of oil equivalent in hydrocarbons, equivalent to the current proven reserves of the United States

Despite its rich resource reserves, Greenland’s mineral development faces severe challenges:

Type of Challenge	Specific Description
Geographical Barriers	80% of the area is covered by ice, and more than half of the mineral deposits are located north of the Arctic Circle. Extreme climatic conditions greatly increase mining difficulty and costs
Environmental Constraints	The Greenland self-governing government takes “zero ecological damage” as the prerequisite for mining. Multiple projects were suspended in 2025 due to environmental issues
Lack of Infrastructure	Logistics difficulties, limited labor force, and imperfect supply chains in remote areas
Economic Viability	Given current prices and production costs, coupled with the ice-covered environment and strict environmental legislation, it is unlikely that the resources will be economically viable for mining in the near term

• Tanbreez Project:
  The U.S. Export-Import Bank issued a $120 million letter of intent to Critical Metals Corp in June 2025, which, if approved, will become the Trump administration’s first overseas mining project investment, with an initial target of producing approximately 85,000 metric tons of rare earth oxide annually starting in 2026
• Kvanefjeld Project:
  Located in southern Greenland, it has development potential but has not yet achieved commercial operation

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China dominates the global rare earth supply chain, a pattern that is difficult to change in the short term:

• China controls 90% of the world’s rare earth refining capacity
• 80% of permanent magnet manufacturing is concentrated in China
• China holds rare earth purification technology with a purity of 99.9999% (the U.S. only achieves 99.5% at a cost 2.3 times higher)
• In 2025, China produced 91% of the world’s rare earth permanent magnets, with Japan accounting for 7% and Germany 2%

According to analysis by the Center for Strategic and International Studies (CSIS), 2025 marked a critical turning point in China’s rare earth policy[8][9]:

Time	Event	Impact
December 2024	China imposed new restrictions on rare earths	A retaliatory measure against U.S. semiconductor export controls
April 2025	China cut off supplies of 7 heavy rare earth minerals to U.S. and Western manufacturers	Caused shortages, delays, and even production halts in Western automotive supply chains
October 2025	China further tightened restrictions on rare earths and magnets to the U.S.	Directly threatened the U.S. defense supply chain
January 2026	China imposed stricter export controls on Japan	Covering seven medium and heavy rare earth elements and rare earth permanent magnets

These control measures led to reported supply disruptions for Western automakers (including Nissan and Suzuki), with Suzuki even suspending production of its Swift model.

The direct impact of tensions in Greenland on the global mineral supply chain is limited, for the following reasons:

1. No Substantive Production Capacity:
   Greenland currently produces no rare earths, and existing projects are still years away from commercial operation
2. Geopolitical Risk Premium:
   Uncertainty may cause rare earth price fluctuations, and investors may demand higher risk premiums
3. Increased Supply Chain Anxiety:
   Tensions may prompt Western countries to accelerate the establishment of rare earth reserves, further driving up demand

If the situation continues to develop, the following impacts may occur:

Area of Impact	Possible Scenario
Rise of Resource Nationalism	Greenlandic people’s vigilance towards external investment increases, which may delay resource development processes
Hindered Supply Chain Diversification	Western countries’ strategies to reduce dependence on Chinese rare earths may be frustrated due to the complicated situation in Greenland
Arctic Shipping Lane Security Risks	Geopolitical tensions may affect the security of Arctic shipping lanes, which are strategically significant for global shipping
Trend of Supply Chain Regionalization	Critical mineral supply chains may further split into two parallel systems: the “China System” and the “Western System”

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According to the 2025 Mining & Metals Industry Survey and latest market data, geopolitical risk has become the primary consideration for critical mineral investments[10][11]:

High-Risk Factors:
├── Political Intervention Risk: Widening policy divergences between countries and deepening government involvement
├── Supply Chain Disruption Risk: Frequent export controls and embargo measures
├── Investment Access Risk: Resource nationalism and local protectionism
└── Infrastructure Risk: High development costs in the Arctic region

Medium-Risk Factors:
├── Price Volatility Risk: Policy-driven rather than supply-demand-driven price formation
├── Technology Transfer Risk: Restricted access to key processing technologies
└── Talent Shortage Risk: Global shortage of professional talent

Low-Risk Factors:
├── Environmental Compliance Risk (Mitigable through technology and investment management)
└── Community Relations Risk (Mitigable through localization strategies)

Mining investments driven by geopolitical events in 2025 showed new characteristics:

1. Politics Replaces Price as the Dominant Factor:
   Investment decisions depend more on policy support and geopolitical strategic considerations rather than traditional commodity prices and supply-demand expectations
2. Increased Activity of State-Owned Capital:
   36% of respondents expect state-supported financing to be the most common form of policy intervention in developed markets over the next 12 months
3. Security Premium Replaces Green Premium:
   A structural shift in the market, where investors are willing to pay a premium for supply chain security rather than just focusing on environmental or similar premiums

Investor Type	Recommended Strategy
Sovereign Wealth Funds	Monitor geopolitical risk exposure of Greenland-related projects, and make appropriate allocations to diversify dependence on Chinese supply chains
Mining Companies	Prioritize regions with higher policy stability; Greenland projects should be treated as long-term strategic reserves rather than short-term investments
Downstream Manufacturers	Build a diversified supplier network to avoid over-reliance on any single source or region
Financial Investors	Focus on rare earth processing technology companies rather than just mining enterprises; supply chain security concept stocks may benefit from policy support

