The Trump administration has touted the U.S. agreement with Denmark and Greenland as strengthening American security in the strategically important Arctic region.

The deal, announced by President Donald Trump on Truth Social, could have deeper economic implications for the United States and Greenland. The world’s largest island could emerge as a strategic alternative to Chinese dominance of rare earth elements.

Trump has warned that China and Russia desire a foothold there and that only the US could keep them out. He has also viewed the Arctic island of 56,000 people as a national economic priority, given the rare earths and oil under the ground. 

The deal provides the United States the power to bar who can tap Greenland’s vast critical minerals and mining sectors, POLITICO reported, citing the State Department. The provisions appear designed to block China or Russia from doing business or establishing a military footprint in Greenland. 

"Greenland will forever be part of the strategic defense area of North America and exclude any adversary from it and the surrounding area," U.S. Secretary of State Marco Rubio posted on X on Saturday. "This deal permanently and completely addresses our national security concerns in Greenland." 

Rare Earth Resources

The commercial stakes are considerable in the semi-autonomous territory that’s part of the Kingdom of Denmark.

The Kvanefjeld deposit in southern Greenland ranks among the world’s largest rare earth resources. Energy Transition Minerals, the project’s owner, reports 1 billion tonnes of ore grading 1.1% total rare earth oxides. 

"Greenland is becoming one of the most strategically important regions in the world," Bo Møller Stensgaard, President of Greenland Mines Ltd., said. "The same strategic importance extends to the critical minerals required for defense, advanced technology, and energy security." 

Greenland Mines (NASDAQ:GRML) has positioned itself to tap arctic island’s critical minerals. On September 1, the Charlotte, N.C.-based critical minerals developer closed its purchase of the Sarfartoq Nd-Pr Rare Earths Project in southwest Greenland. 

The company announced that it planned to produce NdPr oxide. The compound of neodymium and praseodymium is used in the manufacturing of magnets for EVs and wind turbine. The $2.05 billion project could produce about one-third of the amount refined globally outside of China. 

U.S. Companies Seeking Opportunities

Other U.S. companies are pursuing rare earth projects in Greenland. 

Critical Metals Corp. (NASDAQ:CRML) announced on Wednesday that it made a breakthrough at its Tanbreez heavy rare earth project. Its processed over 99% of the dissolution of eudialyte concentrate into 19 ultra-high-purity rare earth and critical metal products. 

Critical Metals secured in May a long-term offtake partnership with US-based magnet manufacturer REalloys (NASDAQ:ALOY)for the production of rare earth concentrates from Tanbreez. The agreement includes a 15-year offtake partnership, covering up to 15% of the project’s annual production. 

Despite the interest, Greenland’s resources remain largely untapped in a land mass roughly the size of Alaska and Texas combined. 

Arctic Reality Check 

The Arctic environment is the reason. 

Outside the capital, Nuuk, towns depend on air service, ships, and dog sleds up north. Its remote location, harsh climate, and limited infrastructure significantly increase extraction costs. 

The island "is believed to be rich in resources, but two-thirds of it lie above the Arctic Circle," S&P Global said in January. "Although Greenland represents one of the last frontiers for mineral exploration, the ice sheet that covers 80% of it makes it difficult to study the underlying geology in detail and prevents access to potential resources." 

As of mid-2026, Greenland had just two active mines at any scale. The Nalunaq gold mine restarted in late 2024, and the White Mountain anorthosite mine, which supplies material for fiberglass insulation. 

A ruby and pink sapphire mine operated from 2017 to 2022 but has been shut down since 2023 amid financial restructuring. 

"You’re not just doing the mining itself," former U.S. diplomat Lewis Lukens told Bloomberg This Weekend. "You’re also having to build a port, build roads within that community to be able to extract and ship out these minerals. It’s not one before the other. It all has to happen simultaneously."

What Comes Next 

Greenland’s Prime Minister Jens-Frederik Nielsen, who has previously ruled out ceding sovereignty, said he was encouraged by the accord. It "recognizes Greenland’s interests and our place in international cooperation," Nielsen said.

The agreement is expected to be formally signed during the UN General Assembly next week. It will still require the necessary parliamentary procedures in Denmark and Greenland. 

The deal could provide much-needed investment for the territory. 

"They desperately need hotels here, and also mining," Lukens said. "The infrastructure needs to kind of create or to develop the mining industry here. It’s very harsh terrain. It’s a very difficult place to do business."