A new frontier: Greenland

Materials World magazine
,
17 Feb 2014

Greenland might not immediately spring to mind when thinking of resource-rich countries, possibly because 80% of the land is covered in an ice sheet up to 4,000km thick. Yet the mining industry is increasingly focusing on this Arctic island. Rhiannon Garth Jones reports.

Background
Greenland’s parliament voted by 15–14 to overturn the country’s ban on the mining of uranium and REEs in October 2013. Global warming has thawed the Arctic sealanes and made Greenland’s mineral deposits more accessible, while threatening the traditional industries of fishing and hunting, making mining both a more viable and attractive prospect for the autonomous Danish territory.

In addition to overturning the previous ban, the parliament also granted new major mining licenses, at Isua on the west coast of the island and Kvanefjeld on the southern tip.

Resources
The world’s largest island, Greenland is believed to have prospective mineral belts for gold, uranium, oil, gas and REEs, and the list doesn’t stop there. Australian company Tanbreez Mining has speculated that the proposed Kvanefjeld mine at Narsaq could be one of the 10 largest in the world, and it is likely that more mines will become apparent as the ice thaws. Although there are further legal hurdles to be overcome before uranium mining becomes a reality, the stable political framework of the country, due to its constitutional links with Denmark, adds to investors’ hopes.

Challenges
A number of possible stumbling blocks remain, not least the shortage of skilled labour and lack of infrastructure in the country. The Mineral Resource Act allows large scale-extraction companies to use imported labour and contractors during the development phase of the projects, making clear that when the development phase is over, the migrant workers must leave the country and the indigenous workforce will replace them. The proposal for the mine at Isua by British company London Mining includes the immigration of 3,000 Chinese workers to build necessary infrastructure such as a port and pipeline. Concerns have also been raised about the social impact of so many migrants in a country whose capital city has only 15,000 residents. There are also worries about the environmental impact of mines, and questions over whether it will be Greenland or investor countries who will actually benefit.

In terms of the political landscape, much of the Greenlandic support for the new mining legislation rests on the belief that the country might achieve full independence from Denmark as a result of the revenues raised. But Greenland is not the only territory to be opened up by rising temperatures – the Arctic Circle is also being sought after for its resources, and Denmark’s claim to its share of that terrain comes through Greenland.

Whatever happens, it is clear that the hunt for resources has entered a new and fascinating phase, and this previously overlooked country is well worth watching.

Fast facts
57,000 Greenland’s population

7bln krone Greenlandic administration’s revenue

50% revenue contributed by Denmark

In addition to our three-part mining series, regular mining updates from Rhiannon Garth Jones can be found on Tumblr: materialsworld.tumblr.com