Washington’s push to tap Greenland’s rare earths is an “absurd” solution to reduce its dependence on Beijing, industry experts said, citing low-grade deposits, harsh weather and the reality that any mined material would still need to be processed in China. Markets have nonetheless piled into rare-earth stocks with exposure to Greenland after U.S. President Donald Trump revived rhetoric about acquiring the territory on national security grounds, pointing to Russian and Chinese activities in the Arctic. Shares of rare earth companies with projects in Greenland surged on news that Trump was considering a range of options” to acquire Greenland , including “utilizing the U.S. Military.” Critical Metals Corp , which is developing the Tanbreez rare earth project in southern Greenland, jumped about 25% on Tuesday, while Energy Transition Minerals , the owner of the Kvanefjeld rare earth project , climbed more than 30%. Greenland resources do not change the dynamics, as rare earth is not that rare. Founder and CEO of Deep Data Analytics Mathan Somasundaram Sitting between the U.S. and Russia, Greenland has long been regarded as strategically important , particularly for Arctic security. Home to about 57,000 people, the territory sits close to emerging Arctic shipping lanes, where melting ice is opening routes that could sharply cut Asia-Europe transit times compared with the Suez Canal. The White House also views Greenland’s resources as a potential way to break China’s stranglehold on rare earths, said Brendan Clark, CEO of Victory Metals. Michael Waltz, then the incoming national security adviser in the Trump administration, was unequivocal about Trump’s interest in Greenland. “This is about critical minerals. This is about natural resources,” Waltz told Fox News in an interview a year ago. If the U.S. were to gain control, markets would assume mining approvals would follow, creating short-term optimism, echoed Mathan Somasundaram, founder and CEO of Deep Data Analytics. However, experts noted that the enthusiasm ignores fundamental bottlenecks in extracting and processing the rare earths. “The reality is that with weather, it is very hard to do and not very economical. Even if you mined it, then you have to send it to China for processing… In the medium to long term, it makes nearly no difference,” he added. Greenland’s unforgiving climate, isolated terrain and limited infrastructure are widely seen as major obstacles to unlocking its strategic value. Low grades, long odds At the core of the skepticism is ore quality. While Greenland hosts vast volumes of rare-earth-bearing rock, concentrations are far below those found at existing mines elsewhere. Additionally, while some of the Greenland projects are significant, they generally lack high concentrations of the more strategically valuable heavy rare earths, such as dysprosium, terbium, and yttrium. “Although these are very large volumes of rock that are enriched in rare earths, their grades are very low,” said John Mavrogenes, Professor of Economic Geology at the Australian National University. In some of the world’s main producing mines, such as the U.S., China and Australia, rare earths typically make up roughly 5% to 10% or more of the ore, Mavrogenes said, which allows more usable material to be recovered for every ton mined. In Greenland, that figure is less than 1%. Low grades significantly raise costs. “When the grades are so low, it means you have to move a hell of a lot of rock,” Mavrogenes said. “Imagine comparing 1% rare earths to 10% rare earths. It means 10 times the volume of rock you need to move in a place with no infrastructure, with no existing equipment, with no workforce.” Even under optimistic assumptions, Mavrogenes said Greenland production would be years away. “It would be at least a decade before they’d be doing anything,” he said. “So the idea that these are going to be successful in the short term is absurd.” That is not the only hurdle. If mining were to proceed, processing remains the industry’s central bottleneck and China’s strongest lever, warned industry veterans. Rare earths must be separated and refined before they can be turned into metals or magnets, and China has a near-monopoly on rare earth processing . Beijing controls around 90% of global refining, giving it a strategic leverage over supply chains, especially for electric vehicles, renewable energy and defense systems. “It is all about processing outside China. Greenland resources do not change the dynamics, as rare earth is not that rare. It is everywhere… Anyone who can do processing at scale outside China will get a premium,” Somasundaram said. If Washington wanted supply, it already has it, said Jon Hykawy, president and director of Stormcrow Capital. U.S. rare earth reserves are estimated at 1.9 million tonnes, compared with Greenland’s estimated 1.5 million tonnes, according to the U.S. Geological Survey. “If the U.S. wants rare earths, they could simply dig them up in the continental USA.” Victory Metals’ Clark also pointed to environmental and political risks, noting strong opposition to mining on the Arctic island. Investors could be left exposed if the U.S. does not strike a deal to appease these risks, he added. Kingsley Jones of Jevons Global said that there was a disconnect between politics and economics. “Securing new rare earths in the ground, in Greenland, will have zero impact on this area of supply chain insecurity,” Jones said. “The problem, as we see it, is that political rhetoric has far outrun commercial reality.”