1. Geographical Diversification:
   Establish diversified rare earth supply sources in Africa, Australia, Canada, and other regions
2. Technological Independence:
   Increase R&D investment in rare earth processing and purification technologies to reduce dependence on China’s processing capacity
3. Strategic Reserves:
   Establish national and commercial reserves of rare earths and critical minerals to reduce the impact of supply chain disruptions
4. Contract Clause Optimization:
   Add stricter supply guarantee and price adjustment clauses to procurement contracts

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• The U.S., Denmark, and Greenland maintain the status quo, with tensions but no military conflict
• Greenland’s resource development proceeds as planned without major disruptions
• China continues to implement rare earth export controls but maintains negotiation channels

• Rare earth prices remain high with fluctuations
• Western countries accelerate the establishment of alternative supply sources
• Supply chain diversification progresses steadily

• The U.S. takes more aggressive actions towards Greenland, triggering international sanctions
• Severe divisions emerge within NATO
• Greenland’s resource development projects are forced to suspend or cancel

• Rare earth prices surge significantly
• Supply chain uncertainty increases markedly
• Western countries are forced to accelerate the construction of domestic processing capacity

• Tensions are resolved through diplomatic channels
• Greenland’s resource development progresses under international cooperation frameworks
• The U.S. and China reach some form of cooperation arrangement on critical minerals

• Rare earth prices decline
• Supply chain risk premiums decrease
• Investment confidence gradually recovers

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Greenland holds globally significant reserves of rare earths and critical minerals, and its strategic significance has become increasingly prominent against the backdrop of China’s dominance in the global rare earth supply chain. However, there is a huge gap between theoretical reserves and actual development capacity, making it unlikely to become an important supply source in the short term.

In the short term, tensions mainly affect investment decisions through market sentiment, price fluctuations, and policy expectations, rather than directly affecting supply. In the long term, if tensions lead to hindered resource development, it may delay Western countries’ efforts to achieve supply chain diversification.

The traditional investment analysis framework based on prices and supply and demand is giving way to a policy-driven investment paradigm. Investors increasingly need to incorporate geopolitical risks, national security considerations, and supply chain security into their investment decision-making models.

Whether it is the U.S. Section 232 investigation, the EU’s Critical Raw Materials Act, or China’s export controls, all reflect the strategic orientation of various countries regarding resource security as national security.

For investors focusing on the critical minerals sector, the following investment themes are recommended:

Investment Theme	Sub-sectors	Key Focus Areas
Supply Chain Security	Rare earth processing technology, magnet manufacturing	Focus on technological autonomy and domestic substitution
Diversified Supply	Rare earth projects in Africa, Australia	Evaluate project economic viability and policy risks
Strategic Reserves	Rare earth storage enterprises	Focus on reserve scale and policy changes
Alternative Materials	Rare earth-free technologies	Long-term focus on the possibility of technological breakthroughs

Given the high uncertainty of geopolitical situations, investors should fully assess policy risks when making investment decisions and maintain the flexibility and diversified allocation of their investment portfolios.

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[1] Reuters - “Protesters rally in Denmark and Greenland against Trump annexation threat” (https://www.reuters.com/world/europe/protesters-denmark-support-greenland-after-trumps-takeover-threat-2026-01-17/)

[2] France 24 - “‘Hands off Greenland’: Thousands protest in Denmark against Trump’s land grab” (https://www.france24.com/en/europe/20260117-large-crowds-expected-for-hands-off-greenland-protests)

[3] Unifuncs - “In-Depth Analysis Report on Greenland Geopolitical Crisis: Multiple Interest Games and Strategic Considerations 2025-2026” (https://unifuncs.com/s/qwlzjRb6)

[4] The Guardian - “Here in Greenland we are scared, but certain of one thing: our home is not for sale” (https://www.theguardian.com/profile/malu-rosing)

[5] CSIS - “Greenland, Rare Earths, and Arctic Security” (https://www.csis.org/analysis/greenland-rare-earths-and-arctic-security)

[6] Euronews - “Greenland’s value explained: Could Trump really buy the Danish island” (https://www.euronews.com/business/2026/01/15/greenlands-value-explained-could-trump-really-buy-the-danish-island)

[7] Foreign Affairs - “How Greenland Falls: Imagining a Bloodless Trump Annexation” (https://www.foreignaffairs.com/united-states/how-greenland-falls)

[8] CSIS - “China’s Rare Earth Campaign Against Japan” (https://www.csis.org/analysis/chinas-rare-earths-campaign-against-japan)

[9] White & Case - “President Trump orders critical minerals trade negotiations under Section 232 action” (https://www.whitecase.com/insight-alert/president-trump-orders-critical-minerals-trade-negotiations-section-232-action)

[10] White & Case - “Mining & metals 2026: Adapting to a policy-driven business cycle” (https://www.whitecase.com/insight-our-thinking/mining-metals-2026-adapting-policy-driven-business-cycle)

[11] S&P Global - “US, EU to further intensify critical mineral investments as China tightens hold” (https://www.spglobal.com/energy/en/news-research/latest-news/metals/010926-us-eu-to-further-intensify-critical-mineral-investments-as-china-tightens-hold)

[12] Sina Finance - “Battle for Rare Earth Resources: Will Greenland Become the Next Global Hotspot?” (https://news.sina.cn/bignews/insight/2026-01-15/detail-inhhiusc3489963.d.html)

[13] Wall Street CN - “Why is Trump Eyeing Greenland? Beyond a Strategic Location, This Icy Island Holds ‘Critical Resources’” (https://wallstreetcn.com/articles/3762914)