Greenland chooses pro-business, independence parties in potential boost for Trump

By Jacob Gronholt-Pedersen and Tom Little

NUUK, Greenland (Reuters) -Greenland's pro-business Demokraatit Party surged to victory in a shake-up that could boost U.S. President Donald Trump's attempts to tap the island's mineral wealth, with the victors keen for reforms favouring private enterprise and mining.

The Democrats, which favour gradual independence from Denmark, more than tripled their seats to 10 in the 31-seat Inatsisartut parliament, according to results released on Wednesday, and will begin talks to form a coalition.

The strongly pro-independence Naleraq doubled their seats to eight from the prior election, while the ruling coalition lost almost half of its share of the vote.

"People want change," the Democrats' leader Jens-Frederik Nielsen told reporters in Nuuk after the final vote count. "We don't want independence tomorrow, we want to build a good foundation."

Independence became the central campaign theme in Tuesday's election after Trump's repeated insistence that the semi-autonomous Danish territory is vital to U.S. national security and will eventually become part of the United States.

At three times the size of Texas, with a population of just 57,000, the Arctic nation contains vast mineral resources, including rare earth minerals critical for high-tech industries, ranging from electric vehicles to missile systems.

Despite gains for rapid independence advocate Naleraq, Rasmus Leander Nielsen, associate professor at the University of Greenland, said the Democrats were more likely to form a broad coalition with one or both of the outgoing ruling parties, Inuit Ataqatigiit and Siumut, in a show of national unity.

GOOD NEWS FOR TRUMP?

In the election campaign, the Democrats' Nielsen rebuffed Trump's interest in acquiring Greenland, calling it "a threat to our political independence".

However, in campaign documents, the party said it would be open to dialogue with the U.S. on commercial interests.

The election result has moved business development and the mining agenda to the centre of Greenlandic politics.

"If you add up the election result, voters were driven by business development and independence. And that's good news for Trump," said Mikkel Vedby Rasmussen, a professor in political science at the University of Copenhagen. "From a White House perspective, this is probably the best result you could hope for."

"If Trump can negotiate an agreement that gives the U.S. assurances that Greenland will not open up its society to Chinese bases, Chinese mines or Russian influence, then it's sort of under control. And then Trump can... say that he has gained access to minerals."

Greenland has been a formal part of Denmark since 1953. In 1979 it gained some autonomy, although Copenhagen still controls foreign affairs, defence and monetary policy and contributes nearly $1 billion annually to the economy.

The island won the right to seek full independence through a referendum in 2009, but so far has chosen not to do so, on concerns over the economy's ability to be self-sufficient.

A poll in January showed the majority of Greenlanders want independence but are divided as to how fast it should happen.

Denmark, which has seen relations with Greenland worsen in recent years due to revelations of historic wrongdoing by the former colonial ruler, congratulated the Democrats.

"The Danish government will await the results of the negotiations that will now take place in Greenland," Danish Prime Minister Mette Frederiksen said in a statement.

Danish Foreign Minister Lars Lokke Rasmussen said the Democrat's victory signalled a desire for continued cooperation between Nuuk and Copenhagen. "In difficult times we must stick together," he told Danish broadcasters DR and TV2.

There was no immediate reaction from Washington.

FISHERIES

Previous election campaigns in Greenland have focused on how to allocate the funds - accounting for half of its budget - that the island receives from Denmark.

Fishing remains its top industry, accounting for about 95% of exports, and although it contains mineral wealth, it has been slow to extract it due to environmental concerns, severe weather and competition from China, which dominates the rare earth sector.

The Democrats want reforms that will help create a self-sustaining economy by stimulating private sector growth, particularly in the mining sector, and to create incentives for entrepreneurship while reducing bureaucratic obstacles.

"It is a question of making small tweaks and introducing some elements of a market economy into the system, rather than drop a nuclear bomb that turns Greenland into Alaska," said Ulrik Pram Gad, a senior researcher at the Danish Institute for International Studies.

The party, which has also advocated for closer ties with Europe, voted against a 2021 ban on uranium mining that halted development of Kvanefjeld, one of the world's biggest rare earth deposits.

Greenland's public sector currently plays a substantial role in the economy, holding stakes in numerous companies.

In Tuesday's election the ruling Inuit Ataqatigiit party lost four of its 11 seats, while its coalition partner, the social-democratic Siumut party, lost six of its 10 seats.

Overall turnout was 70.9%, up 5 percentage points from the previous election four years ago, voting data showed.

(Reporting by Jacob Gronholt-Pedersen in Copenhagen and Tom Little in Nuuk; additional reporting by Stine Jacobsen, Isabelle Yr Carlsson and Louise Rasmussen in Copenhagen, writing by Jacob Gronholt-Pedersen and Gwladys Fouche; Editing by Sharon Singleton)