If history has taught us one lesson, it’s this: Whoever controls the water holds the power. In 1803, the United States took this idea to heart and made one of its most important moves.

At the time, the Mississippi River was the heartbeat of the young nation, driving trade and connecting budding markets. But there was a problem—the river, along with the all-important port of New Orleans, was under French control. For Napoleon Bonaparte, juggling the massive Louisiana Territory while fighting a war with Britain was becoming impossible. He needed money to fund his battles.

Enter Thomas Jefferson, the third president of the United States. Jefferson saw an opportunity and acted swiftly. For $15 million, his administration struck a deal with France to buy the Louisiana Territory. This wasn’t just a land deal—it doubled the size of the United States overnight. More importantly, it gave America control of crucial trade routes, setting the stage for its rise as an economic powerhouse.

Fast forward to today, and history seems to be repeating itself. President-elect Donald Trump has reignited his interest in purchasing Greenland, the largest island in the world, citing security reasons.

If controlling the Mississippi was pivotal for America’s growth in 1803, controlling Greenland might just be the modern equivalent.

But the United States isn’t the only power eyeing Greenland’s potential. Russia and China, two of the world’s other major superpowers, are also making strategic moves to stake their claims over the island. But why are nations competing to control a landmass that is mostly covered in ice?

Before we dive into these answers, we must first take a step back and explore Greenland’s history and origins.

Who owns Greenland? 

For over 600 years, Greenland has been part of Denmark. While Greenland enjoys a certain degree of autonomy and manages its domestic affairs independently, Denmark still oversees its defense and foreign relations. It also provides significant financial support — approximately $600 million annually — covering about two-thirds of Greenland’s budget. This lifeline sustains the island’s small population of roughly 56,000, scattered across one of the most remote and inhospitable regions on Earth.

Greenland’s strategic importance has long attracted the attention of global superpowers. During World War II, it served as a critical waypoint for transatlantic flights and a supply hub for Allied forces. Later, during the Cold War, the island became a frontline in Arctic defense. 

The U.S. established Thule Air Base, which played a pivotal role in missile detection and early warning radar systems as part of the Distant Early Warning (DEW) Line. Greenland’s icy expanse was more than a frozen frontier—it was a cornerstone of U.S. efforts to monitor and counter Soviet threats.

However, after the Cold War, Greenland faded from the geopolitical spotlight. The U.S. and much of the world turned their focus elsewhere, and the island’s strategic relevance seemed to wane. That is until an enormous environmental phenomenon—global warming — brought Greenland back into relevance.

Heated battle

Global warming is leaving its mark on every corner of the Earth, with rising sea levels, soaring temperatures, and unpredictable weather patterns. Yet, its most profound impact is being felt in a place largely untouched by human activity: the Arctic.

The Arctic is warming at an alarming rate, nearly four times faster than the global average. This rapid warming is causing an increased melting of ice, with the region losing approximately 13% of its ice per decade.

But what does this mean for Greenland? 

This dramatic change profoundly affects Greenland, which sits at the gateway to the Arctic. Greenland’s massive ice sheet, covering 80% of the island, is one of the largest in the world. It is now losing ice at an astonishing rate of 270 billion metric tons annually, contributing significantly to global sea level rise and reshaping the island's geopolitical and economic significance. 

The melting Arctic is unveiling new shipping routes that are capturing global attention, positioning Greenland at the heart of this transformative shift in trade and geopolitics.

New shipping routes

As Arctic ice continues to melt, new shipping routes are opening up. The Northern Sea Route, the Northwest Passage, and the Transpolar Sea Route are gaining attention as alternatives to traditional pathways like the Suez and Panama Canal.

These Arctic routes could shorten shipping distances by as much as 40%, saving time and reducing costs for companies. For instance, the Northern Sea Route, which connects Asia and Europe, can cut transit times by 10-15 days—a tempting prospect for shipping lines looking to streamline operations.

The economic benefits of these shorter routes are clear. Lower fuel consumption and faster delivery times mean significant savings. According to estimates from Russia’s Ministry for the Development of the Far East and the Arctic, Arctic shipping could save companies billions of dollars annually as these routes become more accessible. 

According to Arctic Meltdown: The Economic and Security Implications of Global Warming, the Northwest Passage could trim voyage distance by 2,000 nautical miles, making it nearly 25% shorter than the current route through the Panama Canal.

This reduction in distance, when combined with savings on canal fees, fuel costs, and other freight rate variables, could lower the cost of a single voyage by a large container ship by up to 20% — from approximately $17.5 million to $14 million. 

Additionally, key commodities like LNG, electronics, and raw materials – imports from Asia and Europe — could reach U.S. markets faster, reducing lead times and inventory costs. For consumers, this translates to lower prices on everyday goods. 

The significance of these routes extends far beyond economic benefits. Traditionally, chokepoints like the Suez Canal, controlled by Egypt, or the Panama Canal, governed by Panama, have been critical for global trade but also potential vulnerabilities. 

Any disruption, whether due to geopolitical tensions, blockages, or natural disasters, can have catastrophic ripple effects on the global supply chain. Arctic shipping routes bypass these chokepoints entirely, offering an alternative that could reduce reliance on these narrow passageways.

China, always quick to spot opportunity, has been building its presence in the Arctic. As part of its broader Belt and Road strategy, China has begun trial voyages along the Northern Sea Route through its ‘Polar Silk Road’ initiative.

