Greenland drills up gigantic resources
The dream of prosperity has the Social Democrat Hammond registered the election victory: It wants to ensure that Greenland's resources benefit their own citizens. In fact, the people are sitting on a huge treasure.
Fish and prawns are still Greenland's most important exports. But this is about to change on the island striving for independence from Denmark between the Atlantic and the Arctic Ocean soon: mineral resources that are stored in Greenland's ice-free coastal strip, to be developed, increase the prosperity of the population and contribute to the financing of sovereignty.
Social Democrat Aleqa Hammond has confidently won the parliamentary elections on the vast polar island with only 57 000 residents, with the promise of making this wealth available to residents. The future head of government wants to demand more from foreign investors, but also loosening the hitherto prevailing ban on mining uranium and rare earths. Hammond struck with their party Siumut the left-wing socialist leader Kuupik Kleist in the parliamentary election clear, was communicated on Wednesday in the capital Nuuk.
Hammond had accused the previous head of government in the election campaign, a premature sale of domestic resources to Chinese interested parties. Among other things, he had succeeded in overriding the Greenlandic minimum wage for several thousand Chinese miners in a planned ore mine north of Nuuk.
Hammond announced on election night that she would resubmit this regulation in the new parliament. She also wants to enforce higher taxation of foreign investors. Hammond also advocates a relaxation of the hitherto complete ban on uranium and "rare earth" mining, which are important for high-tech products.
The Greenlanders are connected with the ex-colonial power Denmark since 2009 only in a "Reichsgemeinschaft". You independently decide on all matters except foreign and security policy. But Greenland still has to cover half of it with subsidies from Copenhagen. There is an obvious way out: their own mineral resources, which have become much more accessible in the course of climate change.
Zinc from the lemon fjord
"Greenland needs to develop the resource sector," said Jorn Skov Nielsen, Vice Minister of Economy, Labor and Natural Resources, as he presented the island's resource wealth to an international audience at the PDAC Mining Fair in Toronto.
If Greenland, whose budget is now almost half financed by subsidies from Copenhagen, is leaving the country for Denmark, sources of revenue must be tapped. So far, the economy is based on a few pillars. Of the total export income of 2,5 billion Danish kroner (about 330 million euro), about 80 percent is accounted for by the sale of fish and shrimp. Tourism is another important revenue factor, while mining accounts for only one percent so far. "We have to mine minerals, oil and gas," explains Nielsen.
Greenland relies on people like Jonathan Downes. He is the director of the Australian company Ironbark, which plans to commission a zinc-lead mine in Greenland's northern Greenland at 2015. The fjord at the edge of the Greenland ice sheet has nothing in common with citrus fruit. The name was given in memory of a Danish resistance fighter against the German occupation in the Second World War, Jorgen Haagen Schmith, who led the code name "Citron".
Downes believes that the zinc price will rise if 2015 / 2016 comes to short supply shortages. "Then we're here." The zinc price crashed in the 2009 crisis to just over 1000 dollars per ton and is now at 2000 dollars. Zinc fjord is expected to produce zinc throughout the year and will be exported during the three months the river is navigable.
According to the government, Citron Fjord could be among the ten largest zinc mines in the world. The map of Greenland, on which raw material warehouses are displayed in different colors, shows a ribbon along much of the 44.000 kilometer long coast. Only the southwestern part of the coast with the capital Nuuk and most places is largely free of ice throughout the year.
Canadians and Australians lining up
The Federal Institute for Geosciences and Natural Resources and the German commodities agency DERA have in a study the "mineral raw material potential Greenland", put together - of metals such as gold, platinum, silver, copper, rare earths, molybdenum, tungsten and chromium on industrial minerals such as cryolite, graphite and Olivin up to precious, jewelery and natural stones. Greenland offers opportunities for the raw materials hungry industries of Europe and North America and for the Greenlandic population, as the increased use of domestic raw materials should finance autonomy, says the DERA. At the same time, however, the interest of Greenlanders and the rest of the world in protecting the "highly sensitive and unique ecosystem of the Greenlandic Arctic" must be considered.
The associated "extremely high approval requirements, the difficult climatic conditions and the largely non-existent infrastructure would have to be taken into account in investment decisions.
Around 40 companies are engaged in resource exploration and mine development, more than half of which come from Canada and Australia. 150 licenses for resource exploration, exploration and mining are in force, more than ever before. With nearly 95 million euros, 2011 exploration spending peaked.
Gold, titanium, rare earths
Greenland's politicians and the Geological Survey of Denmark and Greenland are now seeing the island on the threshold of exploration towards promising mining projects. Currently, there is only one producing mine, the Nalunaq Gold Mine, which was mined by 2004 and 2008 Gold, then decommissioned for a year and has returned to precious metal since 2010.
Mines such as the Seqi olivine mine at Nuuk, the Maarmoril Black Angel zinc-lead mine and the molybdenum mine at Malmbjerg on the east coast have been temporarily decommissioned, which can re-produce at favorable market conditions. This is already planned for Black Angel. In addition to the Citron Fjord mine, plans for the mining of rare earth near Kringlirne at the southern tip of Greenland, for the development of the iron ore deposit at Nuuk and for ruby, iron, titanium and vanadium deposits in the Southwest.
Greenland expects opportunities to become one of the largest non-Chinese suppliers of rare earths important for the high-tech industry, with kringlirne and other depots. In coastal waters - such as between Greenland and Canada - oil and gas deposits are suspected.
Greenland has a very large raw material potential, even on a world scale, and is likely to become an important supplier of raw materials in the long term, according to DERA.
But the way there is far. The mining industry in Greenland has been experiencing an upsurge since 100 years. Mines were opened and closed, either because the deposits were exhausted or the world market prices made the promotion unprofitable.
But for the island, whose gross domestic product 2009 was just 1,9 billion dollars, even a few mines that could open in the coming years will mean a significant boost in gross domestic product and many jobs.
Source: Handelsblatt
