U.S. Blocks China’s Rare Earth Play in Greenland: Strategic Move or Economic Rivalry?

The U.S. government has blocked China’s potential takeover of Greenland’s rare earth development project. According to a recent report by Reuters, the U.S. government exerted pressure on Tanbreeze Mining, the company responsible for managing Greenland’s Tanbreeze deposit, to avoid partnerships with Chinese entities.

Greg Barnes, CEO of Tanbreeze Mining, revealed that U.S. officials visited his company twice last year during a period of financial strain. They repeatedly urged the company to avoid deals with China. Consequently, Tanbreeze Mining struck an agreement with New York-based Critical Metals.

Tony Sage, CEO of Critical Metals, revealed that he felt intense pressure not to sell to China throughout the negotiation. Ultimately, Critical Metals secured the deal with a $5 million cash payment and $211 million shares—an offer reportedly less attractive than those from Chinese firms. This transaction underscores the economic rivalry between the U.S. and China over Greenland’s rare earth resources. Both companies refrained from disclosing specifics about their meetings with officials or the identities of the Chinese firms.

While Tanbreeze Mining aims to extract 500,000 tons of rare earths annually by 2026, the U.S. government’s efforts to counter China’s rare earth monopoly are far-reaching. Greenland’s rare earths have become a critical resource in the global market, where China currently holds a dominant position. President-elect Donald Trump’s consideration of purchasing Greenland was likely motivated by this ongoing competition for resource control.

Greenland, an autonomous territory of Denmark, is considered a major rare earth deposit, with complex economic interests between Western nations and China converging over these resources. The U.S.’s swift recognition of Greenland’s strategic value could become a geopolitical focal point, potentially reshaping trade relationships and political dynamics. Experts offer conflicting assessments of the Tanbreeze project’s scale and grade. David Merriman, research director at Project Blue, suggests that commercial production may face complexities, indicating a need to temper high expectations for the project.