Wood Mackenzie finds Greenland's rare earth sector faces multi-year development delays despite eighth-place global reserve ranking

Greenland's rare earth metals and minerals deposits remain undeveloped despite ranking eighth globally for reserves, with geographic constraints, regulatory restrictions, and infrastructure deficits presenting barriers to commercial production, according to Wood Mackenzie's latest analysis.

The report "Polar prize? The realities of developing Greenland's rare earth potential" examines why the territory has no active mines even as supply chain diversification away from China became a key industry driver through 2025. The European Commission estimated Greenland has potential to produce 27 of the 34 minerals it defines as critical under its Critical Raw Materials Act. Most rare earth projects remain in early-stage development despite some being active for over a decade.

Key project status:

• Energy Transition Metals' Kvanefjeld project has been stalled since early 2022 due to legal challenges over uranium content exceeding 300 parts per million—above Greenland's 100 ppm limit established in December 2021. ETM began work in 2007. The project planned 30 kt REO per year production.
• Critical Metals' Tanbreez project received a US$120 million Letter of Interest from the US Export-Import Bank and plans a mid-2026 pilot facility. The deposit grades 0.4-0.6% total rare earth oxides but is enriched in heavy rare earths. Tanbreez has joint ventures with Romania's FPCU (50% of concentrate), Saudi Arabia's TQB (25%), and would supply Ucore Rare Metals planned Louisiana facility.
• Motzfeldt (0.260% TREO) completed exploratory drilling only. Gronnedal shows 0.63% REO. Neo Performance Materials' Sarfartoq remains in earliest exploration stage.

Infrastructure and climate constraints

Companies would need to create their own transport and energy infrastructure. The local population is small and the lack of an established mining sector means imported skilled labour. Only southwestern ports operate year-round. Only Nuuk has modern port infrastructure.

Freezing temperatures, high snowfall and limited daylight hours create harsh operating conditions. Access to many areas is limited to air travel with frequent weather disruptions.

Regulatory environment

Mining development remains contentious. In 2021 the Inuit Ataqatigiit party won the highest number of seats following a campaign centred on opposition to the Kvanefjeld project. In December 2021 Greenland's Parliament banned uranium exploration and exploitation. The Democrats, who support private-sector resource utilization, became the largest party in 2025, but Greenland's current Minister of Industry, Raw Materials, Mining and Energy remains affiliated with Inuit Ataqatigiit.

Greenland's Mineral Resources Strategy 2025-2029 emphasizes sustainability and high environmental standards. The territory established a memorandum of understanding with the US government on mineral development in 2019 and an EU partnership on sustainable raw materials in 2023. Efforts to renew the US partnership have stalled.

China's Shenghe Resources Holding Co holds 6.5% ownership of Energy Transition Metals. In 2025 Greenland's business and mineral resources minister warned the US and EU that continued hesitation could force consideration of Chinese investors.

Development outlook

Administrative changes could reduce compliance requirements or direct capital to the sector but could not overcome climatic and geographic challenges.

"Projects in Greenland must compete for investment with projects in countries such as Canada, Australia and the US that have more developed infrastructure and established mining sectors," adds David Riley, Senior Research Analyst at Wood Mackenzie. "The lack of infrastructure, low labour pool and high capital requirements are the main barriers to development. We expect these to remain major limiting factors on Greenland's ability to establish a rare earth mining sector, irrespective of whether Greenland remains a Danish territory, becomes a US territory, or looks to independence."