INTERVIEW: Greenland govt opens doors to global miners amid tense geopolitical backdrop

Greenland's government is prepared to welcome companies from all countries to invest in its mineral resources, but remains mindful of the geopolitical reality looming over the semi-autonomous territory, the permanent secretary for Greenland's Ministry of Business, Mineral Resources, Energy, Justice and Gender Equality, Jorgen Hammeken-Holm, told Platts in a recent interview.

Greenland's mineral resources have attracted heightened global interest, following declarations of interest from US President Donald Trump regarding the acquisition of mineral-rich Arctic Island. This mineral wealth includes rare earth elements, graphite, copper, nickel, zinc, iron ore and tungsten, considered critical across a host of energy transition technologies, including lithium-ion batteries, solar photovoltaic panels, wind turbines, and sensitive military applications.

Despite this potential, Greenland's mineral resources have remained largely underdeveloped owing to harsh environmental conditions, a lack of critical infrastructure, regulatory barriers, and logistical challenges arising from the territory's vast size.

The island currently boasts two active mines, neither of which is focused on critical minerals, alongside a handful of critical mineral projects in later-stage development led by US, Australian, and Canadian stakeholders.

Hammeken-Holm said that the government is eager to attract foreign investment to Greenland, focusing primarily on its natural resources, tourism, and renewable energy potential, but remains cognizant of the geopolitical sensitives surrounding the territory and the wider Arctic region.

"The general rule is that we are willing to accept investment from everybody. It doesn't matter if they're yellow or brown or blue or whatever. But we also acknowledge that there is a geopolitical reality to consider," he said.

Referring to US concerns surrounding China's involvement in Greenland's mining industry, Hammeken-Holm said that Greenland cannot dismiss interest from Chinese companies owing to their outsized role in global supply chains for critical minerals.

"We recognize that China accounts for a huge share of the global production of these critical minerals. It's because of this dominance that we cannot simply exclude Chinese companies from investing in the Greenland mining industry based on concerns from another foreign power, he said."

Having struggled to attract investors from the US and Europe in the past, Greenland has regularly courted Chinese investment with limited success.

While Chinese companies have also been involved in mineral exploration projects in Greenland at various times, none of these developments have progressed through to the development stage.

The most significant recent example is the Kvanefjeld rare earth exploration project, in which the Chinese company Shenghe Resources holds a 10% stake. This project was blocked in December 2021 following the introduction of a parliamentary act banning the exploration and exploitation of uranium, which often occurs alongside rare earth elements.

"My message is that we are not saying no to foreign investment from anywhere at the moment, he said, adding that Greenland will continue to adhere to EU restrictions against sanctioned countries and business entities.

Hammeken-Holm added that the government is currently working on a foreign direct investment act that will provide a mechanism for screening foreign investors entering Greenland.

US and EU interest intensifies

Having struggled to attract foreign investment in the past, interest in Greenland's mineral resources has intensified in recent years owing to China's growing influence over critical mineral supply chains and the perceived risk to US and European industry.

Export credit agencies from the US and Europe have taken the lead, announcing several loan guarantees and investments in Greenland-based projects in recent months.

In June, the US Export-Import Bank offered a $120 million loan to advance the development of the $290 million Tanbreez rare earth project in Southern Greenland. That same month, Denmark's Export and Investment Fund (EIFO) increased its shareholding in Canada's Amaroq Minerals, owner of a portfolio of critical minerals properties in Southern Greenland

In January, GreenRoc Strategic Materials, a developer focused on graphite in Greenland, announced that EIFO had expressed an interest in providing funding for its Amitsoq graphite project in Southern Greenland. The Amitsoq project was subsequently designated as an EU strategic project, granting access to funding and support from EU Member States and financial institutions.

Hammeken-Holm welcomed these developments, adding that foreign investment is critical for overcoming Greenland's significant environmental and logistical challenges.

Aside from its harsh environment, Greenland's mining industry is also constrained by the nature of its government finances, which rely heavily on Denmark. Each year, Denmark provides the territory with an annual block grant of DKK 3.9 billion ($511 million), accounting for approximately 20% of Greenland's GDP.

"Because we lack the resources and the money to invest directly in our mining industry, we are totally reliant on private companies from other jurisdictions such as the US, EU or Australia, to cover the costs of building a project in Greenland," he said.

Hammeken-Holm pushed back against accusations that Greenland's regulatory framework for mineral activities is hindering investment.

Adopted by Greenland's Parliament on May 31, 2023, the Act on Mineral Activities established that the holder of an exploitation license must have a company registered in Greenland and granted authorities the power to decide whether all conditions for the issuance of the license had been fulfilled. It also empowered authorities to demand that a project developer utilize local labor and suppliers.

"While we have very high standards regarding environmental impacts and sustainability in regard to mining, we believe that our rules are consistent with most major mining jurisdictions around the world," Hammeken-Holm said.

"As a society that depends heavily on fishing and hunting, we would much rather say no to a project than have it place our way of life at risk," he said.