Greenland interests Trump because of its resources. What you need to know about the island's economy

Greenland's economy relies heavily on Danish subsidies and fishing. At the same time, the island has large reserves of minerals. However, their development is hindered by the climate, environmental prohibitions and the high cost of extraction. Greenland's main value is related to its future resource and strategic potential. If the United States agrees to purchase Greenland, it will cost $700 billion. What you need to know about the island as an economic asset is in the Izvestia article.

The state of Greenland's economy

• According to data for 2024, Greenland's gross domestic product (GDP) is estimated at $3.3 billion. This is almost 20 times less than the GDP of American Alaska, and is roughly comparable to the three Arctic territories of Canada. It is noteworthy that Greenland is inferior in GDP to another dependent Danish territory, the Faroe Islands, which are 1,552 times smaller in area. In comparison with other countries, Greenland has a nominal GDP comparable to Bhutan and the Central African Republic.

• At the same time, since Greenland's population is quite small and amounts to only about 56.8 thousand people (600 more than in the same Faroe Islands), the island has a fairly high GDP per capita — $58.5 thousand. According to this indicator, it is located between Germany and the United Kingdom, but is inferior to the neighboring Arctic regions of the United States and Canada. At the same time, high GDP per capita does not provide the population with a high standard of living comparable to continental Europe. Greenland is heavily dependent on subsidies from Denmark, which reach €9,000 per person.

• In total, Denmark covers about half of Greenland's government spending. About 43% of employment is also provided by the public sector, which is one of the highest rates in the world and significantly below the level of the United States and Europe. In addition, Denmark subsidizes the work of some large employers in transport, trade and agriculture.

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• Following the public sector, fishing is the main sector of Greenland's economy. It provides 90% of the region's total exports, mainly to the United States, Europe and Japan. Greenlandic fishermen specialize in catching shrimp, cod, halibut and salmon. Royal Greenland is the world's largest seller of cold water shrimp. Greenlanders also engage in traditional whaling and seal hunting, being among the world leaders in these industries, but they are heavily dependent on government subsidies.

• Greenland's economy has a number of extremely weak points. There is practically no vegetable farming on the island, which is why many food products need to be imported. 80% of the region's territory is covered with ice, making economic development almost impossible. Almost a third of the population is concentrated in the capital Nuuk, while the rest is scattered in remote settlements with difficult access. Greenland has about 160 km of paved roads.

Greenland's minerals

• Although Greenland is an underdeveloped and subsidized region of Denmark, its natural wealth gives it great potential. The Geological Survey of Denmark and Greenland (GEUS) estimates the island's reserves of rare earths at 36.1 million tons. However, most of these reserves are unavailable or unprofitable to develop. According to the US Geological Survey, Greenland has 1.5 million tons of developed reserves of rare earth minerals, or about 1.6% of the world's reserves. The island is in eighth place in the world, right behind the United States, whose reserves are estimated at 1.9 million tons.

• Of the 34 critical raw materials identified by the European Union, 24 have been discovered in Greenland, some of which have significant global volumes. The bowels of Greenland are especially rich in lithium, fluorine, tantalum, niobium, hafnium, zirconium, phosphorus, molybdenum, strontium, platinoids, vanadium and titanium. There are deposits of feldspar, graphite, gold, nickel, and copper, and there are signs of significant deposits of tungsten, tin, antimony, cobalt, gallium, and germanium.

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• At the same time, there is almost no mining. As of January 2026, only two fields are being developed. One of them, Nalunak, is located in the very south of Greenland. The Canadian company Amaroq is mining gold there, intending to extract 320 thousand ounces. The European-Canadian joint venture Lumina is also developing the central-western anthortosite deposit.

In addition to minerals, Greenland has oil and gas reserves located both on the island itself and on its shelf. In the past, a very impressive estimate of reserves of 110 billion barrels of oil was given, but recent refinements have already given reserves of 17.5 billion barrels of oil, of which 4 billion barrels are easily recoverable. Currently, there is no hydrocarbon production in Greenland.

• Assumptions about the value of the island's natural resources vary greatly. The largest estimate was given by the American Action Forum (AAF), naming the amount at $4.4 trillion, of which $1.7 trillion is for oil and gas and $1.5 trillion for rare earths. However, taking into account all the constraining factors, such as the undeveloped territory and harsh climatic conditions, the real profit from mining may amount to only $186 billion. The New York Times newspaper believes that it is possible to earn only from $12.5 billion to $70 billion in Greenland.

Greenland's prospects

One of the most difficult problems of Greenland is ecology. Any mining leads to pollution of the environment, which is home to the indigenous population, often leading a traditional lifestyle. Back in the 1970s, they tried to mine lead and zinc on the island, but the damage to nature was too great, which is why the mines had to be closed. There has been a ban on uranium mining in Greenland since 2021.

• Despite the availability of minerals, it is currently difficult to talk about the island's full economic independence, since Greenland is heavily dependent on external support and is not able to provide for itself. Its exports today are based on fish and shrimp, which account for about 90% of external supplies.

• Annual subsidies from Denmark amount to hundreds of millions of dollars and form a significant part of the island's GDP, which underlines its financial dependence. Theoretically, the development of uranium and rare earth metals could increase revenues, but such projects pose risks to the environment, so they are deliberately abandoned, and the extracted raw materials would still have to be sent for processing abroad, in particular to China.

• Greenland's main value lies in its location, as the island occupies a unique geographical position between North America and Europe and actually forms the anchor point of the entire northern space. Greenland is located near key Arctic sea and air routes, which makes it an important element of vessel movement control, aviation and strategic infrastructure.

• Additional interest in Greenland is associated with its access to the Arctic shelf, potentially rich in hydrocarbons and other resources. However, the development of these reserves in the Arctic requires huge costs and high technologies, which makes extraction unprofitable today.

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• According to media reports, the United States is ready to pay about $700 billion for Greenland if they can come to an agreement. So far, no one except Washington has expressed a desire to buy the island.

• Climate change and partial liberation of territories from ice may also play a role over time, but so far this factor has not had a decisive impact. In general, Greenland is a region with serious economic potential for the future, which can be realized if political decisions and approaches to ecology change.

When writing the material, Izvestia interviewed:

• Alexander Duchak, a leading researcher at the Institute of CIS Countries, a political scientist;

• Vasily Koltashov, an economist and director of the Institute of the New Society.