241. Greenland’s magnetic attraction: why Trump wants it all for himself

0:00So why does Trump want to own Greenland? it's about natural resources, national security and magnets, Robert. Yeah, that's right. I've had to go back to my old science books to understand the vital role that magnets play in the global economy and, you know, why Trump is therefore doing what he's doing. Yeah, this is all coming up on today's episode of The Rest is Money.

0:31Hello and welcome to The Rest is Money with me, Robert Pester. And me, Steph McGovern. Welcome back. This is us back together for the first time since before Christmas. You'll have probably been listening to our episodes over the last few weeks, covering all sorts of different things on skills, on regional inequality, looking at where we think next year is going to take us, what happened in 2025. What we weren't expecting though over that time, Robert, was Venezuela to have their leader essentially abducted by Trump and now Greenland to be on Trump's cards for him wanting to take that country over too.

1:14I mean, I know you're in the middle of writing your thriller at the minute, aren't you, Robert? And I'm writing my second one too. You couldn't, literally, you couldn't make this stuff up. No. And then, you know, when you watch the every minute of that extraordinary press conference, when Trump with, you know, his top military person, General Dan Raisin Cain, sort of described the process of abducting, kidnapping. Many would describe it as a kidnap, including actually Trump. He didn't deny it was a kidnap. Maduro, the president of Venezuela. And it's not just a practice. They talk about it as though they're kids playing a computer game.

2:01The whole risk approach has changed. This is pretty terrifying stuff. But the bit of this that I slightly feel we should drill into is... Rare earth minerals. That was a good pun. It's the property owning aspect for Trump of all of these overseas adventures. I mean, he is now a president who is redefining America's relationship with the rest of the world. We did have actually talk at great length about his new security policy, which prefigured all of these extraordinary adventures that his military forces are carrying out for him overseas. It's based on an older foreign policy approach called the Monroe Doctrine.

2:52He's now calling it the Dunro Doctrine. It's a new form of American exceptionalism where basically he feels he can do more or less what he likes using their enormous military might, so long as it serves the combination of America and his interest. So what we've got to drill down on today is, you know, what are those interests? and a lot of it, frankly, comes down to money, resources and economic power. You'll have heard lots of talk about the natural resources that Greenland has and Robert, I know you've got some really interesting stuff on this but let me just give everyone the basics. So, you know, Greenland has 25 raw materials from a list of over 30 that are deemed critical by the EU and what we're talking about here is, yes, the oil and gas but these rare earth minerals.

3:42So these are the metals which are used in loads of different things we use in our everyday life. They're key for modern technology. So cars, electric cars, wind turbines, military equipment, smartphones. And we're going to get into some of the detail of that. But what you'll have heard a lot about is why Greenland is particularly good at the moment is because they have loads of this. It's 80 % covered in ice, but the ice because of climate change is starting to melt. Mining is massively underdeveloped there. So there's a real opportunity to get these rare earth minerals out and essentially make loads of money from them because they're key to technology.

4:22But what I think a lot of people won't know is the specifics of it. And this is the science bit essentially from Robert here. So as I say, one of the great things about Trump is he does force me to sort of sort of essentially study all sorts of stuff I never thought I was going to have to immerse myself in. And one of them recently has been the importance of rare earths. Now, I started to become obsessed with this because of the way that China's astonishing economic power is based on the fact that in terms of exploitable, these incredibly important minerals, in terms of these exploitable minerals, you know, it has had a near monopoly.

5:09So one of the reasons why it's very, very hard, despite the imposition of these massive tariffs on China, it's very hard for America to go into all out economic war against China is because China is capable, has tried to do this, has indeed done it, limited the supply of these unbelievably important rare earth minerals to the rest of the world and in particular to America. And the reason these minerals matter is because they are absolutely essential for all sorts of technologies that are essentially keep the world, keep the global economy ticking over. And one of the things, again, that I've had to sort of, in a sense, understand more is the central importance of magnets to every aspect, more or less, of economic life.

