As the demand for rare earth metals continues to rise globally, exploration efforts have intensified in Greenland, a country with a vast supply and an ideal climate to mine these commodities.
Greenland contains some of the largest deposits of rare earth elements (REE) on Earth, such as yttrium, scandium, neodymium and dysprosium.
These REEs have unique properties that make them ideal for several industrial applications due to their ability to withstand extreme temperatures or chemical agents. While most REE mines exist outside of North America, Greenland offers an attractive alternative, given its natural resources and lack of population density.
Recently, foreign companies have begun investing heavily in Greenland's mining infrastructure by constructing refineries near existing REE sites. The country also recently announced plans to create a 'green energy corridor' across its northern regions. This will be powered by renewable energy sources like hydroelectricity, which is generated from glaciers melting into rivers along the coastlines.
The Innovation Platform takes a look at how countries can capitalise on these supplies and create a steady rare earth supply chain while ensuring environmental protection and safeguarding.
The global demand for rare earth metals
The global demand for rare earth metals has increased rapidly, with the estimated global market value exceeding $10bn in 2020. In recent years, the world has sought ways to increase its access to these materials that are essential for modern technology.
In light of this rising demand, there is an opportunity for Greenland's geographical advantage. Resources located within its borders can be leveraged into a competitive edge when competing on the international stage.
Investing in infrastructure capabilities, such as refining facilities and transportation networks, will enable local producers to access larger markets outside Greenland. Moreover, businesses could capitalise on current trends towards producing goods closer to home or sourcing them locally rather than relying heavily on imports from abroad.
Following the announcement, Critical Metals soared as much as 16% to $13.73 in New York, its highest in over two months. Intensified threats by the US to take over Greenland also lifted the stock in recent days. As of morning trading, its market capitalization stood at around $1.5 billion.
Large rare earth project
Critical Metals views the new facility as a "major step forward" for its flagship Tanbreez project. The site is host to one of the biggest rare earth deposits on Earth, containing at least 45 million tonnes in resources within a massive kakortokite unit that has largely been underexplored to date.
Earlier this year, the company released a preliminary economic assessment for the project based on the estimated resource, showing a net present value (NPV) of approximately $3 billion (approximately $2.8 billion to $3.6 billion at discount rates of 15% and 12.5%, respectively, before tax), with an internal rate of return (IRR) of 180%.
The report outlines a phased growth strategy for the Tanbreez project, with initial production of around 85,000 tonnes of rare earth oxides per annum, beginning as early as next year, then scaled to 425,000 tonnes after modular expansion.
