How Greenland became one of the most valuable places on Earth

Putting a price on the Arctic frontier

What if the world's biggest island was also one of the most valuable, worth more than Tesla and Amazon combined? Greenland may look like a frozen wilderness. But as its massive ice sheet recedes, vast deposits of coveted rare earth minerals and energy resources are becoming accessible. Add newly navigable shipping routes and its strategic location, and this autonomous territory of Denmark is turning into a global geopolitical powerhouse.

With the Trump administration eyeing the prized island, and China and Russia also watching closely, click or scroll on to discover what it could actually be worth.

All dollar values in US dollars

Why Greenland seems unimpressive... for now

At first glance, Greenland isn't all that covetable. With just 57,000 people scattered across a frigid landscape, life in the autonomous territory is quiet and the economy is tiny, with a GDP of only $3.2 billion (£2.4bn), similar to Belize or Burundi. Fishing, shrimp exports and generous Danish subsidies are what keep things ticking over, and most of the island is still covered by ice.

Right now, Greenland appears remote and unimpressive. Yet beneath the ice lies a hugely lucrative future just waiting to be unlocked.

Global warming is unlocking Greenland's wealth

Climate change is changing everything. With the Arctic warming faster than anywhere else on the planet, Greenland's humongous ice sheet is rapidly retreating, revealing vast deposits of rare earth minerals and other valuable resources for the first time.

Meanwhile, melting Arctic ice is opening new shipping routes, potentially cutting months off trade between Europe, Asia and North America. What seems like a frozen backwater today is fast becoming a hotspot for natural resources and strategic Arctic influence.

Global powers eye Greenland

China and Russia have already latched on to Greenland's amazing potential. Beijing has been investing in Arctic shipping and mining projects, while Moscow is expanding its military and commercial presence in the region.

The US military already has a base on the island (pictured) and the right to build as many as it wishes. But securing Greenland would give America a major strategic foothold and full access to the territory's enormous untapped wealth.

America's historical offers for Greenland

The US has attempted to buy Greenland before, but the historical offers were minuscule by today's standards.

In 1946, for instance, President Truman's administration offered Denmark a mere $100 million in gold bullion, roughly $1.7 billion (£1.3bn) in today's money. Relative to US GDP, that was just 0.04%. By comparison, even modest estimates of Greenland's resource wealth today dwarf that figure.

Reported US offer to Greenlanders

The Trump administration is considering paying Greenlanders up to $100,000 (£74k) per person to smooth any purchase, according to Reuters. The bill would total $5.7 billion (£4.2bn) based on the territory's population.

While any deal would also no doubt include a substantial sum paid to the Greenland and Danish governments, it's nonetheless worth pointing out that the $5.7 billion (£4.2bn) offer falls way short of current estimates of the island's potential riches.

Greenland's bountiful natural resources

Greenland's mineral and energy reserves are nothing short of jaw-dropping. Known resources include much sought-after rare earth elements, copper, nickel, uranium, oil and natural gas. Together, they're valued at more than $4.4 trillion (£3.3tn). Excluding oil and natural gas, which Greenland has restricted for environmental reasons, the total still tops $2.7 trillion (£2tn).

Yet not all of this is economically extractable today. Harsh climate, limited infrastructure and a tiny workforce mean only a fraction of Greenland’s treasure is accessible, though that fraction still represents a wow-factor opportunity.

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Greenland's economic downsides

Even with all its potential, Greenland's cold conditions, lack of infrastructure and small workforce are major stumbling blocks. For example, while there are more than 36 million metric tonnes of known rare earths, only 1.5 million tonnes are considered actual reserves, a conversion rate of just 4.2%. Clearly, the island requires bewildering levels of investment.

Applied across the board, the lower-bound value of Greenland's economically viable resources drops to about $186 billion (£138bn). Still, this figure is far higher than its current GDP and puts the 1946 US offer and more recent proposal firmly in the shade.

Greenland's increasing strategic economic might

Greenland isn't just about resources of course. Its plum location gives access to those all-important emerging Arctic shipping lanes and a critical military vantage point. Using Iceland as a proxy, the American Action Forum think-tank estimates that Greenland's strategic location alone could be worth nearly $2.8 trillion (£2.1tn).

Securing the island would deter rivals like China and Russia, and give the US unprecedented control over the new Arctic trade routes.

Greenland valuations vary widely

Analysts actually differ widely when it comes to Greenland's potential value. In 2019, The Financial Times conservatively pegged it at $1.1 trillion (£816bn), while UCL professor Iwan Morgan suggested it could hit multiple trillions of dollars.

That said, last year former New York Fed economist David Barker went for between a relatively modest $12.5 billion (£9.3bn) and $77 billion (£57.1bn), though his estimates were calculated by adjusting past US land purchases for GDP growth rather than estimating the island's resource and strategic worth.

Greenland isn't up for sale

Despite all this, Greenland remains strictly off-limits to buyers. Denmark and its non-US Nato allies have repeatedly stated the island is not for sale, no matter how much is on the table.

Recent opinion polls have revealed most Greenlanders oppose any sale to the US and favour independence from Denmark, prioritising autonomy over economic gain. For now at least, the world's largest island is truly priceless, a non-negotiable frozen treasure that money simply cannot buy.

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