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International relations

Battle for Greenland: US and China race to grow Arctic footprint

Global warming brings new opportunities in resources and military strategy

The town of Tasiilaq, Greenland: the world's largest island is drawing more attention from both the U.S. and China.   © Reuters

NUUK, Greenland -- Call it an Arctic Game of Thrones. The U.S. and China are turning their focus to Greenland's rich mineral deposits and strategic location as melting ice caps open up the Arctic to new business possibilities.

Xploration Services Greenland, which helps mining companies set up shop on the island 85% covered with ice, has received many inquiries about possible partnerships over the past few years from players in Canada, Australia, Europe and China.

"The ice is melting as temperature rises. It makes it easier to mine here," said Xploration CEO Bent Olsvig Jensen, adding that exploration and transportation have become less difficult.

The world's largest island has been in the spotlight since U.S. President Donald Trump said he wanted to buy the autonomous territory from Denmark. The island itself has been keen to bring in foreign investment, believing that economic growth is the quickest path to grasping independence from Denmark.

But its sheer geopolitical location -- a stone's throw away from North America and Russia -- makes any changes to the status quo a sensitive topic.

China in particular is aggressively pursuing Greenland's essentially untapped resources. Shenghe Resources Holding and China National Nuclear Co. set up a joint venture in January to process and trade rare-earth metals from Greenland.

Rare earths are a vital component of many digital equipment. Greenland is believed to have a quarter of the world's reserves of these materials, and securing mining interests there would give China a leg up in the battle for technological domination.

The U.S. is also turning its focus on Greenland even though Danish Prime Minister Mette Frederiksen quickly dismissed Trump's purchase suggestion as "absurd."

The American ambassador to Copenhagen has been visiting the island more frequently, according to a local diplomatic expert. There is also talk of setting up a permanent consulate in Greenland.

The U.S. has deep military ties to both Denmark, a NATO ally, and to Greenland, and has operated a base on the island since the 1950s. China's growing clout in the area is both an economic and security concern.

Maritime activity has also picked up in nearby waters. Local reports indicate more Russian submarines sailing in the Arctic Sea, while both Russia and China are interested in new shipping lanes made possible by the melting ice.

The Greenland government aims to eventually become fully independent from Denmark, and roughly 70% of its population of about 56,000 supports the plan. Chinese investment could help the island achieve economic independence, and Greenland is considering setting up its fifth diplomatic outpost abroad in China.

"The security tension among big powers is affecting Greenland, which seeks the economic growth for independence in the future," said University of Greenland professor Rasmus Leander Nielsen.

"We welcome investment from all over the world," Greenland Foreign Minister Ane Lone Bagger told Nikkei in an interview, urging players against escalating tensions in the Arctic.

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