6:11and particularly small, super powerful magnets because they're in our electric vehicles, they're in our wind turbines, they're in our smartphones. They are absolutely essential to the guidance systems of our missiles. The US defence industry cannot function without these super powerful magnets. And the thing about China is they not only have enormous amounts of the so-called lighter rare earth minerals, they also have a total monopoly. Well, I'm going to rephrase that in a minute. But right now, in terms of producible minerals, they have a near monopoly of these heavy rare earth minerals. And the importance of the heavy ones is unless you mix them with the lighter ones in these super powerful magnets, when these magnets heat up, as they always do in these applications, you know, unless you've got the heavy ingredients in your compound, they become demagnetized very fast.

7:16They don't last very long. So these heavy rare earth minerals are absolutely essential to the defense industry, to the electric vehicle industry, to the wind turbines producing energy industry, to smartphones. So, you know, the world sort of more or less grinds to a halt if they don't get, you know, if the producers of these vital, vital bits of kit don't get this stuff. And as I say, because of China's monopoly, it's one of the reasons why for an economic security point of view, there is a limit to how much Trump can take on China. What, however, he knows is there is one other place in the world which has enormous deposits.

8:02I think on some measures, the biggest deposits of these heavy rare earth minerals, and that is Greenland. But they've just not been exploited. So, you know, in a sense, I think this is a sort of under-recognized bit of why, you know, the American president is so desperate to get hold of Greenland. You know, if America were to own Greenland in the way that Trump wants, at that point, you know, China's essentially economic stranglehold over the American economy. At that point, it goes because at that point, America actually owns the stuff that is such a vital source of both the economic and political power of China.

8:48And it would be easy, fairly easy for Trump to do as well, wouldn't it? To actually take over Greenland to annex it because, you know, well, as we've seen with Venezuela, he's willing to do extreme measures, but he wouldn't even need to do that. There's hardly anyone there. It's fewer than 60 ,000 citizens. You know, they obviously don't have an army. I mean, there's some estimate. I can't remember one of Trump's officials basically said they could take it over by simply landing six helicopters there. So you're right about that. I mean, the one caveat I would say is the process of extracting and refining these minerals, particularly in the extreme weather conditions of Greenland.

9:35It's not easy. I'm not, you know, we shouldn't, you know, they can't simply just dig this stuff up and immediately you've got it. You have to invest enormous sums of money in the infrastructure to get this stuff out of the ground. Some of it is also attached to uranium, but there's also another separate source of this extraordinary. The thing about Greenland is it's got so much of this stuff and not all of it is attached to uranium. Like you say, this isn't just you rock up, put up a few drills and start getting out, drill, baby, drill. So it's way more complicated than that because of the weather, the climate, how remote it is.

10:16So there are only two mines there at the moment now, I think, in terms of, you know, stuff that's going on. And they can only do it for a certain number of months a year because of the weather conditions. So and, you know, they don't know. Yes, they know that these earth minerals are there in a sense, but they don't know what it's going to be like to build the infrastructure to be able to get them out and how far down they are and everything else. So it's not as straightforward as you alluded to earlier, playing a computer game where you just rock up and start taking the stuff out. And obviously, the other big point in all of this is what it would mean politically, geopolitically, because any U.S.

10:54military action taken, taking the island is going to result in two NATO allies in direct conflict with each other, which then throws that whole alliance into question and then force the other members to pick sides. And it's going to be carnage. And so this isn't as simple as it looks in terms of how Trump views it. I want to get on to another sort of completely mad political aspect of this in a second, but just to, you know, in a sense reinforce what you say. You know, NATO's charter, Article 5 says, you know, an attack on one member is an attack on all. So, you know, on one version of that, if Trump were to be a hostile aggressor in Greenland, at that point, Britain is at war with the US.

11:46Yes. Now, technically, as I understand it, the US as a member of NATO could veto the application of Article 5. But at that point, that's why, you know, the Fredrickson, you know, the prime minister of Denmark says, you know, at that point, NATO, you know, you can all pack up and go home because NATO is is at that point destroyed. And so, you know, the stakes here are incredibly high. But I have to say, you know, if you listen to Marco Rubio and indeed, who's the secretary of state in the Trump government, if you listen to Hegseth, the minister of war, you know, they've all just been saying recently, repeatedly, the whole point about the Venezuela, you know, abduction is it proves that what Trump says he's going to do, he does.

