"17 Trillion? 6.4 Trillion? How Much Is Enough?"... Greenland at the Center of Valuation Debate

Wide Range of Valuations... "Could Cost Several Trillion Dollars"
Value Depends on Profitability of Rare Earth Deposits

Glacier scenery along the coast of Nuuk, Greenland. Photo by Reuters Yonhap News

As President Donald Trump of the United States has strongly expressed his intention to purchase Greenland, debates over the valuation of Greenland have erupted both within and outside the United States. Analysts suggest that Greenland’s value could reach several trillion dollars, not only because it is a key geopolitical location but also due to its recent recognition as a repository of rare earth resources. However, the Danish government and European countries are firmly opposed, insisting that Greenland is not for sale. This has led to concerns that the Trump administration might attempt to seize the territory by force.

Wide Range of Valuations for Greenland... "Value Exceeds 6.4 Trillion Dollars Due to Rare Earth Elements"

Last September, the Danish Navy training with military personnel from NATO member countries along the coast of Greenland. Photo by AP Yonhap News

Recently, the valuation of Greenland has become a hot topic in the United States. In particular, as it has become known that Greenland holds vast reserves of rare earth elements, some claim that the purchase price could reach several trillion US dollars.

On January 14 (local time), NBC News in the United States reported, "After surveying American scholars and former officials to estimate a tentative purchase price for Greenland, the results ranged from 500 billion to 700 billion dollars (approximately 73.7 trillion to 103.1 trillion won). If this is set as the lower bound, the figure could exceed 1 trillion dollars (about 147.4 trillion won)."

Some argue that the value could be much higher, exceeding 4 trillion dollars. Douglas Holtz-Eakin, president of the American Action Forum (AAF), a U.S. center-right think tank, told CNBC on January 11 (local time), "Considering Greenland's natural resource reserves and real estate value, several trillion dollars would be appropriate." He added, "Even just the value of key minerals and energy resources such as rare earth elements is estimated to exceed 4.4 trillion dollars (about 641.9 trillion won)."

However, there are also strong counterarguments that the valuation should be lower because the rare earth and other resources in Greenland are not immediately extractable and would require massive development costs. The Wall Street Journal (WSJ), citing experts, reported, "Economists' estimates of Greenland's value vary widely, from at least 12 billion dollars (about 1.75 trillion won) to 1 trillion dollars (about 145.8 trillion won)." The report added, "Some analyses suggest that, considering the challenges of resource development and the future expenditures the U.S. government would need to invest, the economic feasibility may not be as high as expected."

The Trump administration has not yet presented a specific desired purchase price. CNN reported, "Discussions on the purchase of Greenland are in full swing within the Trump administration," and added, "It appears that the price offered by the United States to the Danish government in 1946 will be used as a reference point." The price proposed by the U.S. government in 1946 was 100 million dollars, which is equivalent to about 1.7 billion dollars (approximately 2.48 trillion won) in today's value.

Denmark and Europe Emphasize Greenland Is Not for Sale... Will Trump Resort to Force?

Statue of Hans Egede, an 18th-century Danish missionary and Greenland pioneer, erected in Nuuk, Greenland. Photo by Reuters Yonhap News

Denmark and European countries maintain the position that Greenland is not for sale. As President Trump has raised the possibility of using military force if purchase negotiations fail, there are growing concerns about a potential armed conflict.

At a press conference held at the White House on January 9, President Trump said regarding the purchase of Greenland, "I want to reach an agreement, and that is the easy way. But if it cannot be done the easy way, I will do it the hard way." He emphasized, "If we do not act, Russia or China will take Greenland. We do not want Russia or China as our neighbors."

As President Trump's reference to the "hard way" is being interpreted as an allusion to the use of military force, the Danish government has strongly objected. The Danish Ministry of Defense, in a statement released to the local media outlet Berlingske, declared, "If Greenland is attacked militarily, the military will immediately retaliate against the invading forces according to the rules of engagement, without waiting for separate orders from higher authorities." In other words, Denmark is prepared to fight back if the United States attempts to forcibly annex Greenland through military means. Danish Prime Minister Mette Frederiksen also responded in an interview with Danish broadcaster TV2, stating, "If the United States attacks another NATO member, all security provided since World War II will come to a halt, and NATO will come to an end."

There are also concerns that if an armed clash over Greenland occurs between the United States and Denmark, the North Atlantic Treaty Organization (NATO) system could temporarily collapse. The Guardian pointed out, "In the worst-case scenario, if the United States launches a military operation in Greenland and Denmark invokes Article 5 of NATO's collective defense clause to request military support from the other NATO allies, a military conflict could break out between the United States and Europe." The article added, "Efforts at mediation by U.S. political circles and other European countries are crucial in this situation."