Trump comments, Venezuela strike put Greenland's resource riches back in spotlight

Greenland's mineral wealth is back in the spotlight after US President Donald Trump reiterated on Jan. 4 the need for American control over the autonomous Danish territory shortly after US forces apprehended Nicolás Maduro, the ousted leader of Venezuela.

The US conducted an airstrike on Caracas, Venezuela, and placed Maduro into custody on Jan. 3 over drug and terrorism charges, which Maduro, imprisoned in the US, has since rejected. The following day the president told reporters on Air Force One that the resource-rich territory of Greenland was crucial for American national security, after making similar comments in a Jan. 4 report in The Atlantic.

Greenland is largely covered by glaciers and hosts reserves and resources of rare earths, and other metals the US deems critical. Greenland also holds untapped potential for hydrocarbons. The territory's resources include 12.3 million metric tons of lanthanides, a series of rare earth elements, rivaling the US resource of 14.9 million mt, according to S&P Global Market Intelligence data.

"We need Greenland from the standpoint of national security and Denmark is not going to be able to do it," Trump said, according to media reports.

While the president's intentions regarding Greenland are unclear, experts said Trump's renewed comments -- coming after the military strike that ousted Maduro -- will draw more attention to Greenland's resource wealth.

"I think Venezuela indicates that Trump is willing to do a lot to push US interests, and use both carrot and stick approaches," Simon Jowitt, an exploration geologist at the University of Nevada, Reno and Director of the Nevada Bureau of Mines and Geology, told Platts. He added that the Venezuela strike may mean the US is now more willing to pursue resources through "threatshoring" rather than "friendshoring to support supply chain development."

Platts is part of S&P Global Energy.

In attacking Venezuela and removing Maduro, Trump underscored the need for the US to benefit from the country's natural resources, in this case, its oil riches.

Traditional allies push back

Trump's comments drew quick condemnation from Denmark and Greenland.

Mette Frederiksen, Prime Minister of Denmark, said the US had no right to annex Greenland and urged the US to stop threatening a close ally. Frederiksen also said Greenland had already rejected US advances.

Greenland Prime Minister Jens-Frederik Nielsen acknowledged Greenland's strategic location, but criticized any suggestion of annexation.

"Threats, pressure and talk of annexation do not belong anywhere between friends," Nielsen said in a Jan. 4 social media post. "That's not how you talk to a people who have repeatedly shown responsibility, stability and loyalty. This is enough. No more pressure. No more hints. No more fantasies about annexation."

Greenland and Denmark have previously pushed back against Trump's talk about control of the territory. Last year, Trump said in a social media post that US "ownership and control of Greenland is an absolute necessity."

Tough conditions

Greenland's remoteness and frigid conditions have held back resource development, and experts expect this will be the case for years to come.

"The resource wealth question becomes one of economics more than anything else," Chris Berry, founder and president of House Mountain Partners, a battery metals investment consultancy, said in an email. "Is the private sector going to build out the critical minerals supply chain in Greenland alone or will the US Government share some -- or most -- of the cost burden?"

Experts told Platts they doubted it made sense for the US to control Greenland because of the geopolitical consequences of trying to do so.

"The political costs of any strong-arm moves are likely much greater than the action taken in Venezuela," Jowitt said. "So I suspect that there may be more pushing, but not on the scale of recent events in Venezuela."

The White House declined to comment.

Trump also told reporters on Jan. 4 there would be more to say about Greenland, though it was not clear what the president had in mind.

"We'll worry about Greenland in about two months. Let's talk about Greenland in 20 days," Trump told reporters on Jan. 4 after saying he'd rather talk about Venezuela, Russia and Ukraine.