President Donald Trump's threats to take control of Greenland are driving a new wave of investment in the island, which stands to profit from the strained relationship between the US and its European allies.
Mr Trump’s Greenland ambitions are two-fold: its untapped mineral wealth could accelerate his energy-dominance play. More importantly, its proximity to the Arctic and North Atlantic oceans make it a strategic location in monitoring Russian and Chinese military activity in the region.
Pouyan Kimiayjan, director of the applied geopolitics and strategy programme at the Institute for Peace and Diplomacy, said Mr Trump's attempts to gain greater control over the autonomous Danish territory had led to “unintended consequences”.
“It put Greenland in a very interesting position where it can leverage the competition between Washington and Brussels," he said.
This week, the EU shifted its focus to Greenland, where European Commission President Ursula von der Leyen offered a €200 million ($231.9 million) package to help it address climate change, boost internet connectivity, improve fisheries and other aspects of everyday life over the next two years. Additionally, Brussels has proposed doubling direct aid to Greenland to €530 million under the bloc's budget for 2028-2034.
Ms von der Leyen also signed a new joint declaration with leaders in Greenland and Denmark, which coincided with Nato's Arctic Shield military exercise. The annual event, which runs from September 7 to 18, brings together about 400 personnel from 11 allied nations to train near Narsarsuaq, in southern Greenland, and the Kangerlussuaq fjord system in the west of the island.
For Brussels, the message was clear.
“Greenland’s future is for the people of Greenland and Denmark to decide. No one else,” Ms von der Leyen said.
Frayed relations
US interests in Greenland predate the current Trump administration, nor is he the first president to seek involvement in it – former president Harry Truman, for example, wanted to purchase the island after the Second World War.
But Mr Trump's remarks about the territory further strained US-European relations already under stress over disagreements on defence spending and shifting trade policies. In January, he said he would not rule out military action to acquire the island of 57,000 people, which would lead to a crisis for the Nato alliance.
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And in April, Mr Trump lashed out against his Nato allies for their unwillingness to join US efforts against Iran. In one Truth Social post, he called Greenland a “poorly run piece of ice” and said Nato “wasn't there when we needed them”. The repeated threats roiled Europe.
“It's probably the most offensive action this administration taken beyond tariffs, beyond the political meddling in European elections,” said Chris Kennedy, lead for economic statecraft at Bloomberg Economics.
While tension over Greenland appears to have cooled since then, Mr Kennedy said it still served as a “wake-up call” for Europe.
So, too, was a recent vote in Iceland on whether to resume EU accession negotiations as concerns over the country's fisheries appeared to outweigh geopolitical stability.
“Given the persistent tensions in Greenland’s own relations with Denmark, the possibility of the Iceland vote influencing any local impulse to distance itself from the European ambit … I would imagine must be an operating concern for the EU, even if marginal,” said Cauvery Ganapthy, a fellow at the Observer Research Foundation Middle East.
Investor rush, but obstacles await
The private sector has also taken note of Mr Trump's Greenland ambitions.
US player Greenland Energy recently acquired UK metals company 80 Mile, which operates the Jameson Land basin and controls the Disko-Nuussuaq project, holding prospects for copper, nickel, cobalt and platinum group elements. Greenland Energy chairman Larry Swets is also aiming to raise up to $200 million by the end of 2027 to help build out aviation, maritime shipping, data centres and tourism infrastructure in Greenland under a new venture.
Mr Swets told Bloomberg that it would have been “much more difficult” for him to raise funds were it not for Mr Trump's Greenland rhetoric.
China's Shenghe Resources is a major investor in Greenland's Kvanefjeld mine. Saudi Arabia's Tariq Abdel Hadi Abdullah Al Qahtani & Brothers Company signed a non-binding agreement with New York-based Critical Metal Corp earlier this year for a joint venture that would include refining 25 per cent of rare-earth projects in Tanbreez, at the southern tip of Greenland.
Yet Greenland is fraught with investment risks. Aside from the industry-standard long-term delays within mining, the island’s geography and geopolitics make it a challenging investment climate.
Greenland Energy’s drilling campaign is already facing permitting delays, while the territory has blocked Australian company Energy Transition Minerals' plans to establish a mine because of uranium at the site.
Chinese efforts to modernise runways at Greenland's airports were blocked by Denmark, while the Kvanefjeld rare earth exploration project has been on hold over environmental concerns.
Experts also argue that Greenland's environment and lack of infrastructure pose challenges for any potential data centre buildout.
Despite the $232 million package on offer, Ms Ganapthy argued the EU will need the continent's private sector to get involved for it to become a trusted long-term economic partnership. “While the opportunity is undoubtedly great, the attendant risks to those investments could prove to be a substantive challenge,” she said.
