The US is sabre-rattling over Greenland once again. The vast island’s natural resources are back on the agenda, a year after then-US national security advisor Michael Waltz announced: “This is about critical minerals. This is about natural resources.”

Greenland is endowed with both fossil fuels and critical raw materials. It possesses at least 25 of the 34 raw materials considered critical by the European Union.

The EU’s 2024 Critical Raw Materials Act seeks to improve European supply security of these, and both Trump and the EU want to weaken Chinese dominance in the trade. Meanwhile, vast reserves of oil are found offshore across eastern and western Greenland.

The value of these resources is hard to estimate as the prices of oil and critical raw materials fluctuate wildly. Like with Venezuela’s oil, it will take an enormous amount of money to build the infrastructure needed to mine the natural resources in Greenland. Mining and fossil fuel projects are capital-intensive, requiring large upfront investments with long lead times before projects yield profits.

Outside its capital Nuuk, there is almost no road infrastructure in Greenland and limited deep-water ports for large tankers and container ships.

Around the world, private mining and fossil fuel corporations can exploit public infrastructure such as roads, ports, power generation, housing and specialist workers to make their operations profitable. In Greenland, huge capital investment would be required to extract the first truckload of minerals and the first barrel of oil.

As such, the government faces a classic dilemma. Let private multinationals extract but lose the lion’s share of revenues? Or insist on state ownership but struggle to find the capital and state capacity to enable extraction.

Greenland’s mineral riches have been........

© The Conversation