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With the upcoming President of the United States, Donald Trump, offering to buy Greenland, we examine Russia’s trade with the territory. Being an autonomous territory of Denmark, Greenland follows EU sanctions, however there is interaction with Russia.
With the melting of Greenland’s ice cover due to global warming, its abundance of mineral wealth and its strategic position between Europe, North America and the Arctic zone, Greenland is of interest to the great powers including China, Russia and the United States, with the latter having a military zone on the island, including the Pituffik Space Base. Three-quarters of Greenland is covered by the only permanent ice sheet outside Antarctica.
In terms of its natural wealth, Greenland has huge mineral reserves, with the inherent value of these improving as prices are increasing. These include iron, uranium, aluminium, nickel, platinum, tungsten, titanium, and copper. The state company Nunamineral has been launched on the Copenhagen Stock Exchange to raise more capital to increase the production of gold, started in 2007. Gem quality rubies are also mined in Greenland.
In terms of alignment with Russia’s energy interests, another state company, Nunaoil, was created to help develop the hydrocarbon industry in Greenland. However, in July 2021, Greenland banned all new oil and gas exploration in its territory, with government officials stating that the environmental “price of oil extraction is too high”.
Chinese investment has been noticeable in the rare earths sector.
With a population of about 60,000, Greenland is the least densely populated region in the world. 67% of its electricity production comes from renewable energy, mostly from hydropower.
Meanwhile, Trump’s declaration of interest in purchasing Greenland is not new. In 1867, United States Secretary of State William H. Seward worked with former senator Robert J. Walker to explore the possibility of buying Greenland and, possibly Iceland. Another attempt was made in 1946, when the United States offered to buy the territory for US$100 million, an offer that Denmark rejected.
In terms of Russian trade, Greenland exports mainly shrimp and sea food to Russia, with the annual trade worth about US$4 million. Russia exports mainly clothing items to Greenland, including felt and fur to the value of about US$250,000. Sanctions and the absence of any regular trade routes have kept volumes low.
Nevertheless, over time the situation could change. Russia is a global leader in Arctic technologies, including transport and logistics, and possesses the only nuclear-powered ice breaker fleet in the world. If Greenland’s resources – the territory relies on Danish funding for 50% of its annual budget – were ever to be exploited, as Trump apparently wishes to do – Russian arctic logistics experience would be well positioned to assist.
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