The prize is great on paper for a real estate tycoon like Trump\u2014after all, Greenland would exceed the Louisiana Purchase as the largest geographic acquisition in U.S. history. But multiple specialists in the region and its resources dismiss the economic reasoning as nonsensical, given that Greenland already is open to greater U.S. investment and military scale-up.<\/p>\n
Greenland may be home to large reserves of critical minerals and crude oil, but they\u2019re much cheaper to extract elsewhere in the world, including within the Lower 48, said Otto Svendsen, associate fellow specializing in the Arctic for the Center for Strategic and International Studies.<\/p>\n
\u201cThe business case is non-existent, setting aside all the political and legal and practical reasons for why I think it\u2019s impossible,\u201d Svendsen told Fortune<\/em>.<\/p>\n The White House\u2019s own estimations place the cost of a purchase of Greenland close to $700 billion, he said. Then there are the hundreds of billions of dollars needed to fund the developments of mines, oil drilling, roads, electrification, ports, and more\u2014with a wait of 10 to 20 years before seeing any notable commercial success. The U.S. would also presumably assume Denmark\u2019s roughly $700 million in annual subsidies in perpetuity to pay for the education, health care, and more of Greenland\u2019s 56,000 residents.<\/p>\n \u201cThe numbers just don\u2019t add up at all,\u201d Svendsen said. \u201cIt cannot be hammered home enough that the U.S. has an incredibly favorable arrangement at the moment with an incredible amount of access to Greenlandic territory, both to advance its security and its economic interests.\u201d<\/p>\n Despite ample efforts over the years to develop mines and drill for oil\u2014the last, unsuccessful drilling bid was abandoned in 2011\u2014Greenland today is home to zero oil production and just two active mines, neither of which extract the desired rare earths essential to computer, automotive, and military defense equipment. There\u2019s a small gold mine and another for anorthosite\u2014a mineral used to produce fiberglass, paint, and other common materials. While some rare earths and oil projects are in development\u2014by U.S. companies\u2014they remain in early stages, with no guarantees of success.<\/p>\n The relative lack of success over decades is no fluke, said Malte Humpert, senior fellow and founder of The Arctic Institute nonprofit think tank.<\/p>\n \u201cYou\u2019re dealing with ice, polar bears, darkness, lack of power, the sea ice being frozen, really low temperatures. It\u2019s probably one of the roughest places on Earth,\u201d Humpert said. \u201cThe fact that it hasn\u2019t been done\u2014when it could have been done\u2014is really all you need to know. It\u2019s very difficult to make it economical.\u201d<\/p>\n None of this has publicly deterred the president, nor has the risk of shattering international laws and the NATO alliance. The White House describes owning Greenland as a national security imperative\u2014a rationale that might outweigh the poor economics of an annexation.\u00a0But\u00a0analysts say existing treaties give the U.S. all the needed military advantages in the Arctic with the potential to grow and negotiate for even more.<\/p>\n As Trump focuses on his new \u201cDonroe\u201d doctrine and forewarns of a blitz through much of the Western Hemisphere\u2014since launching a military strike in Venezuela this month, he\u2019s threatened Colombia, Cuba, and Mexico\u2014he has set his sights on annexing Greenland by any means necessary, through a purchase or military action.<\/p>\n \u201cWe are going to do something on Greenland whether they like it or not,\u201d Trump told reporters last week. \u201cI would like to make a deal and do it the easy way. But, if we don\u2019t make a deal, we\u2019re going to do it the hard way.\u201d<\/p>\n While Trump publicly mulls seizing Greenland by force, Secretary of State Marco Rubio has focused on a negotiated purchase, which is a type of international diplomacy not practiced since World War II, and an approach that Denmark and Greenland have repeatedly rejected. The White House did not immediately respond to a request for additional comment.<\/p>\n The Trump administration already is planning a large upgrade of its only military base in Greenland, the Pituffik Space Base, with the potential to expand much more.<\/p>\n So why not just continue to grow your existing U.S. footprint in Greenland? If the U.S. doesn\u2019t annex Greenland, then Russia or China will instead, Trump has insisted. \u201cWhen we own it, we defend it,\u201d the former real estate developer said. \u201cYou don\u2019t defend leases the same way. You have to own it.\u201d<\/p>\n After Trump initiated tariffs and trade wars last year, the United States\u2019 over-reliance on China for critical minerals\u2014especially rare earths\u2014became painfully apparent when China threatened to withhold the necessary soft metals that drive America\u2019s economy and help bolster its national security.