President Donald Trump’s dogged dedication to annex the icy island of Greenland depends on the concept that doing so would give the U.S. an untapped treasure trove of pure assets and strategic army positioning. However the harsh atmosphere, monumental monetary investments, and large infrastructure and workforce buildout required to create an financial engine may price at the least $1 trillion over 20 years and make little to no financial sense, based on trade and geopolitical analysts.
The prize is nice on paper for an actual property tycoon like Trump—in spite of everything, Greenland would exceed the Louisiana Buy as the most important geographic acquisition in U.S. historical past. However a number of specialists within the area and its assets dismiss the financial reasoning as nonsensical, on condition that Greenland already is open to better U.S. funding and army scale-up.
Greenland could also be residence to giant reserves of essential minerals and crude oil, however they’re less expensive to extract elsewhere on this planet, together with throughout the Decrease 48, mentioned Otto Svendsen, affiliate fellow specializing within the Arctic for the Heart for Strategic and Worldwide Research.
“The enterprise case is non-existent, setting apart all of the political and authorized and sensible causes for why I believe it’s not possible,” Svendsen instructed Fortune.
The White Home’s personal estimations place the price of a purchase order of Greenland near $700 billion, he mentioned. Then there are the a whole lot of billions of {dollars} wanted to fund the developments of mines, oil drilling, roads, electrification, ports, and extra—with a wait of 10 to twenty years earlier than seeing any notable business success. The U.S. would additionally presumably assume Denmark’s roughly $700 million in annual subsidies in perpetuity to pay for the training, well being care, and extra of Greenland’s 56,000 residents.
“The numbers simply don’t add up in any respect,” Svendsen mentioned. “It can’t be hammered residence sufficient that the U.S. has an extremely favorable association in the meanwhile with an unbelievable quantity of entry to Greenlandic territory, each to advance its safety and its financial pursuits.”
Regardless of ample efforts through the years to develop mines and drill for oil—the final, unsuccessful drilling bid was deserted in 2011—Greenland immediately is residence to zero oil manufacturing and simply two lively mines, neither of which extract the specified uncommon earths important to laptop, automotive, and army protection tools. There’s a small gold mine and one other for anorthosite—a mineral used to provide fiberglass, paint, and different widespread supplies. Whereas some uncommon earths and oil tasks are in improvement—by U.S. corporations—they continue to be in early levels, with no ensures of success.
The relative lack of success over a long time isn’t any fluke, mentioned Malte Humpert, senior fellow and founding father of The Arctic Institute nonprofit assume tank.
“You’re coping with ice, polar bears, darkness, lack of energy, the ocean ice being frozen, actually low temperatures. It’s most likely one of many roughest locations on Earth,” Humpert mentioned. “The truth that it hasn’t been accomplished—when it may have been accomplished—is admittedly all that you must know. It’s very tough to make it economical.”
None of this has publicly deterred the president, nor has the danger of shattering worldwide legal guidelines and the NATO alliance. The White Home describes proudly owning Greenland as a nationwide safety crucial—a rationale which may outweigh the poor economics of an annexation. However analysts say current treaties give the U.S. all of the wanted army benefits within the Arctic with the potential to develop and negotiate for much more.
As Trump focuses on his new “Donroe” doctrine and forewarns of a blitz via a lot of the Western Hemisphere—since launching a army strike in Venezuela this month, he’s threatened Colombia, Cuba, and Mexico—he has set his sights on annexing Greenland by any means needed, via a purchase order or army motion.
“We’re going to do one thing on Greenland whether or not they prefer it or not,” Trump instructed reporters final week. “I wish to make a deal and do it the straightforward means. However, if we don’t make a deal, we’re going to do it the exhausting means.”
Whereas Trump publicly mulls seizing Greenland by pressure, Secretary of State Marco Rubio has centered on a negotiated buy, which is a sort of worldwide diplomacy not practiced since World Battle II, and an strategy that Denmark and Greenland have repeatedly rejected. The White Home didn’t instantly reply to a request for extra remark.
The Trump administration already is planning a big improve of its solely army base in Greenland, the Pituffik Area Base, with the potential to increase far more.
So why not simply proceed to develop your current U.S. footprint in Greenland? If the U.S. doesn’t annex Greenland, then Russia or China will as a substitute, Trump has insisted. “Once we personal it, we defend it,” the previous actual property developer mentioned. “You don’t defend leases the identical means. You must personal it.”