12:38And Trump has repeatedly said, and this has all been reinforced recently, both by him and his officials, that he will own America, will own Greenland. And we have to take that. You know, the one thing that that, you know, he very does seem to me to have in common with Putin is, you know, if you want to know what they're planning to do, you just have to listen to what they say. Right. There are all these sort of sophisticated theories. You know, they typically, you know, you have to take it seriously. Right. So the other thing that I want to talk about in this then is the interest of Greenland.

13:18And actually, it's not just come all of a sudden, this interest. But when you hear Greenland's defensive, you know, why it shouldn't be the case that Trump takes them over, obviously, for all the political reasons. But they also say they are open for business when it comes to mining, but that US investors have been slow on the uptake. But there has been stuff going on behind the scenes in terms of the kind of the tech entrepreneurs who have been looking at Greenland for a while, haven't they, Robert? it. That's right. And, you know, as you very sweetly mentioned, I have just finished the third in my trilogy of thrillers.

13:58And I'm slightly kicking myself because in looking at this whole Greenland issue, I came across one aspect of it where I just thought, oh, my goodness, I wish I'd sort of worked this up into the story. So there is this multi, multi, multi-billionaire created PayPal, now a very successful investor called Peter Thiel. He has been a great Trump supporter. He is famously one of the tech libertarians. He's a big crypto fan. And he is a proponent of this idea, which is the network state. and the network state is this idea where all these sort of libertarian billionaires, tech bros with money, all club together.

14:55They invest in a fund and then they buy a country because, you know, they take the view of fixing a country is not that easy, even a country when you've got a president who seems to share some of their values like Trump. So what their idea is, let's buy Virgin Territory and turn it into paradise for the tech bros, right? And the crypto community. So he invests in a business called Praxis and Praxis has been looking at whether it could purchase some of Greenland and turn it into this new country, as it were, where the currency would, of course, be crypto for the likes of Thiel. This is just, I mean, this is just sort of, I mean, even talking about it out loud, you know, this is, I mean, is batshit crazy an appropriate way of describing it?

15:58I don't know, but it's a real thing. It reminds me of a plot of Despicable Me, the kids' film, you know, with these evil people taking over the world. So I'm now going to ask you a question because I know you know the answer to this question. So who did Trump there for? So obviously Denmark is pivotal in all of this. Because as we pointed out, Greenland is a colony of Denmark and Denmark has been telling Trump to hop off. So who did Trump appoint as ambassador to Denmark? So Ken Howery. Now, he is the guy who co-founded PayPal with Teal and Elon Musk. So he's part of that PayPal mafia gang. And he's very close to Teal.

16:43Yeah. And so this is, you know, there's been evidence of Trump's interest in Greenland really for some time, if you look back at what all these tech billionaires are doing. So it just looks like it's just a matter of time rather than it not happening, doesn't it, given all of this? Yeah. And look, obviously, you shouldn't dismiss the national security, putting to one side the stuff we've just talked about in terms of rare earths, but also the other national security aspects of all of this. With, you know, tragically the ice melting, you know, there are new passageways for commercial and military.

17:26I never know whether we call them boats or ships. I always get told off. Ships. The ships. Which ships are? Because my instinct is always calling boats. But if you're in the Navy, apparently whenever I say boats, anyway, anyway. But the point is that there are new shipping lanes opening up because of the melting of the ice, you know, much further north. So, for example, a channel from North America to Europe, you know, will be shortened as a result of the melting of the ice. And then there's also all sorts of oil and gas up there that will become exploitable. And so there are massive security implications for whoever controls Greenland.

18:05And Trump's view is that the defence capability of Europe is not adequate to defend those channels. And that's another reason why he says he wants to own, control Greenland so that America's military might can be deployed there. Yeah. And just to counter that, so he said that there isn't enough defense capability there. He said something like they added one more dogs there. But actually they have said, they said earlier last year that they would spend 4.2 billion on two military units, a new Arctic command, HQ, ships, maritime patrol aircraft, drones, air surveillance radar units, all things that would be in Greenland.

