BUSINESS

Even Before Trump’s Greenland Dreams, the Island Proved Tough for Chinese Miners

Published: Jan. 13, 2025 8:27 p.m. GMT+8

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Even before President-elect Donald Trump began to show an interest in the U.S. acquiring Greenland, the island had proved a tough bet for Chinese companies.

Mining firms, eager to exploit Greenland’s rich rare earth resources, have struggled to establish a foothold in the face of local and U.S. resistance. The island was a colony of Denmark from 1721 until 1953 but is now an autonomous territory within the kingdom.

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Chinese companies have faced significant challenges entering Greenland's mining sector, with attempts thwarted by U.S. and local resistance, as seen in the stalled projects of Kvanefjeld and Tanbreez mines.
Shenghe Resources has not exercised its option to expand ownership in GM’s Kvanefjeld project due to Greenland's legal restrictions on uranium, leading to ongoing arbitration for project rights.
U.S. influence has deterred Chinese investment in Greenland, aiming to limit China's control over rare earth elements, crucial to various industries, though China produces 60% of global supply.

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Who’s Who

Shenghe Resources Holding Co., Ltd.: Shenghe Resources Holding Co., Ltd. is a Chinese mining firm with a significant interest in Greenland's rare earth mining sector. It holds an 8.93% stake in Energy Transition Minerals Ltd. and a 12.5% stake in Greenland Minerals Ltd., including an option to increase its stake in the Kvanefjeld project. Despite these interests, Shenghe has faced challenges due to local and U.S. resistance and has not exercised its option to expand its holdings.

Greenland Minerals Ltd.: Greenland Minerals Ltd. (GM) is a subsidiary of Australia-based Energy Transition Minerals Ltd. (ETM). It manages the Kvanefjeld project in Greenland, containing rare earth elements, uranium, and zinc. Shenghe Resources Holding Co. Ltd. acquired a 12.5% stake in GM, with an option for 60%, but hasn't exercised it. ETM faces legal challenges due to a Greenland law against uranium mining, leading to arbitration to clarify GM's rights to the project.

Energy Transition Minerals Ltd.: Energy Transition Minerals Ltd. (ETM) is an Australian company involved in the Kvanefjeld project in Greenland, which contains significant rare earth elements, uranium, and zinc deposits. The company has faced challenges since Greenland's government passed a law blocking uranium-rich mining projects. ETM sought arbitration in Copenhagen in July 2023 to address alleged breaches of contract by Greenland and Denmark. As of the end of 2023, Shenghe Resources Holding Co. Ltd. held an 8.93% stake in ETM.

Tanbreez Mining: Tanbreez Mining's project in Greenland contains rare earth elements, zirconium, tantalum, hafnium, and niobium. The U.S. pressured the company not to sell the project to Chinese interests. In June, the controlling interest was sold to U.S.-based Critical Metals Corp. despite higher offers from Chinese firms, as part of a broader effort by the U.S. to reduce China's dominance in the rare earth sector.

Critical Metals Corp.: Critical Metals Corp. is a U.S.-based company that acquired the controlling interest in Greenland's Tanbreez mine in June after U.S. officials lobbied for the project to stay out of Chinese hands. CEO Tony Sage noted that Greg Barnes, CEO of Tanbreez Mining, accepted a lower offer from Critical Metals due to significant pressure not to sell to China, highlighting U.S. efforts to counter China's influence in the rare earth minerals sector.

Northern Minerals: In June, Australia ordered China-linked investors, including Yuxiao Fund, to sell their stake in Northern Minerals on national interest grounds. This action is part of broader efforts to limit Chinese influence in the rare earth sector.

Vital Metals Ltd.: Vital Metals Ltd. is an Australian mining company that agreed to sell its stockpiled rare earth materials to the Saskatchewan Research Council. This transaction, facilitated by Canada's government, was aimed at preventing the sale of the stockpile to Shenghe, a Chinese company. The move is part of efforts to reduce dependence on China for rare earth elements.

Yuxiao Fund: Yuxiao Fund is mentioned in the article as one of the China-linked investors that the Australian government ordered to sell its stake in Northern Minerals in June, citing national interest concerns. The directive reflects efforts to limit Chinese influence in the rare earth mining sector amid global geopolitical tensions regarding resource control.

AI generated, for reference only

What Happened When

Before President-elect Donald Trump began to show an interest：: Greenland had already proved a tough bet for Chinese companies due to local and U.S. resistance.

September 2016：: Shenghe acquired a 12.5% stake in Greenland Minerals Ltd. and got the option to buy up to 60% of the Kvanefjeld project.

Late 2021：: Greenland's newly elected government blocked the Kvanefjeld project by passing a law prohibiting certain uranium deposit-associated mining activities.