Amid China rare earths sabre-rattling, U.S. races to forge 'friendly' minerals alliance with Canada

By Andy Home

LONDON, Oct 7 (Reuters) - President Donald Trump’s offer to buy Greenland didn’t go down well with either the inhabitants of the world’s largest island or with Denmark, which administers it as an autonomous territory.

The Danish prime minister Mette Frederiksen described the idea as “absurd”, triggering a diplomatic fall-out as Trump decided to cancel a planned visit to Denmark.

The idea may be many things but, from a U.S. perspective, it is not “absurd”. There are two completely rational drivers for eyeing up Greenland - its strategic location for North Atlantic shipping and its untapped mineral reserves.

“They’ve got a lot of valuable minerals”, was White House economic adviser Larry Kudlow’s explanation of Trump’s latest real estate ambitions.

As it stands, the United States will have to content itself with a more mundane memorandum of understanding, signed in June, to jointly fund and operate an aerial survey of Greenland’s Gardar province.

Gardar “has great potential for new discoveries of a range of mineral commodities, including rare earth elements,” according to the U.S. Department of State.

And that’s really the point. Greenland has flashed onto the presidential radar because the United States is rushing to build out new critical minerals supply chains to break its dependency on China.

CHINESE DEPENDENCY

The Pentagon has been worrying for years about the United States’ growing dependence on China and what it terms other “unreliable” countries for a broad spectrum of minerals.

Such concerns were thrown into sharp relief in May, when Chinese president Xi Jinping used a visit to a rare earths magnet plant to send a thinly veiled warning about the potential costs to the United States of escalating trade tensions.

Those costs are potentially very high indeed since the United States and the rest of the world are almost 100% reliant on China’s rare earths production and exports.

Click here to continue reading...

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

Part of the Stock Digest family of websites

Small Cap Stock Digest

MARKET SUMMARY

INDICES

Name Last Change
DOW 28004.90 0.80%
S&P 500 3120.45 0.76%
NASDAQ 8540.83 0.72%
TSX 17028.47 0.33%
TSX-V 528.54 0.00%

Resource Commodities

Name Last Change
Gold 1464.37 0.31%
Silver 16.89 0.53%
Copper 2.64 2.635
Platinum 901.00 0.67%
Oil 57.72 1.65%
Natural Gas 2.69 1.53%
Uranium 25.03 0.32%

@RSDigest ON TWITTER