Wide Range of Valuations... "Could Cost Several Trillion Dollars"
Value Depends on Profitability of Rare Earth Deposits
As President Donald Trump of the United States 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 may 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. There are even concerns that the Trump administration might resort to force to seize it.
Wide Range of Valuations for Greenland... "Value Exceeds 6.4 Trillion Dollars Due to Rare Earths and More"
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 resources, 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 1,474 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, "Just the value of core minerals and energy resources such as rare earths is found to be over 4.4 trillion dollars (about 6,419 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 1,458 trillion won)," adding, "Considering issues related to resource development and future expenditures the U.S. government would have to make, some analyses suggest the economic feasibility is not as high as it appears."
The Trump administration has not yet presented a specific desired purchase price. CNN reported, "Discussions regarding the purchase of Greenland are actively underway within the Trump administration," and added, "It appears that they will review the price the United States offered to the Danish government in 1946 as a reference point." The price offered by the U.S. government in 1946 was 100 million dollars, which is equivalent to 1.7 billion dollars (about 2.48 trillion won) in today’s terms.
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 that Greenland is not for sale. As President Trump raises the possibility of using military force if purchase negotiations fail, concerns are growing that this could lead to an 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 does not happen the easy way, I will do it the hard way." He emphasized, "If we do not act, Russia or China will take Greenland. We will not have Russia or China as our neighbors."
As analysts suggest that the "hard way" mentioned by President Trump implies the use of military force, the Danish government is strongly objecting. The Danish Ministry of Defense, through a statement to local media outlet Berlingske, said, "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." This means that if the United States tries to forcibly annex Greenland through military means, Denmark is prepared to respond with combat. Danish Prime Minister Mette Frederiksen also stated in an interview with Denmark’s TV2, "If the United States attacks another NATO member country, all security provided since World War II will come to a halt, and NATO will come to an end."
There are also concerns that an armed conflict between the United States and Denmark over Greenland could lead to the temporary collapse of the North Atlantic Treaty Organization (NATO) system. The Guardian noted, "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 other NATO allies, military conflict could erupt between the United States and Europe." The article added, "Mediation efforts within the U.S. political sphere and by other European countries are crucial in this situation."
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