Greenland’s economic landscape reveals
Dr. John Mair interviewed by Foreign Direct Intelligence; firmly established as the world’s premier publication for the business of globalization, foreign direct investment and the global insight from the Financial Times.
Greenland is making a robust effort to forge a sound extractive industry by actively marketing itself as an attractive destination for foreign direct investment in this sector. In 2015 alone, several marketing campaigns aimed at enticing foreign companies to set up shop in the world’s largest island where Greenland Minerals and Energy have set up shop.
Below Greenland’s surface lies a cache of resources ready for extraction.
The last boom period between 2003 and 2013, was a remarkably productive time for Greenland and its profile as an emerging resource country grew immensely, which has been active in the country for nearly a decade. This period saw a great increase in companies coming in to explore for quality projects, with numerous projects identified and advanced.
This brought about the opportunity for Greenland to develop its natural resources sector as a cornerstone to its future economy. Importantly, it brings political will for the government to work closely with [foreign] companies to bring this to fruition. Part of the challenge is that there hasn’t been a lot of precedent in developing mining projects in Greenland and, from an investment perspective, money follows precedent.
Greenland’s economy is heavily reliant on fishing – mainly the export of shrimp and halibut – which brings in about 90% of the island’s revenue. It also continues to receive a generous grant from the Danish government. The most recent figures issued by Statistics Greenland show that the island received grants of $532m and $535m from the Danish government for 2013 and 2014, respectively. Its GDP for 2013 was $1.65bn.
Dr Henrik Stendal, the chief geologist at Greenland’s Ministry for Industry and Mineral Resources, acknowledges that the island needs to diversify away from fishing. Tourism is one sector that Greenland is looking to expand, but it is the extractive industry that is potentially more lucrative.
“The Greenland government is trying to get income from other sources. We want to get more income from minerals and oil and gas in the coming years. We’ve been promoting the minerals sector for the past 15 years to companies in Canada, Australia and China,” says Mr Stendal.
Greenland Minerals abiding to all Environmental concerns
In readiness for foreign company participation and investment in its economy, Greenland has been busy drafting, amending and passing legislation aimed at ensuring that not only companies are attracted to invest, but also that future investment is conducted within clearly defined parameters. Consultation with the public by way of civil society and environment protection groups has been part of the process of setting out a code of practice for foreign companies participating in Greenland’s economy. Feasibility studies carried out by companies and any subsequent exploration and exploitation by them are expected to factor in both the social and environmental impact on what is still a largely unspoilt space.
This is important for Greenland, with its small population of just over 56,000 inhabitants, whose culture and identity are very closely tied to the environment in which they live, according to Naaja Nathanielsen, an opposition politician in Greenland’s parliament (the Inatsisartut), who also sits on both its finance and tax and mineral resources committees.
“We have made different legislative steps that are supposed to clarify how we could open larger scale mining projects. A key clarification were the rules and terms of the workforce coming into Greenland, by making it as attractive as possible for bigger companies to move in while making sure that all conventions and agreements are respected regarding workers’ rights and wages,” says Ms Nathanielsen.
Greenland Minerals and Energy, while domiciled in Australia, has been operating in Greenland since 2007. It was clear from early on that our key project, Kvanefjeld, was globally unique. We always look for projects that have clear potential to operate in the lowest quartile and be internationally competitive.
This polymetallic project has an advantageous multiple revenue stream as a low-cost producer of rare earth metals that generates a range of by-products including uranium oxide, zinc and fluorspar. Other companies to have shown an interest in investing in Greenland include London Mining, Rare Earth Minerals and Cairn Energy.
China and its demand for raw materials makes Greenland a potentially successful destination for foreign investors.
Read Full Article by Charlotte Adlung http://www.fdiintelligence.com/Locations/Europe/Greenland/Greenland-looks-to-cash-in-on-minerals-and-precious-metals-rush?ct=true