Donald Trump Buying Greenland: If This Comes to Fruition, Here’s One Company to Watch

Donald Trump Buying Greenland. This is a prospect that was raised during his first presidency, but has just been raised again. And this was not just a fanciful idea, but he declared ‘we need’ it for the ‘economic security’ of the United States – refusing to rule out using military force to obtain it. And this could have big ramifications for Energy Transition Minerals (ASX:ETM). Or could it?

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Donald Trump Buying Greenland…its a prospect that has been raised

Donald Trump throws a lot of far-fetched ideas out there. But this is not the first time he has used it. Moreover, his son Donald Jr visited Greenland at the same time. For those who do not know, it is an island that is formally part of Denmark. It was named Greenland (translated from Norwegian) after Erik the Red who named it there in hope settlers would be attracted. Because there isn’t a lot of green around.

Although Greenland is part of Denmark, it has a degree of self-governance own PM and government. In recent weeks, PM Mute Egede has formally called for independence from Denmark. He has dismissed Trump’s calls for the US to buy out his country. The US has recognised Denmark’s claim to Greenland since 1916 even though Denmark did not control the whole island at that time.

Greenland has had a tormented history with Denmark. Even though it has had more and more autonomy over time, scars of the past remain including scandal in the 1960s and 70s where Greenlandic women were subjected to coerced sterilisation.

But Denmark does not appear keen to give it ‘independence’ as the PM envisions. Curiously, at the start of lat year Denmark’s King Christian X updated the Royal Coat of Arms to include Greenland (represented by a polar bear) and the Faroe Islands. These replaced symbols of Norway and Sweden which were once in a union with Denmark (from 1397 to 1523 in case you were wondering).

Greenland would be important to the US

Greenland would be strategically important. It is home to rare earths and could be a hub for US military bases – it has been in the past, particularly during World War II. You cannot blame Trump for wanting to buy it. His move irritated some, but excited investors in a company called Energy Transition Minerals (ASX:ETM), formerly Greenland Minerals. It is one of the few companies with a rare earths project in Greenland.

ETM has had a license in Iceland, in an area called Kvanefjeld that is 35km away from the city of Narsarsuaq that has an international airport nearly 5 hours flight from Copenhagen. ETM was first granted a license in 2007, but it has been a long period to get to where it is now, but it is still not in production. Delaying the company had been loggerheads with the government over its exploration license. Obviously there’s little it can do until it has a license.

This is not to say it has not tried. One of its more recent move is to change its local leadership, appointing an external strategic advisor to the board. But could you imagine if the USA bought Greenland? We’d imagine that it’d be quick to have its legal dramas resolved.

The irony

Even before rumours broke out at the start of last year, ETM was looking to diversify and continued. It bought the Penouta Mine in Galicia, Spain. This is the only recent tin-tantalum-niobium mining and processing operation in the European Union. Its prior owner went insolvent and there was a court-led auction. The purchase price was A$9.2m and ETM raised $10m to fund it.

Penouta gives ETM a nearer-term production asset with processing infrastructure already in place — unlike Kvanefjeld in Greenland, which remains under development and regulatory scrutiny. It exposes the company to EU critical mineral supply chain priorities, especially as Europe aims to reduce reliance on imports for key metals like tin, tantalum and niobium.

When you remember what happened with fellow niobium play St George (ASX:SGQ) – perhaps this is why investors have given this stock a closer look.

Conclusion

We think it is still fair to describe this prospect as a far-fetched scenario. But the fact ETM shares have rallied significant in recent months at least some investors think Trump buying this Danish territory is the best hope of entering production. As goes without saying, this is not the best situation to be in when this is your best hope of getting a mine into production.

All this being said, it is risky to hinge hopes on America’s president annexing your territory as the only way of entering production. That is why the company has diversified.