Greenland's rare earths opportunity

Materials World magazine
1 May 2016

Rhiannon Garth Jones considers the effort to secure the rare earth supply chain in Europe and how it has contributed to the recent upturn in Greenland’s mining fortunes.

There’s no way to avoid sustainability these days – it’s the buzzword of this generation, and everyone’s getting in on the act. Packaging, construction, energy, mining – whether it’s manufacturing biodegradable parts, being entirely reliant on renewable energy, or keeping an eye on the future when exploiting a resource, every industry is working to improve its practice and image in this area.

Enter the EURARE project, which aims to set a technological basis for the development of a European rare earth elements (REEs) industry that will safeguard the uninterrupted supply of REE raw materials and products crucial for the EU economy in sectors such as automotive, electronics, machinery and chemicals, in a sustainable, affordable and environmentally friendly way. One main focus of this project is the extraction of REEs and uranium from Greenland and, specifically, the Kvanefjeld site on the southern tip of the island that is believed to hold the world’s second-largest deposit of rare earth oxides, and the sixth-largest deposit of uranium.

The push for sustainability in Europe

This focus on safeguarding Europe's REE supply stems from 2010, when China, which supplied around 97% of the world’s REEs, started to impose export quotas and additional taxes on the industry. According to Thymis Balomenos, Senior Researcher in the Laboratory of Metallurgy at EURARE, that action pushed the price of REEs to their peak and, given the essential nature of some REEs to high tech industries, there was concern in Europe and America about supply bottlenecks. In 2012, responding to proposals from the European Community, the EURARE project was founded to secure the domestic supply of REEs, using technologies developed in Europe. Similar efforts were also underway in the USA. While the REEs crisis of 2010–2012 is now over, the European Community remains eager to achieve those same aims.’

The project includes: 

Defining and assessing the exploitable REE mineral resources and REE demand in Europe.

Developing sustainable and efficient REE ore beneficiation technologies that will lead to the production of high-grade REE concentrates and minimise produced tailings.

Developing sustainable REE extraction and refining technologies, achieving at least 95% extraction and separation yields of REEs and producing at least 98% pure REE oxides, REE metals and REE alloys suitable for use in downstream industries.

The development of a strategy for safe REE mining and processing. 

Field demonstrations of the novel EURARE REE exploitation technologies.

Identification of novel sustainable exploitation schema for Europe’s REE deposits.

Greenland leads the way

The world’s largest island, Greenland is believed to have mineral belts that are highly prospective for gold, oil and gas, iron ore, nickel, diamonds, cobalt and rubies. And that’s before considering the world-beating deposits of REEs and uranium. Additionally, rising temperatures have made Greenland’s mineral deposits more accessible, as well as thawing the Arctic sea-lanes – providing better access to the island while also threatening the local fishing industry. All of this has combined to make mining a much more viable and attractive prospect for the autonomous Danish territory. In terms of REE deposits, Balomenos believes that ‘Greenland is one of the most important sites for Europe and for the world’.

Until recently, mining wasn’t allowed by the Inatsisartut, Greenland’s national assembly. But, in 2013, a 15–14 vote provoked by the change in circumstances overturned that ban and granted the first new major mining licenses in years, at Isua on the west coast of the island and Kvanefjeld on the southern tip. At the time, there were concerns that a shortage of skilled labour and the lack of infrastructure would deter possible investors, but that does not appear to be the case. Despite the difficulties of mining in the freezing climate of Greenland, a lot of interest has been shown in the island, including major companies such as ExxonMobil, Cairn Energy, BP and Dutch Shell. 

Kathryn Goodenough, Senior Geologist at the British Geological Survey, notes that, while ‘Greenland is just one of several countries globally that could provide a potential alternative rare earths source to China, it has a number of large rare earth deposits that are relatively well understood because of the excellent rock exposure at the surface’, and that those deposits are ‘certainly world class’.

