Why Donald Trump won’t buy Greenland’s rare earths

In La Tribune 27/08/2019

Hydrocarbon reserves were presented as the objective of a possible purchase of Greenland by Donald Trump, which is probably incorrect. On the one hand, the United States has more than enough shale oil and shale gas to the point of exporting it. On the other hand, recent underwater hydrocarbon exploration campaigns off Nuuk by a few major companies have discouraged possible exploitation because of the environmental difficulties so particular to the Far North.

In addition to the Russian-American geopolitical aspect inherited from the former Cold War, the real objective would be contextual to the current American-Chinese trade war: the United States would have sought to counter the possible, even illusory, threat of a Chinese embargo on exports of lanthanide (rare earth) products manufactured in its factories by Beijing, and used in particular by the US military industrial complex. But the weapon is dangerously double-edged: such a blockade by Beijing would in turn create further embargoes on other resources between China and Washington, and then, by a snowball effect, also between countries allied to both sides – the world of natural resources is never a one-way street.

Mining projects already underway in Greenland

Let’s go back to the rare earths of Greenland; China controlled about 90% of the world’s lanthanide mines, but this share is decreasing to 70%. And these figures do not include the potential exploitation of new resources, particularly those of Nuuk, which has two mining projects, Tanbreez Mining and Greenland Minerals, which are still at the authorization stage. Operating these two mines would further weaken Beijing’s dominant position.

But Donald Trump will not buy Greenland not only because Denmark and Greenland are opposed to it for the time being, but above all because European industry could have other projects for these lanthanides as part of a new European Arctic policy.

Obstacles on the road to La Rochelle (and not just icebergs)

Indeed, Europe, and in particular France, should decide whether certain lanthanides are strategic materials for them within a coordinated European policy. If so, then the rare earth refinery in La Rochelle, ideally placed to receive Greenlandic ore by ship, would become the only lanthanide processing plant outside China, since such a plant does not exist in the United States, weakening Washington’s rodomontades accordingly. This refining in France could be the starting point for a large-scale European industry, in direct competition with Chinese factories, and capable of supplying the electrical industries with permanent magnets.

But to get there, Tanbreez Mining and Greenland Minerals would have to find an interest. These two companies are Australian and the second company with the best reserves has, as its largest shareholder, a Chinese company, Shenge Resources. How can it be encouraged to divert the flow from its Kvanefjeld mine to La Rochelle when it has formed a joint venture with China National Nuclear Corporation to refine its future production in China? Should European funding be shown , or should a European lanthanide metallurgical industry be operational downstream of the Charentaise plant?

Or, more roughly, pointing out that the future maritime route of ore will necessarily pass through seas that do not yet exist because they are still ice packen ; it is the environmental protection that will prohibit such transportation perspective. At this stage of climate change, this ecological element is probably an additional favourable element in favour of a European solution.

Trump or the art of geopolitical diversion

Donald Trump’s statement therefore appeared to be a manoeuvre, a diversion, a decoy in his fight against Beijing. And if he is really interested in countering Chinese intimidation on lanthanides, his most effective strategy remains to produce rare earths from the American subsoil: the Mountain Pass mine in California can supply the country, just as other deposits located in Texas, Colorado, Wyoming or Alaska could be developed.

Finally, this “trumpian” episode confirms once again that the expression “rare metals” is a nonsense that straddles the gap between nothingness and stupidity since by producing these metals we reduce their geopolitical stakes, it is also a new revealer that the natural resources of the Far North must be protected by a new strategy of European influence in the Arctic.