China’s aim is to integrate Arctic shipping lanes into global trade networks and solidify its position as a leader in this emerging frontier. Recent voyages by Chinese shipping firms between Shanghai and St. Petersburg signal growing interest and ambition in this region.

Despite the potential, Arctic shipping routes witness negligible transit in a year when compared to major routes. For example, in 2022, only 1,700 ships entered the Arctic, compared to over 23,000 that passed through the Suez Canal. 

But long-term prospects, especially for the Transpolar Sea Route, are promising. Cutting directly across the Arctic Ocean, it could one day bypass chokepoints like the Suez Canal entirely. 

Greenland is at the heart of this Arctic transformation. Its location near key Arctic routes makes it an ideal hub for transshipment and refueling. As Arctic shipping increases, Greenland can grow its economy and become a major player in global logistics. This is precisely what has ignited a fierce competition among superpowers, each vying for dominance over Greenland's unmatched strategic and economic potential.

Interestingly, as Greenland’s ice melts, it reveals a treasure trove of natural resources that were once hidden beneath the frozen surface. Rare earth minerals, essential for technologies like renewable energy and electronics, along with oil and natural gas, are now potentially within reach. This has caught the attention of global powers and big companies, all eager to explore these untapped riches.

Let’s dig deep into the mineral story of Greenland.

Untapped potential 

Greenland’s vast natural resources are redefining its significance on the global stage. Beneath its ice-covered landscape lies a treasure trove of materials critical to the modern economy, including rare earth minerals and uranium. These resources position the island as a key player in shaping the future of green energy.

So, what makes these critical minerals so vital? 

Minerals like copper, lithium, nickel, cobalt, and rare earth elements are essential for many of today’s rapidly advancing clean energy technologies. From wind turbines and electric vehicles to electricity networks, these materials are the backbone of the global transition to cleaner energy. As this shift gains momentum, the demand for these minerals is growing at an unprecedented pace.

Greenland, with its immense geological potential, is stepping into the spotlight. A 2023 survey revealed that the island contains 25 of the 34 critical minerals identified by the European Commission. 

The Kvanefjeld deposit alone is estimated to hold over 1 billion tonnes of ore rich in rare earth oxides. Similarly, the Motzfeldt region contains around 130 million tonnes of ore with significant concentrations of niobium and tantalum, which are vital for applications ranging from medical imaging devices to particle accelerators and fusion reactors. 

Meanwhile, the Amitsoq graphite project is known for its high-grade graphite, a key component in electric vehicle batteries.

According to the U.S. Geological Survey, the island is estimated to hold 1.5 million tons of these valuable reserves, nearly rivaling the 1.8 million tons found in China.

In addition to rare earth elements, Greenland is estimated to have approximately 17.5 billion barrels of untapped oil and 148.2 trillion cubic feet of natural gas, according to the U.S. Geological Survey data. 

Despite these remarkable reserves — including uranium, copper, nickel, zinc, and other critical materials — Greenland’s mineral wealth remains largely untapped. 

This immense wealth of mineral resources has turned Greenland into a strategic hotspot, drawing intense competition from global superpowers like the US, China, and Russia, all eager to secure their share.

Chinese influence

China is already the undisputed leader in the global critical mineral supply chain. It produces approximately 70% of the world's rare earth elements and controls nearly 85% of rare earth processing capabilities.

Adding Greenland’s vast mineral reserves to its portfolio would further solidify China’s position, potentially tilting the global power scale even more firmly in its favor.

For years, Beijing has sought to establish itself as a stakeholder in Greenland’s resources, going so far as to label itself a “near-Arctic state” despite being 900 miles from the Arctic region.

China’s interest in Greenland is not new. Over the past decade, Chinese companies have actively pursued mining projects on the island. For example, Shenghe Resources, a partially state-owned enterprise, invested in the Kvanefjeld rare earth project, which boasts one of the largest deposits of rare earth elements globally. This project was seen as a strategic move by China to secure Greenland’s resources and strengthen its grip on the rare earth market.

However, China’s ambitions in Greenland have not gone unchecked. The United States, wary of Beijing's growing influence in the Arctic, has actively intervened to block Chinese efforts.

In 2021, a Chinese bid to purchase an abandoned naval base in Greenland was thwarted by Denmark, Greenland’s sovereign state, after significant U.S. pressure. Similarly, the U.S. strongly opposed Shenghe Resources’ involvement in Greenland’s rare earth mining, leading to Greenland canceling the Kvanefjeld project in 2021. 

Deal or no deal

Interestingly, President Trump isn’t the first U.S. leader to suggest buying Greenland. The idea of acquiring the island dates back to the 1860s during President Andrew Johnson’s administration. At the time, the U.S. was looking to expand its territory, but the attempt to purchase Greenland never gained traction.

In recent years, the U.S. has ramped up efforts to strengthen ties with Greenland, reopening its consulate in Nuuk in 2020 after nearly seven decades. The incoming Trump administration has also been vocal about the US’s ties with Greenland. 

Final words

In the coming years, the competition for Greenland will only intensify. Nations will likely expand their diplomatic, economic, and military presence in the Arctic, with the U.S., China, and Russia leading the charge. The struggle over critical minerals will drive new partnerships and rivalries, with Greenland’s untapped reserves playing a pivotal role in shaping the future of clean energy technologies. 

Meanwhile, the Arctic shipping lanes, although developing, could become the arteries of global trade by mid-century, making Greenland a key logistical hub.

This newsletter was written by Shyam Gowtham

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