Canada backs Greenland molybdenum project with C$7 million grant
By Axel Miller | 29 Jun 2026
Summary
Canada has awarded a non-repayable C$7 million (US$4.93 million) grant to support the Malmbjerg molybdenum project in Greenland, becoming the first G7 country to directly fund a mining project in the Arctic territory. The funding will support advanced metallurgical research aimed at improving extraction technologies and strengthening Western critical mineral supply chains for defence, energy and industrial applications.
COPENHAGEN, June 29, 2026 — Canada has awarded a non-repayable grant of C$7 million (US$4.93 million) to support the development of Greenland Resources’ Malmbjerg molybdenum project in eastern Greenland, marking the first direct investment by a G7 government in a mining project in Greenland.
The funding will be provided through Natural Resources Canada’s (NRCan) Critical Minerals Research, Development and Demonstration (CMRDD) program following the completion of due diligence. Greenland Resources announced the agreement on Monday.
The grant will finance an advanced metallurgical program through March 2028 to evaluate the use of saline and fresh water in flotation processing, a technology designed to reduce reliance on scarce freshwater resources in Arctic mining operations. The research will also assess the recovery of magnesium and rare earth elements as potential by-products, improving the project’s long-term commercial viability.
Molybdenum is a critical mineral used to strengthen steel and improve its resistance to heat and corrosion. It is widely used in aerospace, defence, energy infrastructure and industrial manufacturing.
The investment comes as Western governments seek to diversify critical mineral supply chains following China’s export restrictions on several strategic minerals, including molybdenum-related products introduced in 2025.
According to Greenland Resources’ feasibility study, the Malmbjerg project contains proven and probable reserves of 245 million tonnes of ore and is expected to operate for approximately 20 years. During its first decade of production, the mine is projected to produce an average of 32.8 million pounds of contained molybdenum annually.
The company says this output could supply about 25% of Europe’s annual molybdenum demand and meet the defence sector’s full molybdenum requirements, although these projections are based on the company’s feasibility estimates.
The Malmbjerg project received a 30-year exploitation licence from Greenland’s government in 2025 and has secured several long-term supply agreements with European industrial customers as Western nations seek to reduce dependence on Chinese critical mineral supplies.
Why this matters
- Strengthens critical mineral security: The investment supports efforts by Canada and its allies to diversify supplies of strategic minerals used in defence, clean energy and manufacturing.
- Advances Arctic mining technology: Research into saline-water flotation could make mineral processing more practical and environmentally efficient in remote Arctic regions.
- Supports European industry: If developed as planned, the project could become a significant source of molybdenum for European steelmakers and defence manufacturers.
- Expands international cooperation: The grant highlights growing collaboration among Western governments to develop critical mineral projects outside traditional supply hubs.
FAQs
Q1: What project is Canada funding in Greenland?
Canada is providing a C$7 million non-repayable grant to Greenland Resources to support metallurgical research at the Malmbjerg molybdenum project in eastern Greenland.
Q2: What will the funding be used for?
The grant will finance research into saline-water flotation processing and evaluate the recovery of magnesium and rare earth elements as by-products.
Q3: Why is molybdenum considered a critical mineral?
Molybdenum improves the strength, heat resistance and corrosion resistance of steel, making it essential for defence, aerospace, energy and industrial applications.
Q4: How significant is the Malmbjerg project?
According to the company’s feasibility study, the mine could produce about 32.8 million pounds of molybdenum annually during its first 10 years, equivalent to roughly 25% of Europe’s total demand.
Q5: Why is Canada investing in a Greenland mining project?
The investment supports efforts to build more resilient critical mineral supply chains among allied countries and reduce reliance on dominant global suppliers.