Canada has given C$7 million, or roughly $4.93 million, in grants to a molybdenum mining project in Greenland, Greenland Resources said on Monday. The Toronto-based company is developing the open-pit Malmbjerg mine in east Greenland. Greenland Resources said the funding makes Canada the first G7 government to invest in mining on the island.
The Canadian government delivered the non-repayable contribution through Natural Resources Canada’s Critical Minerals Research, Development and Demonstration programme, according to the company’s statement. Molybdenum is a silvery-white metal used to strengthen steel and improve its resistance to heat and corrosion, making it a critical input for defence equipment, aerospace components and clean energy infrastructure. The European Union and the United States have both classified molybdenum as a critical mineral.
The Malmbjerg deposit also contains magnesium and rare earth elements, and the new funding will support a feasibility study into recovering those materials alongside molybdenum, according to ArcticToday. China currently produces 89% of the world’s magnesium and 69% of its rare earth elements, a level of concentration that has driven Western governments to seek alternative supply sources. Primary molybdenum production is similarly concentrated, with China accounting for 87% of global output and the United States another 13%, according to Greenland Resources.
The grant was announced by Energy and Natural Resources Minister Tim Hodgson at the Prospectors & Developers Association of Canada conference in Toronto in March, as part of a $3.6 billion push to build critical mineral supply chains with allies. “Canada has the minerals the world wants, and we are acting with speed, scale and purpose to get them from deposit to market,” Hodgson said, according to ArcticToday. He added that the funding goes beyond simple extraction. “We are not just extracting rocks — we are purposefully building and onshoring full, domestic value chains that create good jobs, strengthen our economic and national security, and support rural, remote and northern communities,” Hodgson said.
Greenland Resources president Ruben Shiffman said geopolitical attention on Greenland has accelerated interest in the project. “Everything is getting sped up,” Shiffman told The Globe and Mail, describing reaction to the island’s elevated international profile. “Everybody is trying to take a piece,” he said.
The Malmbjerg project has a binding 10-year, $2 billion offtake agreement with Finnish stainless-steel producer Outokumpu and a separate binding agreement with Swedish steelmaker SSAB, according to the company. Greenland’s government granted the project a 30-year mining permit last year. Construction will be led by Nuna Group, described by the company as Canada’s largest Inuit-owned heavy civil contractor, with an emphasis on local hiring, according to ArcticToday.
Regional and global impact
Greenland Resources has said the Malmbjerg mine could eventually supply approximately one-quarter of Europe’s molybdenum needs, producing 32.8 million pounds annually once fully operational, according to The Globe and Mail. The European Union has designated Malmbjerg a priority project under its RESourceEU programme, which aims to cut the bloc’s dependence on Chinese mineral imports. The company has separately said the project has the potential to meet all combined EU and Canadian defence-sector demand for molybdenum.
The investment comes as US President Donald Trump has pressed claims on Greenland’s sovereignty, including stated ambitions to annex the island, according to The Globe and Mail. Canada’s funding was announced alongside the establishment of a new Canadian consulate in Greenland, signaling Ottawa’s interest in deepening ties with the territory independent of Washington. Greenland Resources has projected the project could boost Greenland’s gross domestic product by more than 25%, according to ArcticToday.
Background
Greenland is a semi-autonomous territory of Denmark with extensive untapped mineral deposits, and it has drawn rising international attention over the past two years amid Trump’s repeated suggestions that the United States should control the island. Molybdenum has few natural substitutes and is used in applications including tank armament and other defence equipment, according to The Logic. The Malmbjerg project is one of 22 critical-minerals initiatives that received a combined $165.2 million in Canadian federal support in March, alongside an additional $434 million in private capital, according to ArcticToday. Canada launched a G7 critical minerals alliance last year aimed at coordinating allied investment in mineral supply chains outside China.
What happens next
Greenland Resources will use the new funding to complete a feasibility study assessing whether magnesium and rare earth elements can be commercially recovered from the Malmbjerg ore body alongside molybdenum. The company’s capital cost estimate for the full project stands at approximately $1 billion, and it has not yet announced a construction start date. Canada’s Natural Resources Department has also launched a Mine Permit Navigator tool intended to streamline federal mining approvals within two years, a process that could affect the pace of related domestic projects, according to ArcticToday.
