Permission: the shortest gate
Despite the Arctic region's massive mineral resource potential, actual production of the promised mineral supply has failed to take off. For any potential investor or state interested in Arctic mining, the picture is clear: uncertainty and risk pervade every stage of project development. This points to the rise of a new geoeconomic order for Arctic stakeholders like Greenland, which currently ranks eighth in the world for deposits of rare earth elements (REE), a range of 15 critical minerals necessary in various defence, industrial, and military technology applications. Given further exploration and extraction, Greenland could reach second place globally (after China) through projects like the Kvanefjeld mine in southern Greenland.
The Kvanefjeld site, owned and operated by Energy Transition Minerals, contains concentrated amounts of rare earths and uranium, the primary fuel source for nuclear reactors. One would think that the Greenlandic government, seeing an opportunity to exploit a major supply deposit of some of the world’s most critical resources and thus secure major geoeconomic power for itself, would immediately greenlight the project. Yet in June 2026, island authorities refused to extend Kvanefjeld’s exploitation license, citing the 2021 Uranium Act’s prohibition on any extraction of rare earth minerals with over 100 parts per million of uranium content.
Environmental concerns about the radiological impact of rare earth extraction provide a possible explanation for Kvanefjeld’s permission block. Another possible explanation: the company's ownership. Energy Transition Minerals’ second-largest shareholder is the Chinese company Shenghe Resources, which owns a 6.5 percent stake in the firm with the intent of acquiring the Kvanefjeld mine’s entire REE output (based on a 2018 memorandum).
Kvanefjeld demonstrates both the importance and volatility of government approval for Arctic infrastructure investors; Greenland’s Uranium Act reinstated a 1950s-era ban on uranium mining which was previously lifted in 2013, reflecting the island government’s sensitivity to geoeconomic and geopolitical dynamics. Regardless of the Greenlandic government’s motivation in blocking the mine, permission (sought by firms and investors, granted by states) was a critical gate that prevented Kvanefjeld from operating – even with the necessary financing in place.
Capital: the deepest gate
Tanbreez, another rare earth mining project in southern Greenland, first received its exploitation licence in 2020, but to date has seen no commercial production due to a lack of capital to develop the necessary infrastructure. Tanbreez, which aims to produce around 85,000 metric tonnes of rare earths, has year-round access to a deep-water fjord (REE mines rely on water to separate elements from raw mineral ore, transport slurries via pipelines, cool heavy machinery, and suppress hazardous dust). It also received a $120m letter of interest from the Export-Import Bank of the US under a programme created to compete with Chinese financing. Yet despite Tanbreez’ formidable capital backing, it still lacks the $290m required to reach commercial production. Moreover, some reports have indicated that US officials
pressured Tanbreez’s CEO to sell critical minerals to American buyers at lower prices than those offered by their Chinese competitors, indicating an interplay between market forces and geoeconomic dynamics
Tanbreez, which received the Greenlandic government’s approval years ago but has since failed to deliver any returns for its investors, points to the existence of a second permission gate for Arctic infrastructure investment and trade: capital.
Geopolitical alignment: the shakiest gate
The Northern Sea Route (NSR), which cuts across the Arctic Circle and passes through Russia’s exclusive economic zone, is the shortest trade route between Europe and Asia. Yet it is precisely this commercial advantage that makes the NSR, and by extension the wider Arctic region, a critical physical chokepoint of similar importance to the Strait of Hormuz.
In 2021, Russia expanded its territorial waters and EEZ, and in 2022 unilaterally tightened control over the NSR through two decrees imposing new navigation rules and regulating the passage of foreign warships. More recently in 2024, Russia and China established a cooperation subcommittee to jointly oversee the NSR. Separately, Russia’s state atomic energy corporation (ROSATOM) and the Chinese shipping company NewNew signed a joint navigation agreement on the NSR — a degree of cooperation unusual in Russia's external relations.
Given Russia’s preeminence as the dominant commercial and economic power in the Arctic, potential investors and neighboring states must pass through a new and necessary gate of geopolitical alignment for regional investors. Geopolitical conditions, including a stakeholders’ alignment with the Russian government’s interests, must now be considered when embarking on major infrastructure projects in the region. China’s efforts to become a major player in the Arctic region indicate that a similar gate of geopolitical alignment for the Chinese government’s interests is also taking shape.
However, while Russia’s stance restricts access to the Arctic, China favours freedom of navigation for all commercial ships seeking transit through the NSR (despite its own territorial aggression in the South China Sea) — a position reflected in its 2018 Arctic Policy White Paper. These contradictory positions mean a tricky balancing act for any geopolitically sensitive investments in the Arctic going forward. Geoeconomic practitioners should therefore take care not to end up trying to unlock two different doors with only one key.
The three-gate problem
For any stakeholder with an interest in Arctic infrastructure and shipping, any kind of stability is in scarce supply. Under unstable geoeconomic conditions, the Arctic’s status as an unproven source of critical minerals and an underutilized alternative shipping route means it is even more important for investors and multinationals to secure all three gates of the Far North’s trinity – permission, capital, and geopolitical alignment with Arctic powers – to expect any kind of return in an increasingly risky environment.