18:50So they are already, you know, the Danes are already saying this is what we do to improve things there. They are. And they're also saying, as you know, they're also saying that America can have more bases. There are more people there. They just they would. But they would have to be lodgers rather than owners. Look, this is not going to go away. But because in a way it's quite difficult for Trump to make the argument that only America can defend on its own, you know, these new important strategic, you know, this incredibly important, strategically important channels and resources. In the end, you just have to assume the point that we're making is this is about the money.

19:34It's about the resource. It's about the fact that, you know, you know, America wants to own, you know, any mineral that is absolutely core to its economic future, which, of course, takes us back to Venezuela, doesn't it? Yeah. And it's an interesting one with Venezuela because obviously the big thing there is oil and the oil resources. But what is different with Venezuela is obviously there has been for some time the Venezuelan president. because Maduro, he is a dictator and a thug. And there is an interesting thing going on at the minute in terms of the narrative of this, and two things can be true at the same time.

20:11Getting rid of him might bring Venezuela peace and prosperity, but it is the wrong way to do it. You can't just go in and abduct a leader. But this reminds me of when Elon Musk was running Doge or whatever you want to call it, this department for government efficiency. and he just started getting rid of people, you know, and like just absolutely clearing the decks. And the problem is that the result might be, yes, okay, you've totally handled it badly, but you might make things better for the country. Like it might make things better for Venezuela, getting rid of Maduro and equally getting rid of those people that perhaps were doing jobs they didn't need.

20:55And it was entirely the wrong way to do it. But in terms of the narrative that Trump can then have from it all is, look, I've made things better. So I'm not an evil dictator. I help people when I'm doing these things. And that's the danger that people will believe that over seeing the realities of it being handled in a terrible way, which then leads the way for Russia and China to start taking over their neighbors. We talked a lot about China and Taiwan, that's obviously a big issue, Russia, Ukraine, it suddenly means, oh, well, hang on a minute, they've justified it, so can we. Look, there's no question that Maduro was a gangster autocrat who completely improperly seized power after he lost the last election.

21:44And, you know, when somebody like Starmer says, you know, the world Venezuela is better off with Maduro forced from power. It's very hard to disagree with him. As you say, however, all the evidence is that Trump breached international law in order to achieve that outcome, which is a terrible precedent, which I mean, it's not really a precedent for Trump because he doesn't give a fig about international law. But for a country like the UK, international law plainly matters. And many have been struck that Starmer cannot bring himself to criticise Trump over that. But it is a gangster economy as well.

22:27And the worry, which we saw, for example, in Iraq, is when you cut the head off in the way that they have in taking away Maduro, what actually happens is chaos rather than a transition to a democratically legitimate government. And so there are just enormous amounts of uncertainty around what happens next. And, you know, it is, you know, very, very disturbing that Trump has very explicitly said that the winners, the Democratic winners of the last election who were deprived of office, led by this extraordinary woman, Machado, he doesn't have confidence in and he will not essentially allow her to take over.

23:15You know, this is, you know, you know, he claims that this is that he's doing this for democracy, but there's absolutely no evidence of that, given that he is is saying that he's got more confidence in the unelected, you know, vice president who's now been sworn in as president of Venezuela, who, you know, is as anti-democratic as Maduro, which then make, you know, brings us back to what is plainly an incredibly important driver of all of this, which is Venezuelan oil. And it is important to remind people that Venezuela has the largest oil reserves in the entire world, larger even than Saudi Arabia.

23:58They have been catastrophically mismanaged by Maduro, who was not just a dictator, but an incompetent one over the last few years. They They are, you know, they are pumping a fraction, you know, pretty much a third of what they were pumping at the peak. And so there is a big opportunity here. It's not the easiest oil and gas to get out of the ground or the easiest oil and gas to process because it is, I talked about heavy rare earth minerals. This is very, very heavy oil, which is very, very difficult to turn into usable oil. But it is nonetheless, there is an enormous amount of it. And if you want evidence that, you know, that's what it's all about is that, you know, Trump has literally just announced that he is seizing something like two billion dollars worth of oil that's already being taken out of the ground and then says in this sort of bland way, well, that'll be used for, you know, the benefit of America and the Venezuelans.

