Greenland gambit takes nearshoring to absurd ends

Neo Performance Materials

13/01/2025 17:44

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Gabriel Rubin
       WASHINGTON, Jan 13 (Reuters Breakingviews) - Mineral
riches in icy Greenland have become the world’s hottest
commodities. Channeling Prussian statesman Otto von Bismarck,
who sought expansion when national borders “are not favorable
for a healthy, vital state,” U.S. President-elect Donald Trump
has threatened to acquire Denmark’s self-governing territory
using money or force, taking the concept of nearshoring to a
ludicrous extreme. Such aggression endangers supply chains
painstakingly established for rare-earth elements and weakens
Western nations in their escalating battle with China.
    Seventeen metals, including cerium and yttrium, are used to
make smartphones, fuel cells and electric vehicles. Geology has
given China a longstanding edge. Deng Xiaoping, who led the
country for some two decades, in 1987 compared the situation to
Middle Eastern oil. The People’s Republic holds about a third of
all known reserves. More importantly, it processes 90% of global
output.
    China is increasingly weaponizing the advantage. In 2023, it
banned the export of technology used to extract and refine rare
earths, and then followed that up last year by imposing strict
rules for exported minerals used in Western supply chains. In
December, China responded to new U.S. restrictions with a
blanket ban on overseas sales of gallium, germanium and antimony
on the grounds they have dual military and civilian uses.
    The United States and its allies have chipped away at
China’s advantage, however. Since 2020, the U.S. government
increased funding and other support for the Mountain Pass mine
in California, where the only U.S.-based rare-earth processing
facility is located. The European Union signed new cooperation
deals with Greenland in 2023 and the Commission opened an office
in the capital, Nuuk. Denmark and others have pressured
Greenlandic miners to reject Chinese investment, Reuters has
reported, while Canadian miner Neo Performance Materials
 NEO.TO  set up shop in the land of the midnight sun to reduce
its dependence on Russia. Wall Street brokerage firm Cantor
Fitzgerald, whose outgoing CEO Howard Lutnick is Trump’s nominee
to run the Commerce Department, holds a major stake in a mining
company there.
    Autarkic expansion would undermine cooperative progress by
turning allies into adversaries and weakening supply-chain
resilience. Coordinating industrial capacity across borders is
less attention-grabbing than promising a new age of empire and
snatching resources as commander-in-chief of the U.S. military.
No one will be counting on Trump for diplomatic nuance or
long-term strategic thinking, but if the goal is to reduce
China’s clout in advanced technology, there’s a better way to go
about it.
    Follow @Rubinations on X
    
    CONTEXT NEWS
    Donald Trump, who is scheduled to be sworn in as U.S.
president again on Jan. 20, said on Jan. 7 that the United
States needs Greenland for national security purposes. He has
not ruled out the use of force to annex the world’s largest
island and warned that Denmark could face hefty tariffs if it
does not cede control of the self-governing territory.
    Danish Foreign Minister Lars Lokke Rasmussen said his
country was open to discussing further cooperation with the
United States.

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China dominates supply and processing of rare earth metals    https://reut.rs/40rAM2Z
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 (Editing by Jeffrey Goldfarb and Pranav Kiran)
 ((For previous columns by the author, Reuters customers can
click on  RUBIN/ 
gabriel.rubin@thomsonreuters.com))