What’s at stake
After Trump initiated tariffs and commerce wars final 12 months, the US’ over-reliance on China for essential minerals—particularly uncommon earths—turned painfully obvious when China threatened to withhold the required smooth metals that drive America’s financial system and assist bolster its nationwide safety.
The oxymoron of uncommon earths is that they’re ample world wide, however tougher to seek out in bigger concentrations that make the economics worthwhile. Greenland theoretically gives these giant concentrations.
Greenland’s estimated uncommon earths reserves supply a smorgasbord of 1.5 million metric tons, together with the extra unusual heavy uncommon earths. That will rank Greenland eighth worldwide, coincidentally simply behind the US, however nicely behind China and its 44 million tons, based on the U.S. Geological Survey.
However because the analysis agency Wooden Mackenzie says in a brand new report, “Right here, ambition runs up towards actuality. Round 80% of the island is roofed by the Greenland Ice Sheet, averaging a mile thick, that means solely restricted work has been undertaken to quantify the true scale of Greenland’s deposits.”
A fair larger problem is the upper prices of creating a mining trade in Greenland’s harsh terrain, the place there’s little to no current infrastructure. There are only a few quick, hotter home windows when drilling and mining are sensible; there may be much less daylight than virtually anyplace on earth; and many of the terrain is accessible solely by helicopter.
However the less-discussed difficulty is that mining is simply a part of the equation, mentioned Jennifer Li, senior geopolitical analyst for the Rystad Vitality analysis agency.
In tandem, the U.S. should develop a way more in depth rare-earths processing and refining trade if it needs to interrupt China’s near-global monopoly on the difficult refining course of. That will imply setting up extra minerals refineries in Greenland or elsewhere within the U.S. (At present some home tasks are underway, together with ones with U.S. subsidies and direct authorities fairness investments.)
The U.S. would additionally seemingly should additional subsidize the essential minerals gross sales with a ground pricing mechanism, to compete towards China’s repeated price-dumping practices.
A race for assets
Greenland and Venezuela might symbolize very completely different instances, Li mentioned, however they each come again to Trump’s deal with Western Hemisphere dominance and “governing from afar with the intention to attempt to change the coverage regime.”
In Venezuela, the main focus is on crude oil. In Greenland, it’s on essential minerals mining, together with uncommon earths and uranium, and oil drilling. Greenland at the moment has moratoriums on each uranium mining and on oil drilling—minus grandfathered licenses that allowedone Texas firm to drill for oil this summer season. “There are plenty of ecological issues,” Lisaid.
Trump may theoretically finish these moratoriums and expedite allowing, primarily green-lighting Greenland for extra mining and oil drilling.
Nonetheless, “even green-lighting rhetorically isn’t going to result in seismic modifications in a single day,” Li mentioned, given the historic lack of success in mining and oil drilling exploration and the numerous years of infrastructure building required to construct a business trade. A “extra cooperative dialogue” with Greenland, Denmark, and NATO is a extra possible strategy, Li mentioned, than taking issues additional with annexation or army motion.
Present tensions apart, Greenland is keen to draw far more U.S. funding, simply not on the expense of possession and sovereignty, mentioned Christian Keldsen, managing director of the Greenland Enterprise Affiliation.
In any case, 97% of Greenland’s exports are seafood, principally shrimp. And Denmark’s subsidies account for over half of Greenland’s complete revenues. Mining is simply a tiny piece of the pie. Greenland needs the U.S. to put money into its mining and power sectors, even creating knowledge middle campuses within the spacious and chilly terrain that would show appropriate for such services, Keldsen mentioned.
Simply don’t conquer the icy and barren island. “We’re considerably irritated by this. We’ve had an open enterprise relationship with the U.S. for years,” Keldsen mentioned. “All this speak creates instability and noise within the background. And, if there’s something traders don’t like, it’s instability.”
What Trump needs
For all of the deal with seizing Greenland of late, it was a cosmetics inheritor who first put the bug in Trump’s ear throughout his first time period.
Again in 2018, throughout his first presidential time period, Trump’s longtime good friend, billionaire Ronald Lauder—from the household of Estée Lauder fame—mentioned with Trump the significance of Greenland’s assets and strategic Arctic positioning, particularly as ongoing world warming melts the ice sheets and creates extra passageways between the U.S. and Russia. (Lauder declined remark for this story.)
