Canada backs Greenland molybdenum project with C$7 million grant

Canada has conditionally approved up to C$7 million for Greenland Resources’ Malmbjerg Molybdenum Optimization & Magnesium and Rare Earth By-product Feasibility Study, a non-repayable contribution tied to the company’s east Greenland project. The funding came through Natural Resources Canada’s Critical Minerals Research, Development and Demonstration program, and Greenland Resources said it made Canada the first G7 government to invest in mining in Greenland.

The grant supports work on Malmbjerg, a 100% owned molybdenum deposit in east Greenland that Greenland Resources describes as a Climax-type orebody. The company says the project is designed as an open-pit mine with modularized infrastructure to reduce water use, limit aquatic disturbance and shrink the site’s footprint. It also said the metallurgical program will examine magnesium and rare earth element by-products and use Canadian expertise, with the work running until March 2028. Natural Resources Canada says it has allocated C$246.3 million to the CMRDD program since 2021.

The money lands as molybdenum has moved up the strategic agenda. The metal is used to strengthen steel and improve resistance to heat and corrosion, making it important for aerospace, energy, clean-energy equipment and defence manufacturing. China produces around 40% of global molybdenum supply and imposed export controls in early 2025, a shift that sharpened concern in Europe and North America about secure access to the material.

Greenland’s own permitting process has already advanced. On June 19, 2025, Greenland granted Greenland Resources a 30-year exploitation permit for Malmbjerg. In earlier materials, the company projected a 20-year open-pit mine life, average annual production of 32.8 million pounds of contained molybdenum metal in years 1-10 and a cash cost of $6.38 per pound. Greenland Resources has also said the project could potentially supply all EU and Canadian defence molybdenum consumption and raise Greenland’s GDP by more than 25%.

The project sits inside a broader geopolitical contest over the Arctic. Donald Trump’s attempt to take control of Greenland was rejected by Denmark and Greenland’s government, but it still intensified Western interest in the island’s mineral base. Greenland’s mining sector has remained slow to develop because of bureaucracy and financing gaps, even as governments and companies look for ways to reduce dependence on China.

Greenland Resources has said it signed a memorandum of understanding with Nuna Group of Companies for construction and commissioning of Malmbjerg infrastructure. The company describes Nuna Group as a Canada-based majority Inuit-owned civil construction firm and says the arrangement could help train Greenlandic Inuit workers.