The race for the Arctic’s critical minerals is heating up

A global scramble to exploit the Arctic’s untapped resources appears to be gearing up into overdrive.

In an effort to break China’s mining dominance, countries around the world are increasingly turning to the melting and sparsely populated Arctic region, seeking to seize its raw materials and exploit new commercial trade routes.

US President Donald Trump, for example, has repeatedly emphasized the importance of Greenland, a vast Arctic region, and called US ownership of the island an “absolute necessity” for economic and national security reasons.

Canada recently wanted Increasing investment in the Arctic as part of an initiative designed to unlock its resource potential, especially at a time when diplomatic relations with the United States are strained

Russia, which has a large Arctic coastline, has long considered the region a strategic priority. Indeed, on Tuesday, President Vladimir Putin was praised The construction of a new nuclear-powered icebreaker ship to navigate Arctic waters is “important to constantly strengthen Russia’s position in the region,” he says.

“The Arctic is seen as a source of many different raw materials, not only oil and gas, but also many strategic materials and rare earth elements,” Marc Lanteigne, an associate professor at the Norwegian Arctic University in Tromso, told CNBC by phone. he said.

“Greenland now has a lot of deposits of base metals, precious metals, gemstones, rare earths, uranium… it’s all there. The problem is that until recently it was considered completely impossible to extract them,” Lanteigne said.

“But with climate change and much more frequent navigation of the Arctic Ocean, especially during the summer months, Greenland is beginning to be examined much more carefully as a potential alternative source for many of these strategic materials for China.”

Greenland has been transformed by the climate crisis. A comprehensive analysis of historical satellite images, It was published A study last year by researchers at the University of Leeds in the United Kingdom showed that some of the autonomous Danish region’s ice sheet and glaciers had been replaced by wetlands, scrubland and barren rocky areas.

The massive loss of ice has inadvertently made some of the island’s strategic minerals more accessible to mining companies.

Tony Sage, CEO of Critical Metals, which is developing one of the world’s largest rare earth assets in southern Greenland, said there had been a significant increase in investor interest in Greenland in recent months, especially since Trump returned to office and raised the possibility of seizing control of the region.

“I remember in his first term, around 2018 and 2019, he made a big song and dance about the strategic value of rare earths in Greenland, even back then,” Sage told CNBC by phone.

In addition to Critical Metals, mining and exploration company Amaroq is also working to exploit some of Greenland’s resources. Amaroq CEO Eldur Olafsson, the company’s latest discovery The presence of high-grade rare earth elements in southern Greenland “means a lot to us.”

The project, which will take several years to develop, marks the company’s first foray into the rare earth field, expanding its interests beyond gold and other strategic minerals.

On November 11, just a week after the company announced its rare earth discovery approved Commercial levels of germanium and gallium are at its center in West Greenland, a development that could prove even more strategically important, according to Olafsson.

“The germanium, the gallium piece, to me, is much bigger news than people realize,” Olafsson told CNBC via video call. he said.

Germanium and gallium are essential components of a wide variety of goods, from electric vehicles to semiconductors to military applications.

China, the main global producer of these metals, imposed the first export controls on germanium and gallium in 2023 before singling out the United States with a sanction. direct ban It’s in response to restrictions Washington imposed on the chip industry late last year. Beijing has since suspended its ban on gallium and germanium exports to the United States, but the metals remain subject to restrictive measures.

“This is a mineral that the United States and the European Union need right now. Rare earths are processed by Lynas and MP Materials. This is something you can access, I wouldn’t say easier, but you can access… Germanium and gallium, if you don’t have them then that’s a huge problem,” Olafsson said.

“In terms of mining, we now have a short-term solution for mining zinc, lead, silver, germanium and gallium, while also developing the export of rare earth elements.”

Olafsson stated that it is important for the company to generate cash flow through its portfolio of gold and other strategic metals while trying to capitalize on the rare earth potential, noting that the rare earth market is still relatively small.

Asked whether the race for the Arctic’s resources could be compared to a gold rush, Lanteigne said: “This is where perception and reality come into play.”

He added: “There’s been a lot of discussion about a rush to develop mineral resources in Greenland, for example, but I can tell you, having been there a few times, that if you’re going to set up a mine, you literally have to bring everything.”

Even in ideal conditions, Lanteigne said logistical challenges such as Greenland’s harsh climate and remote geography mean it could take 15 to 20 years for companies to start making serious profits.

It’s not just Greenland. The struggle for minerals in the Arctic also extends to some of Sweden’s northernmost regions.

State-owned mining company LKAB is currently racing to develop one of Europe’s largest known rare earth deposits. Discovery of the so-called Per Geijer deposit Announced in 2023, the facility is located near the company’s massive iron ore mine in the Arctic city of Kiruna.