24:55But no indication of whether it's going to be 95 percent American, 5 percent Venezuela. So, look, he is a property guy. He wants the oil. Yeah. And I think the other interesting point in all of this is, you know, we talked there about international law. He seems to be able to challenge international law a lot more easily than he can challenge his own domestic policies. because there's a lot of people talking about, well, he's doing this to distract everyone from everything else because things aren't going well for him in America domestically. So let's try and win people over by challenging international law and getting away with things there.

25:39And again, we mentioned this with the tariffs. You've got to look as well at what we're not talking about that's going on as well as the things, the big news headlines of dictators being abducted. there'll be other things going on as well domestically that are being totally hidden by all of these big chaotic things he loves doing he loves creating chaos he did it with tariffs and then he reined back on a lot of them and so it's now is the time for us to work out what else is going on that he's not you know not talking about and trying to cover with all this chaos yeah and and just in terms of um i mean he's pretty explicit let's be frank about the value of oil, both to America and he claims subsequently to Venezuela.

26:28I mean, it's already manifested in market share prices. Chevron, which is still operating in Venezuela, its share price up very significantly because it's already got a foothold. And the share prices of other American oil giants also rising because, you know, they can, you know, investors can see the extraordinary gains that could be made if, you know, American companies do get access, thanks to Trump, to, and I repeat this, the largest oil reserves that any country has, greater even than Saudi Arabia. Shall we go to a quick break and then talk about what's going on here in the UK? because Kia Stamm, I don't know what he had in his Christmas dinner, but it feels like there was something punchy in it because he started the year with a bit more fight in him.

27:23You know, he's come out and actually said positive things, which I think we should discuss after the break. Yeah, time's to talk about whether we're going to completely agree on him having his tail up or not. We'll see. We'll be back in a couple of minutes.

28:04Welcome back to The Rest is Money with me, Robert Peston. And with me, Steph McGovern. So the Prime Minister has tried to have a conversation with the British people, despite all the noise that Trump has been making. So what has he been saying? I feel, I know you probably are going to disagree with this, but I do feel like towards the end of last year, it was all, you know, there was a lot of speculation, and there still is, about whether he will remain in power and everything else. But it felt like very negative. Everything was quite defensive. The budget didn't really kind of lift anyone's hopes.

28:38I do feel like he started the year with a bit more gumption. I feel like he's kind of come out. He's talking now, which we have been banging on about for ages, about making people feel better. And that's the key here. I've said this countless times on the podcast. Until you start making people feel like they're going to be better off, you're not going to win them over. And so he's come out with various things that he's talking about, like freezing rail prices, bringing money off energy bills, increasing the national living wage for people um and you know all of this to try and improve people's lives so they feel better off and i think the thing for me is it's not the specifics of what he's saying because i don't necessarily think they're going to make a massive difference but it's more the the feel it feels like the rhetoric is just a bit more positive and more uh and less on the defensive side but robert do you disagree with me no it's not that it's not that i disagree It is just that people, voters aren't stupid.

29:41Right. So, look, I'm not trying to say freezing railfares, putting up the minimum wage, freezing prescription charges, you know, among other things are trivial and irrelevant. But you can only do those things, you know, every so often. They are not an economic growth plan. They are special measures to help people in the short term. And what British people want is hope that over the coming years, not just this year, but over the coming years, that the economy will be growing in a way that lifts living standards in a sustainable way for everybody. and those measures, I mean, they don't even scratch the surface of the kind of growth plan that we need.

30:43And that is still, in my view, absent. Yeah, totally. But I think, and I absolutely agree with you, and we can come to the specifics of the different points he's mentioned, but just on the vibe, and in our next episode, we've got Saul Klein coming on the show, who is a massive venture capitalist investor in tech. He argues that actually we should be way more optimistic about how our innovation economy is doing at the moment and the opportunities in it. And I think you're right on a policy perspective. It's not necessarily going to make people feel better off. But I just think the language feels a bit different.