The US has invested billions in a new maintenance contract for the Thule Air Base located on the edge of Greenland.
The massive 12-year contract announced by the US Department of Defense is worth $3.95Bln and puts the maintenance of the world’s northernmost air base in the hands of a newly established company, which is majority Greenlandic/Danish-owned.
Since 2014, the contract had been held by a US company, marking a departure from the long-term agreement between Denmark and the US and causing grave economic repercussions to Greenland’s national economy that is heavily dependent on annual locked subsidies from Denmark. Copenhagen, for its part, has been doing its best to renegotiate it.
The new contract is expected to boost the economy of the semi-autonomous island by bringing Greenland a steady stream of tax receipts and creating jobs for the local workforce. Denmark's Foreign Minister Lars Lokke Rasmussen has praised the deal as being of "maximum benefit from US military presence".
The contract includes airfield operations, civil engineering, environmental management, food and health services, supply and fuel logistics, seaport, transportation, vehicle maintenance, and community and recreation services. Measures to reverse the damage from rising temperatures and melting permafrost - which is destroying airstrips and causing houses to crack - are also expected.
In the past years, the Arctic has moved back up the US security and defense agenda. In the 2019 Arctic strategy of the Pentagon the region was designated as a potential corridor for strategic competition, particularly with Russia and China. Earlier this year, the US said that an upgrade of the base, which also harbors the world’s northermost deepwater port, was underway, pledging to invest billions in the Arctic.
Thule Air Base is about 1,200km north of the Arctic Circle and some 1,500km from the North Pole on the north-west coast of Greenland, the world’s largest island. It was built during the Cold War in the early Fifties, shortly after Denmark entered NATO in 1949. It plays a key role in the US military's ability to detect and provide early warnings for ballistic missile attacks.
Greenland, the remotest part of the Danish realm, has recently become a key area of US interest. The US opened a consulate in Greenland's capital Nuuk and has shown a keen desire to secure access to the rare minerals to be found in the Greenlandic depths. Former US President Donald Trump notoriously shocked Denmark with an offer to buy Greenland in 2019, a bid Copenhagen refused.