<\/p>\n The oxymoron of rare earths is that they\u2019re abundant around the world, but harder to find in larger concentrations that make the economics worthwhile. Greenland theoretically offers those large concentrations.<\/p>\n Greenland\u2019s estimated rare earths reserves offer a smorgasbord of 1.5 million metric tons, including the more uncommon heavy rare earths. That would rank Greenland eighth worldwide, coincidentally just behind the United States, but well behind China and its 44 million tons, according to the U.S. Geological Survey.<\/p>\n But as the research firm Wood Mackenzie says in a new report, \u201cHere, ambition\u00a0runs up against reality. Around 80% of the island is covered by the Greenland Ice Sheet, averaging a mile thick, meaning only limited work has been undertaken to quantify the true scale of Greenland\u2019s deposits.\u201d<\/p>\n An even bigger challenge is the higher costs of developing a mining industry in Greenland\u2019s harsh terrain, where there\u2019s little to no existing infrastructure. There are just a few short, warmer windows when drilling and mining are practical; there is less daylight than almost anywhere on earth; and most of the terrain is accessible only by helicopter.<\/p>\n But the less-discussed issue is that mining is only part of the equation, said Jennifer Li, senior geopolitical analyst for the Rystad Energy research firm.<\/p>\n In tandem, the U.S. must develop a much more extensive rare-earths processing and refining industry if it wants to break China\u2019s near-global monopoly on the complicated refining process. That would mean constructing more minerals refineries in Greenland or elsewhere in the U.S. (Currently some domestic projects are underway, including ones with U.S. subsidies and direct government equity investments.)<\/p>\n The U.S. would also likely have to further subsidize the critical minerals sales with a floor pricing mechanism, to compete against China\u2019s repeated price-dumping practices.<\/p>\n Greenland and Venezuela may represent very different cases, Li said, but they both come back to Trump\u2019s focus on Western Hemisphere dominance and \u201cgoverning from afar in order to try to change the policy regime.\u201d <\/p>\n In Venezuela, the focus is on crude oil. In Greenland, it\u2019s on critical minerals mining, including rare earths and uranium, and oil drilling. Greenland currently has moratoriums on both uranium mining and on oil drilling\u2014minus grandfathered licenses that allowed one Texas company to drill for oil this summer. \u201cThere are a lot of ecological concerns,\u201d Lisaid.<\/p>\n Trump could theoretically end those moratoriums and expedite permitting, essentially green-lighting Greenland for more mining and oil drilling.<\/p>\n Still, \u201ceven green-lighting rhetorically isn\u2019t going to lead to seismic changes overnight,\u201d Li said, given the historic lack of success in mining and oil drilling exploration and the many years of infrastructure construction required to build a commercial industry. A \u201cmore cooperative dialogue\u201d with Greenland, Denmark, and NATO is a more feasible approach, Li said, than taking things further with annexation or military action.<\/p>\n Current tensions aside, Greenland is eager to attract much more U.S. investment, just not at the expense of ownership and sovereignty, said Christian Keldsen, managing director of the Greenland Business Association.<\/p>\n After all, 97% of Greenland\u2019s exports are seafood, mostly shrimp. And Denmark\u2019s subsidies account for over half of Greenland\u2019s total revenues. Mining is only a tiny piece of the pie. Greenland wants the U.S. to invest in its mining and energy sectors, even developing data center campuses in the spacious and cold terrain that could prove suitable for such facilities, Keldsen said.<\/p>\n Just don\u2019t conquer the icy and barren island. \u201cWe\u2019re somewhat irritated by this. We\u2019ve had an open business relationship with the U.S. for years,\u201d Keldsen said. \u201cAll this talk creates instability and noise in the background. And, if there\u2019s anything investors don\u2019t like, it\u2019s instability.\u201d<\/p>\n For all the focus on seizing Greenland of late, it was a cosmetics heir who first put the bug in Trump\u2019s ear during his first term.<\/p>\n Back in 2018, during his first presidential term, Trump\u2019s longtime friend, billionaire Ronald Lauder\u2014from the family of Est\u00e9e Lauder fame\u2014discussed with Trump the importance of Greenland\u2019s resources and strategic Arctic positioning, especially as ongoing global warming melts the ice sheets and creates more passageways between the U.S. and Russia. (Lauder declined comment for this story.)<\/p>\n Shortly thereafter, Australian geologist Greg Barnes, who founded the massive Tanbreez rare earths mining project in Greenland, which remains in development, briefed Trump at the White House. Last year, New York-based Critical Metals acquired 92.5% ownership of Tanbreez. A pilot project launched earlier in January, although full construction is yet to begin.