INTERVIEW Greenland’s deputy prime minister
Mining for minerals could transform Greenland’s economy
By Jennifer Rankin
28.04.2011 / 05:15 CET
Arctic island could be on the brink of a modern-day gold rush.
Greenland has become the destination of choice for politicians on ‘climate change’ tours. But in future visitors may be just as keen to examine what is under the ice as the melting glaciers above it. Greenland, the world’s largest island and the only territory ever to leave the European Union, has vast and virtually untouched stores of gold, gemstones, iron and precious rare earth metals.
Now Greenland could be on the brink of a modern-day gold rush. For Jens B. Frederiksen, the deputy prime minister, who is responsible for the country’s infrastructure, including transport and energy, there is huge potential in Greenland’s natural resources, especially the rare earth metals.
“We are very aware of the political situation worldwide where China is dominating the market, and we know how big the need is in the western world for rare earth metals, so there are a lot of possibilities in these minerals,” he said in an interview with European Voice earlier this month.
Rare earth metals, a group of 17 elements used in the production of scores of hi-tech items from mobile phones to wind turbines, have taken on geopolitical significance since China temporarily blocked shipments to Europe, the US and Japan in 2010, and introduced export restrictions for 2011.
If prospectors’ estimates prove accurate, Greenland’s (rare earth) supplies could reshape the world market. Last December, Greenland’s government gave the Australia-based mining company Greenland Minerals and Energy Limited the go-ahead to investigate the Kvanefjeld site on the south-western tip of the territory. The company believes that this site could meet at least a quarter of current demand for rare earth metals, with a potential 4.7 million tonnes of rare earth oxide in the ground, plus sizeable deposits of uranium and zinc.
Mining licences are now rolling off government presses. According to a recent article in Mining Journal, in the first ten months of 2010 the government issued 77 exploration licences, 21 prospecting licences and four exploitation licences.
Natural resources might transform Greenland’s economy, which is still dependent on fishing and subsidies from the Danish government (Greenland remains part of Denmark, although the territory has had home rule since 2009).
Relations with Europe have been patchy, particularly since an EU decision, which came into effect in August 2010, to ban imports of seal products in the name of animal welfare. Although the law includes an exemption for products from seals hunted by Inuit, the impact on seal-hunting communities has been “very hard”, said Frederiksen, with around 300,000 skins unsold. (At the end of the interview the deputy prime minister produced his sealskin briefcase with a flourish.)
Both sides will attempt to put the row over seals to one side as they embark on negotiations to update existing co-operation agreements. The current EU-Greenland ‘partnership agreement’, which expires at the end of 2013, is worth €25 million a year to Greenland. A further €15.8m, spread over six years (2007-12), flows to Nuuk from granting EU fishing vessels the right to fish in its waters.
Frederiksen is keen to wrap the two agreements into one, and stresses the bottom line: “It is important for us that we don’t get less money and of course we would very much like more money.”
Today Greenland remains a relatively poor country dependent on fishing and hunting. “Of course if we succeed with all the minerals and oil…we will earn a lot of money and the money from Denmark will be lower,” Frederiksen said. But, turning to a proverb resonant of Greenland’s old way of life, he sounded a note of caution: “We cannot sell the skin before we shoot the bear.”