There’s more to Greenland’s appeal, however. Damien Krebs, Metallurgy Manager at Greenland Minerals and Energy Ltd (GME), a company that has been conducting feasibility studies on the island for eight years, explains some of the other reasons. ‘The size and quality of the deposits allows them to be large low-cost producers, which will result in significant fiscal revenue for the Government of Greenland. This has resulted in a good level of government support for the mining industry. To encourage mining development, it offers a competitive tax regime, helpful government agencies and good geological information. The political stability and low corruption levels of Greenland are also attractive to the international mining community.’

Political complications

The governing coalition of 2013 that passed the new law to allow mining also altered the compensation from such activities, demanding royalties instead of taxes. This switch to royalties was identified as the reason for the country’s fall from 9th to 41st in the 2014 Fraser Institute survey of confidence among mining executives. GME does not seem to have been put off, however – in April 2016, the company updated its feasibility study for its main project on the island, the Kvanefjeld rare earth and uranium deposit, noting ‘reduced capital costs and increased project returns from development’.

When asked about the political difficulties that remain in Greenland’s politics, Krebs stated, ‘The Government is very supportive of the project, despite the fact that the ore also possesses economic quantities of uranium. Uranium makes up approximately 10% of the revenue, so Kvanefjeld is definitely a rare earth mine that produces a minor uranium by-product. However, the presence of that uranium means it has been caught up in local Greenland politics. The left side of politics is openly against the mine, because of the uranium production. This is a philosophical position. The right side of politics is more pragmatic and understands that, if Greenland is to develop its best mining asset, uranium must also be produced.’

Krebs cites a fishing analogy often used in Greenland – if you are a cod fisherman and 10% of your daily catch is salmon, do you throw the salmon back in the ocean? Obviously not. This is the by-catch, which you also sell at the fish market and make some money. You have gone to the trouble of trawling and hauling up the catch and sorting the fish. It is a small task to now freeze the fish and prepare it for sale.

The election contest of 2014 was close and uranium mining was prominent in the debate. The election of a governing coalition that supports uranium mining has, according to Krebs, enabled the continued development of Kvanefjeld and the application for a mining license by GME.

The Kvanefjeld deposit

GME’s main focus has been the Kvanefjeld deposit, and it’s easy to understand why – not only is it one of the world’s largest deposits of rare earth oxides and uranium with a projected lifespan of at least 37 years but, GME believes, it will be a very low-cost producer of rare earths. Krebs states that ‘at current rare earth prices, there are only a small number of rare earth producers that are profitable. GME’s feasibility study estimates that the operation will have significant cash margins even at bottom of the cycle of rare earth prices. This will allow Kvanefjeld to be a long-term and stable producer of rare earths that does not have to lay-off large portions of the workforce when prices are low.’

One concern that has been frequently raised about mining in Greenland is the lack of infrastructure. With 80% of the island covered in an ice-sheet up to 4km thick and the coastline cut by deep fjords, there are no railways, no inland waterways and few roads between towns. The population of 56,000 traditionally travels by boat around the coast, by dog sled in winter or, if necessary, by helicopter. 

Krebs concedes that the local infrastructure is unusually limited, although he highlights the presence of an international airport and local town. GME will build additional large-scale infrastructure, such as an industrial deep-water port facility suitable for berthing large ships, and a power plant capable of supplying 38MW of electricity. That plant will likely use the hydropower potential at the site to reduce the greenhouse gas emissions of the project and provide a sustainable energy source.

Lastly, GME’s solution to the potentially difficult political problem of providing a workforce for a project based near a town of only 1,500 people, is to use fly-in-fly-out workers, whose main residence would be elsewhere (probably the UK) and who would travel to Greenland for a few weeks at a time to work. It is hoped that such an arrangement would give GME the workforce it requires without impacting on the local population. An accommodation village would also be built to house such workers. 

Goodenough warns that the deposits in Greenland are all hard rock deposits that require substantial processing to produce rare earth metals from the ores. However, she believes that ‘the EURARE project has been working on improving the processing methodology and is making good progress’. 

If all goes to plan, the futures of Greenland and Europe could look very different to those envisaged five years ago at the height of the REEs crisis. More importantly, everyone involved seems focused on achieving that goal without ignoring the wider considerations of the local population, the environment, and the long-term prosperity of both the island and the continent. 

To read more coverage of REEs by Materials World, revisit our June 2010, August 2011 and January 2012 issues.