You probably do not remember, but back in 2019 or 2020, President Donald Trump spoke of acquiring Greenland from Denmark. This news event generated a little bit of steam, but you probably forgot about it, along with myself. I do remember watching Conan O’Brien, who flew out to Greenland, and was interviewing Greenlanders on the street on their thoughts of becoming American. The large response was that it was a joke and not even realistic. Now with Donald Trump being inaugurated for his second term next week, the Greenland acquisition has resurfaced. My initial reaction was that this was just political noise and did not deserve any amount of attention. However, on a deeper dive, this might prove to be highly strategic and of great importance to the United States.
Prior to President Andrew Johnson’s impeachment, the United States was making attempts to purchase Greenland. You might remember that Andrew Johnson was the president who purchased Alaska for $7 million from Russia. So, this is not the first time a United States President has pursued Greenland. Andrew Johnson was impeached prior to being able to purchase Greenland. Back in 1946, Denmark offered Greenland for sale for $100 million in gold to the United States, which obviously did not come to fruition. Now, this is back on the table by President Trump.
There are three main reasons that Trump is probably looking at Greenland, which is strategic location, rare earth minerals, and uranium.
Looking at a map, Greenland is located in-between Europe and Canada. But, the view is a little misleading on a 2D map. Grab a globe and you will that Greenland is actually north of Canada and Moscow is closer to the United States than Rome. When flying a plane, headed to Europe, the plane heads northeast towards Greenland and basically goes up and over with the curvature of the earth. Greenland is actually at very center between Russia, Europe and North America. So, the acquisition of Greenland is a very strategic defensive location from Russia.
Greenland is largely unmined. In fact, Reuters reports that Greenland is loaded with rare earth minerals and it is completely untapped. Greenland is largely unpopulated and controlled by Denmark, who do not have the resources to extract these minerals. So, the United States and China definitely have the resources to setup shop in Greenland. According to Newsweek, the United States is currently importing 72% of our rare earth minerals from China. The Greenland acquisition could largely eliminate our reliance on China for rare earth minerals. China is currently producing 61% of all rare earth minerals. (https://www.newsweek.com/chart-shows-world-dependence-china-rare-earth-minerals-1914704)
Greenland is loaded with uranium, which is essential for nuclear power. Most of the worlds uranium is mined in Kazakhstan by almost 3X the amount of the second largest country, which is Canada, according to Statista (https://www.statista.com/statistics/263550/mine-production-of-uranium-by-country/). The United States is almost entirely dependent on foreign countries for uranium with 40.5 million pounds purchased in 2022. Of that 32.1 million pounds of uranium were purchased and imported from the United States with 27% from Canada, 25% from Kazakhstan, and 12% from Russia. The Greenland acquisition could alleviate foreign dependance on uranium.
So, the main question is, would Denmark be open to discussion with the United States for a purchase or partnership for Greenland? From a cursory review, Greenlanders want to be independent. But, this appears to be unlikely given that Greenland is dependent upon funding from Denmark. Denmark provides almost DKK 3.9 billion a year, which is the equivalent of over $500 million. This is approximately 20% of Greenland’s GDP and pays for approximately 60% of their government operations. The average income in Greenland is just $33,000 as well. Denmark does provide military support as well, but the Greenlanders are self-governed. So, the answer to the question is that it would difficult to structure a deal. The United States would have to incentivize Demark, which has a national debt of $125 billion, or only 36.67% of their GDP, according to WorldDebtClocks.com. But, the United States could easily wipe out their debts and then some more with just a fraction of our GDP. Their GDP is just $342 billion compared to our $18 trillion. So, it is my opinion that a partnership or royalties would be required from the United States.
