Greenland's rare-earth deposits are characterized as low-grade and costly, with production timelines extending at least a decade into the future. The U.S. government's interest in these resources is complicated by China's dominance in processing, which limits any immediate strategic advantage for Washington. Investor enthusiasm has surged in response to political developments, particularly following remarks from former U.S. President Donald Trump regarding the potential acquisition of Greenland for national security reasons, citing concerns over Russian and Chinese activities in the Arctic.

Shares of companies involved in rare earth projects in Greenland saw significant increases after Trump's comments, with Critical Metals Corp and Energy Transition Minerals experiencing jumps of approximately 25% and 30%, respectively. Greenland's strategic importance is underscored by its location between the U.S. and Russia, as well as its proximity to emerging Arctic shipping routes that could enhance transit efficiency.

The White House views Greenland's resources as a means to mitigate China's control over rare earth elements, which are critical for various technologies, including electric vehicles and renewable energy systems. However, experts have expressed skepticism about the viability of mining in Greenland, citing harsh weather conditions and the necessity of processing mined materials in China.

The quality of ore in Greenland is a central concern, as the concentrations of rare earths are significantly lower than those found in established mines in the U.S., China, and Australia. While Greenland contains large volumes of rare-earth-bearing rock, the low grades—often less than 1%—result in higher extraction costs and logistical challenges, particularly given the territory's limited infrastructure.

Industry experts indicate that even under optimistic scenarios, production from Greenland would not materialize for at least a decade. The processing of rare earths remains a critical bottleneck, with China controlling approximately 90% of global refining capabilities. This monopoly gives China substantial leverage over supply chains, particularly in sectors reliant on rare earths.

Despite the U.S. government's focus on Greenland, domestic reserves of rare earths are estimated at 1.9 million tonnes, surpassing Greenland's estimated 1.5 million tonnes. Environmental and political opposition to mining in Greenland further complicates the situation, suggesting that the U.S. could more effectively secure its rare earth needs through domestic sources. Analysts have noted a disconnect between political ambitions and economic realities, emphasizing that securing new rare earths in Greenland is unlikely to address existing supply chain vulnerabilities.