China’s involvement in Arctic mining has become a focal point of international economic and geopolitical discussions, particularly as the melting ice presents new opportunities and challenges. According to recent data, the Arctic region has emerged as a battleground of geostrategic interest, driven by the competition for critical mineral resources amidst diminishing ice cover.

Despite China’s notable presence in global mineral extraction activities, its Arctic investments are limited and their growth is stalling, with notable pullbacks in certain regions due to economic, political, and operational challenges.

One striking statistic from recent studies shows that Chinese investments have covered only approximately 2% of all mineral licenses in the Arctic, excluding Russia, over the period from 2005 to 2022. This statistic underscores how comparatively minor Chinese engagement in the Arctic remains, especially when juxtaposed with their immense global outreach under the Belt and Road Initiative, which has heavily focused on securing critical mineral supplies.

Among Arctic nations, Canada and Greenland stand out as regions where Chinese investment has notably declined post-2019. In Canada, government-imposed sales and amended investment policies designed to protect critical minerals have reversed Chinese stakes in several projects. Such moves have been supported by national policies like the 2024 amendment of the Investment Canada Act, which aims to regulate foreign ownership more rigidly, particularly in sensitive technology sectors, critical minerals included.

In Greenland, financial challenges and environmental stipulations have led to the cessation or suspension of several Chinese-backed projects. For instance, the Kvanefjeld rare earth project faced suspension due to Greenland’s environmental policy restricting uranium content in extracted minerals. Although political changes could reverse such suspensions, the financial strain remains a significant deterrent.

Conversely, in Russia, a different narrative is unfolding. Chinese investments appear to be on the rise, reflecting the strategic partnership between China and Russia. The two nations have seemingly bolstered economic ties, partly through shared mineral resource ventures, despite international sanctions and geopolitical tensions. Such investments are indicative of a broader trend towards bifurcated resource markets—where Russia and China could potentially align against Western interests in the resource domain, similar to their strategic dealings in oil and gas.

The Arctic environment itself presents inherent operational challenges contributing to China’s investment patterns. High costs and operational risks associated with extractive activities under extreme conditions play a significant role. There are more economically viable regions globally where Chinese investment is higher, such as in Southeast Asia, Central Asia, Africa, and Latin America, regions where the political climate is more business-friendly and operational efficiencies are higher.