Shortly thereafter, Australian geologist Greg Barnes, who based the large Tanbreez uncommon earths mining challenge in Greenland, which stays in improvement, briefed Trump on the White Home. Final 12 months, New York-based Vital Metals acquired 92.5% possession of Tanbreez. A pilot challenge launched earlier in January, though full building is but to start.
“Within the nineteenth century, there was the gold increase. The twentieth century was the oil increase,” Vital Metals CEO Tony Sage instructed Fortune in a latest interview. “We’re within the uncommon earths increase now, however this increase goes to fund every little thing for the subsequent 30 to 50 years. Every part in your life wants uncommon earths.”
The rationale for buying Greenland might have much less to do with the financial case, and extra with Trump’s ego and his actual property background, mentioned historians and analysts who’re essential of the concept.
By a distinction of simply 8,000 sq. miles, an annexation of Greenland and its estimated 836,000 sq. miles would exceed the 1803 Louisiana Buy and its 828,000 sq. miles, doubtlessly making it the most important acquisition in U.S. historical past, famous David Silbey, a army historian at Cornell College.
“That is the most important land seize ever. He loves huge issues, large issues, he would say,” Silbey mentioned. “He’s a New York actual property man. He likes to seize land, and he grew up in a world the place bullying was a part of enterprise observe. He wish to bully, and he’s choosing on the little man.”
As a result of Greenland doesn’t “transfer the needle economically in any means, form, or type,” Trump following his actual property instincts is essentially the most logical reply, Silbey mentioned.
With regards to hugeness, don’t negate the distorted perspective of maps. The Mercator world maps that Trump and plenty of others grew up with, just like the one under, present a Greenland that’s seems to be virtually as giant as all of Africa. In reality, Greenland is one-fourteenth the dimensions of Africa, though it’s nonetheless after all fairly giant (greater than triple the geographic footprint of Texas).
Getty Photographs
“We attempt to rationalize irrational habits. That is traditional Trump ego politics,” mentioned Humpert of The Arctic Institute. “It’s about him placing a Trump tower in Nuuk and saying he made the U.S. bigger than some other president.”
Militarily, Humpert is fast to level out that China and Russia have extra ships and submarines touring close to Alaska’s coast than Greenland’s ice. “There’s some reality to the Arctic heating up and there being extra energy politics within the Arctic,” he mentioned. “However the [U.S.] ought to care for its personal yard first.”
Silbey agreed. Offshore of Greenland represents one of many quickest routes between the U.S. and Russia, however current protection treaties with Denmark give Trump all the needed army entry for bases and waterway patrols. From a overseas coverage standpoint, he mentioned, annexation “is simply categorically dumb. You’re blowing up NATO for entry you have already got.”
A doubtlessly extra cynical view comes from Daniel Immerwahr, overseas relations historian at Northwestern College. Immerwahr says Trump is abandoning the U.S.’s long-standing smooth energy diplomacy strategy—the U.S. maintains 750 army bases in different international locations—that was meant to keep away from wars over land and assets, and is now specializing in the old-school colonialism of possession and management, particularly within the Western Hemisphere
“It could be that we’re getting into a world of closed borders, wherein case it makes extra sense for safety causes to lock down the territories that comprise the stuff you want since you could be afraid another nation would shut commerce traces,” Immerwahr mentioned, citing essential minerals for example.
“China’s wishes on Taiwan and Russia’s invasion of Ukraine have corresponded to the extra closed annexationist mannequin,” he added. He additionally famous {that a} U.S. seizure of Greenland could be seen as a inexperienced mild for China and Russia to comply with go well with in their very own spheres of affect.
Trump has repeatedly insisted that, if the U.S. doesn’t purchase Greenland, then “Russia or China will take it over” and exploit its assets and strategic army positioning. However China has invested in lots of tasks in Greenland which have principally failed, and has largely pulled out since, mentioned Adam Lajeunesse, chair in Canadian and Arctic coverage at St. Francis Xavier College in Nova Scotia.
There’s no logic to a Chinese language or Russian takeover, particularly when Greenland has U.S. and NATO army backing, he mentioned.
“That’s a fantasy,” Lajeunesse mentioned. “The financial bogeyman the Trump administration is placing out there may be actually fairly fictitious.”
