BRUSSELS — On Greenland’s southern tip, surrounded by snowy peaks and deep fjords, lies Kvanefjeld — a mining project that shows the giant, barren island is more than just a coveted military base.

Beneath the icy ground sits a major deposit of neodymium and praseodymium, rare earth elements used to make magnets that are essential to build wind turbines, electric vehicles and high-tech military equipment.

If developed, Greenland, a semi-autonomous part of Denmark, would become the first European territory to produce these key strategic metals. Energy Transition Minerals, an Australia-based, China-backed mining company, is ready to break ground.

But neither Copenhagen, Brussels nor the Greenlandic government have mobilized their state power to make the project happen. In 2009, Denmark handed Greenland’s inhabitants control of their natural resources; 12 years later the Greenlandic government blocked the mine because the rare earths are mixed with radioactive uranium.

Since then the project has been in limbo, bogged down in legal disputes.

“Kvanefjeld illustrates how political and regulatory uncertainty — combined with geopolitics and high capital requirements — makes even strategically important projects hard to move from potential to production,” Jeppe Kofod, Denmark’s former foreign minister and now a strategic adviser to Energy Transition Minerals, told POLITICO.

Kvanefjeld’s woes are emblematic of Greenland’s broader problems. Despite having enough of some rare earth elements to supply as much as 25 percent of the world’s needs — not to mention oil and gas reserves nearly as great as those of the United States, and lots of other potential clean energy metals including copper, graphite and nickel — these resources are almost entirely undeveloped.

Just two small mines, extracting gold and a niche mineral called feldspar used in glassmaking and ceramics, are up and running in Greenland. And until very recently, neither Denmark nor the European Union showed much interest in changing the situation.

But that was before 2023, when the EU signed a memorandum of understanding with the Greenland government to cooperate on mining projects. The EU Critical Raw Materials Act, proposed the same year, is an attempt to catch up by building new mines both in and out of the bloc that singles out Greenland’s potential. Last month, the European Commission committed to contribute financing to Greenland’s Malmbjerg molybdenum mine in a bid to shore up a supply of the metal for the EU’s defense sector. 

But with United States President Donald Trump threatening to take Greenland by force, and less likely to offer the island’s inhabitants veto power over mining projects, Europe may be too late to the party.

“The EU has for many years had a limited strategic engagement in Greenland’s critical raw materials, meaning that Europe today risks having arrived late, just as the United States and China have intensified their interest,” Kofod said.

In a world shaped by Trump’s increasingly belligerent foreign policy and China’s hyperactive development of clean technology and mineral supply chains, Europe’s neglect of Greenland’s natural wealth is looking increasingly like a strategic blunder.

A hostile land

That’s not to say building mines in Greenland, with its mile-deep permanent ice sheet, would be easy.

“Of all the places in the world where you could extract critical raw materials, [Greenland] is very remote and not very easily accessible,” said Ditte Brasso Sørensen, senior analyst on EU climate and industrial policy at Think Tank Europa, pointing to the territory’s “very difficult environmental circumstances.” 

The tiny population — fewer than 60,000 — and a lack of infrastructure also make it hard to build mines. “This is a logistical question,” said Eldur Olafsson, CEO of Amaroq, a gold mining company running one of the two operating mines in Greenland and also exploring rare earths and copper extraction opportunities. “How do you build mines? Obviously, with capital, equipment, but also people. [And] you need to build the whole infrastructure around those people because they cannot only be Greenlandic,” he said. 

Greenland also has strict environmental policies — including a landmark 2021 uranium mining ban — which restrict resource extraction because of its impact on nature and the environment. The current government, voted in last year, has not shown any signs of changing its stance on the uranium ban, according to Per Kalvig, professor emeritus at the Geological Survey of Denmark and Greenland, a Danish government research organization.

Uranium is routinely found with rare earths, meaning the ban could frustrate Greenland’s huge potential as a rare earths producer.

It’s a similar story with fossil fuels. Despite a 2007 U.S. assessment that the equivalent of over 30 billion barrels in oil and natural gas lies beneath the surface of Greenland and its territorial waters — almost equal to U.S. reserves — 30 years of oil exploration efforts by a group including Chevron, Italy’s ENI and Shell came to nothing.

In 2021 the then-leftist government in Greenland banned further oil exploration on environmental grounds. 

Danish geologist Flemming Christiansen, who was deputy director of the Geological Survey of Denmark and Greenland until 2020, said the failure had nothing to do with Greenland’s actual potential as an oil producer.

Instead, he said, a collapse in oil prices in 2014 along with the high cost of drilling in the Arctic made the venture unprofitable. Popular opposition only complicated matters, he said.

The climate change effect

From the skies above Greenland Christiansen sees firsthand the dramatic effects of climate change: stretches of clear water as rising temperatures thaw the ice sheets that for centuries have made exploring the territory a cold, costly and hazardous business.

“If I fly over the waters in west Greenland I can see the changes,” he said. “There’s open water for much longer periods in west Greenland, in Baffin Bay and in east Greenland.”

Climate change is opening up this frozen land.

Greenland contains the largest body of ice outside Antarctica, but that ice is melting at an alarming rate. One recent study suggests the ice sheet could cease to exist by the end of the century, raising sea levels by as much as seven meters. Losing a permanent ice cap that is several hundred meters deep, though, “gradually improves the business case of resource extraction, both for … fossil fuels and also critical raw materials,” said Jakob Dreyer, a researcher at the University of Copenhagen.  

But exploiting Greenland’s resources doesn’t hinge on catastrophic levels of global warming. Even without advanced climate change, Kalvig, of the Geological Survey of Denmark and Greenland, argues Greenland’s coast doesn’t differ much from that of Norway, where oil has been found and numerous excavation projects operate.    

“You can’t penetrate quite as far inland as you can [in Norway], but once access is established, many places are navigable year-round,” Kalvig said. “So, in that sense, it’s not more difficult to operate mines in Greenland than it is in many parts of Norway, Canada or elsewhere — or Russia for that matter. And this has been done before, in years when conditions allowed.”   

A European Commission spokesperson said the EU was now working with Greenland’s government to develop its resources, adding that Greenland’s “democratically elected authorities have long favored partnerships with the EU to develop projects beneficial to both sides.”

But the spokesperson stressed: “The fate of Greenland’s raw mineral resources is up to the Greenlandic people and their representatives.”

The U.S. may be less magnanimous. Washington’s recent military operation in Venezuela showed that Trump is serious about building an empire on natural resources, and is prepared to use force and break international norms in pursuit of that goal. Greenland, with its vast oil and rare earths deposits, may fit neatly into his vision.

Where the Greenlandic people fit in is less clear.