A cold gold rush? The race for the Arctic’s critical minerals is heating up

A global scramble to exploit the Arctic’s untapped resources appears to be kicking into overdrive.

In a push to break China’s mineral dominance, countries around the world are increasingly turning to the thawing and sparsely populated northern polar region, seeking to seize its raw materials and benefit from new commercial trade routes.

U.S. President Donald Trump, for example, has repeatedly underscored the importance of Greenland, a vast Arctic territory, calling U.S. ownership of the island an “absolute necessity” for economic and national security reasons.

Canada has recently sought to ramp up Arctic investment as part of a push designed to unlock its resource potential, particularly amid strained diplomatic ties with the U.S.

Russia, which has a sprawling Arctic coastline, has long recognized the region as a strategic priority. Indeed, President Vladimir Putin on Tuesday lauded the construction of a new nuclear-powered icebreaker ship to navigate Arctic waters, saying “it’s important to consistently strengthen Russia’s position” in the region.

“The Arctic is seen as a source of a lot of different raw materials, not only oil and gas, but a lot of strategic materials and rare earths,” Marc Lanteigne, associate professor at the Arctic University of Norway in Tromso, told CNBC by telephone.

“Greenland, right now, is a repository of a lot of base metals, precious metals, gem stones, rare earths, uranium … it’s all there. The problem is that up until recently, it was seen as completely unviable to actually mine them,” Lanteigne said.

“But with climate change and the ability to navigate the Arctic Ocean much more frequently, especially during the summer months, Greenland is starting to be looked at much more carefully as a potential alternative source for a lot of these strategic materials to China.”

Greenland has been transformed by the climate crisis. A major analysis of historic satellite images, published last year by researchers at the U.K.’s University of Leeds, showed parts of the autonomous Danish territory’s ice sheet and glaciers have been replaced by wetlands, areas of shrub and barren rock.

For mining companies, the major ice loss has inadvertently made some of the island’s strategic minerals more accessible.

Tony Sage, CEO of Critical Metals, which is developing one of the world’s largest rare earth assets in southern Greenland, said there has been a notable upswing in investor interest in Greenland in recent months, particularly since Trump returned to office and raised the prospect of seizing control of the territory.

“I remember in his first term, in around 2018 and 2019, he made a big song and dance about the strategic value of rare earths in Greenland, so even back then,” Sage told CNBC by telephone.

Alongside Critical Metals, mining and exploration company Amaroq is also working to exploit some of Greenland’s resources. Amaroq CEO Eldur Olafsson said the firm’s recent discovery of high-grade rare earths in southern Greenland “means a lot to us.”

The project, which will take several years to develop, marked the firm’s first foray into the rare earths space as it expands its interests beyond gold and other strategic minerals.

Just one week after unveiling its rare earths discovery, the company on Nov. 11 confirmed commercial levels of germanium and gallium at its west Greenland hub, a development that Olafsson said could prove to be even more strategically significant.

“The germanium, gallium piece is, in my opinion, much bigger news than people understand,” Olafsson told CNBC by video call.

Germanium and gallium are essential components to a wide range of goods, from electric vehicles to semiconductors and military applications.

China, which is the primary global producer of these metals, imposed initial export controls on germanium and gallium in 2023, before singling out the U.S. with an outright ban late last year in response to curbs imposed on its chip sector by Washington. Beijing has since suspended its ban of gallium and germanium exports to the U.S., although the metals remain subject to restrictive measures.

“That is a mineral that the U.S. and the European Union need now. The rare earths are being processed by Lynas and MP Materials. That is something that you can access, I wouldn’t say easier, but you can access it … Germanium and gallium, if you don’t have them then that is a massive problem,” Olafsson said.

“We now have a short-term solution in mining terms to mine zinc, lead, silver and germanium and gallium, while we are then developing exporting the rare earths as well.”

Olafsson said it was important for the company to generate cashflow through its portfolio of gold and other strategic metals while it seeks to deliver on its rare earths potential, noting that the rare earths market is still relatively small.

Asked whether the race for the Arctic’s resources could be compared to a gold rush, Lanteigne said: “This is where perception and reality tend to kick in.”

He added: “There has been a lot of discussion about a rush to develop mineral resources in Greenland, for example, but I can say having been there quite a few times that if you are going to set up a mine then you need to bring in literally everything.”

Even in ideal conditions, Lanteigne said logistical challenges, such as Greenland’s harsh climate and remote landscape, means it could take 15 to 20 years before companies start to turn a serious profit.

State-owned mining firm LKAB is currently racing to develop one of Europe’s largest known deposits of rare earths. The discovery of the so-called Per Geijer deposit, which was announced in 2023, sits in close proximity to the firm’s massive iron ore mine in the Arctic city of Kiruna.

Niklas Johansson, senior vice president public affairs and external relations at LKAB, said the company is currently in discussion with European lawmakers to ensure that it will be economically viable to develop its resources.

“We’ve already got the material up to the ground. That’s all been paid for by the iron ore. Still, it’s not a given that this is a business case. It looks like it is for us at the moment, but it’s not something that you’d say, ‘oh it’s a no brainer, just run for it,'” Johansson told CNBC by telephone.

“I also tell them that if it looks like this for us, who has most of the infrastructure and everything in place, how do you think it will look for others in Europe?”