<\/p>\n \u201cIn the 19th century, there was the gold boom. The 20th century was the oil boom,\u201d Critical Metals CEO Tony Sage told Fortune<\/em> in a recent interview. \u201cWe\u2019re in the rare earths boom now, but this boom is going to fund everything for the next 30 to 50 years. Everything in your life needs rare earths.\u201d<\/p>\n The rationale for acquiring Greenland may have less to do with the economic case, and more with Trump\u2019s ego and his real estate background, said historians and analysts who are critical of the idea.<\/p>\n By a difference of just 8,000 square miles, an annexation of Greenland and its estimated 836,000 square miles would exceed the 1803 Louisiana Purchase and its 828,000 square miles, potentially making it the largest acquisition in U.S. history, noted David Silbey, a military historian at Cornell University.<\/p>\n \u201cThis is the biggest land grab ever. He loves big things, huge things, he would say,\u201d Silbey said. \u201cHe\u2019s a New York real estate guy. He likes to grab land, and he grew up in a world where bullying was part of business practice. He like to bully, and he\u2019s picking on the little guy.\u201d<\/p>\n Because Greenland doesn\u2019t \u201cmove the needle economically in any way, shape, or form,\u201d Trump following his real estate instincts is the most logical answer, Silbey said.<\/p>\n When it comes to hugeness, don\u2019t negate the distorted perspective of maps. The Mercator global maps that Trump and many others grew up with, like the one below, show a Greenland that\u2019s appears to be almost as large as all of Africa. In fact, Greenland is one-fourteenth the size of Africa, although it\u2019s still of course quite large (more than triple the geographic footprint of Texas).<\/p>\n Getty Images<\/p>\n<\/figure>\n \u201cWe try to rationalize irrational behavior. This is classic Trump ego politics,\u201d said Humpert of The Arctic Institute. \u201cIt\u2019s about him putting a Trump tower in Nuuk and saying he made the U.S. larger than any other president.\u201d<\/p>\n Militarily, Humpert is quick to point out that China and Russia have more ships and submarines traveling near Alaska\u2019s coast than Greenland\u2019s ice. \u201cThere\u2019s some truth to the Arctic heating up and there being more power politics in the Arctic,\u201d he said. \u201cBut the [U.S.] should take care of its own backyard first.\u201d<\/p>\n Silbey agreed. Offshore of Greenland represents one of the fastest routes between the U.S. and Russia, but existing defense treaties with Denmark give Trump all of the necessary military access for bases and waterway patrols. From a foreign policy standpoint, he said, annexation \u201cis just categorically dumb. You\u2019re blowing up NATO for access you already have.\u201d<\/p>\n A potentially more cynical view comes from Daniel Immerwahr, foreign relations historian at Northwestern University. Immerwahr says Trump is abandoning the U.S.\u2019s long-standing soft power diplomacy approach\u2014the U.S. maintains 750 military bases in other countries\u2014that was intended to avoid wars over land and resources, and is now focusing on the old-school colonialism of ownership and control, especially in the Western Hemisphere.<\/p>\n \u201cIt may be that we\u2019re entering a world of closed borders, in which case it makes more sense for security reasons to lock down the territories that contain the things you need because you might be afraid some other country would close trade lines,\u201d Immerwahr said, citing critical minerals as an example.<\/p>\n \u201cChina\u2019s desires on Taiwan and Russia\u2019s invasion of Ukraine have corresponded to the more closed annexationist model,\u201d he added. He also noted that a U.S. seizure of Greenland might be seen as a green light for China and Russia to follow suit in their own spheres of influence.<\/p>\n Trump has repeatedly insisted that, if the U.S. doesn\u2019t acquire Greenland, then \u201cRussia or China will take it over\u201d and exploit its resources and strategic military positioning. But China has invested in many projects in Greenland that have mostly failed, and has largely pulled out since, said Adam Lajeunesse, chair in Canadian and Arctic policy at St. Francis Xavier University in Nova Scotia.<\/p>\n There\u2019s no logic to a Chinese or Russian takeover, especially when Greenland has U.S. and NATO military backing, he said.<\/p>\n \u201cThat\u2019s a myth,\u201d Lajeunesse said. \u201cThe economic bogeyman the Trump administration is putting out there is really quite fictitious.\u201d<\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":" President Donald Trump\u2019s dogged determination to annex the icy island of Greenland relies on the idea that doing so would give the U.S. an untapped treasure trove of natural resources…<\/p>\n","protected":false},"author":704,"featured_media":7472,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[6],"tags":[2997,1592,939,4956,1924,1934,8403,1383,30,8402,8404],"jetpack_publicize_connections":[],"yoast_head":"\nWhat\u2019s at stake<\/h2>\n
A race for resources<\/h2>\n
What Trump wants<\/h2>\n
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