Greenland is a country the size of Western Australia and though 80 percent of its area is locked under the Greenland ice sheet, up to three kilometres deep, more than 400,000 square kilometres of ice free coastal land has the great advantage of accessibility by sea, and in the south, proximity to established transatlantic shipping routes. Deep fjords create ideal natural harbours.
The world’s largest island has basically the same geology as Canada – if you look at the map it is easy to see how they were once a single land mass – and contains the same minerals. Iron and its alloys (iron, nickel, molybdenum, titanium, vanadium) and base metals such as copper, lead and zinc are present in commercial deposits, as is uranium and rare earth elements (REE), gemstones and gold. Investors can be sure of a positive response from the government. Neither should they be put off by preconceptions about Greenland’s accessibility and infrastructure.
With a total business volume of DKK 2.74 billion, The BANK of Greenland is only a small financial institution internationally. In Greenland, however, the bank is the largest bank and the only physically available full service bank. With more than 45 years of close cooperation with Greenlandic industries and public institutions it’s the leading partner for the Greenland mineral resources industry. And when it comes to accessibility and logistics they will find Royal Arctic Line, which uniquely has a market share of 100 percent within the core service of freight to, from and within Greenland, and Air Greenland with its comprehensive scheduled and charter capability are geared up to support them
Last year’s elections in Greenland resulted in the re-election of the left-of-centre Siumut Party which went on to form a coalition government under with the Demokraatit and Atassut Parties. The new Prime Minister Kim Kielsen was quick to emphasise the government’s commitment to resource extraction and creation of a stable investment environment in Greenland: “The coalition will ensure a more stable and continuous mining policy to attract foreign investors,” he promised.
The Prime Minister also pledged not to return to the policy of ‘zero tolerance’ of mining radioactive elements, which was abandoned in October 2013. That was a landmark decision, placing Greenland on the path to becoming a uranium producer like Canada and, and thereby opens up coincident resources of rare earths and other elements to exploitation.
The zero tolerance policy was associated with the stance taken by Denmark on nuclear power generation before Greenland attained self-government status in 2009. Denmark still doesn’t want to contemplate nuclear power, and Greenland has not had to because it has abundant potential for hydro-electric generation. However thinking has shifted over the last couple of decades, said Henrik Stendal who has headed up the MMR’s Geology Department for the last seven years and now assists the new Ministry of Mineral Resources (MMR) led by Minister Andreas Uldum. “We needed to come to terms with the presence of rare earth elements (REE), for which demand has been increasing rapidly. Often REE are associated with uranium and in Greenland one of the big deposits is Kvanefjeld and that is associated with uranium.”
The Ilimaussaq intrusive complex at the southernmost extremity of Greenland, contains huge REE deposits, big enough to end China’s near monopoly in the world market for rare earths that are essential to making cellphones, wind turbines, hybrid cars and many other products. However the problem there has been the presence of uranium and another radioactive element, thorium, in the same deposits these sought-after elements – you can’t separate them without processing the uranium as well, and that was not allowed.
Greenland has 58 percent of the world’s REE outside of China and 65 percent of the ‘heavy’ rare earths, which are in shorter supply. GME’s Kvanefjeld resource and the adjacent Tanbreez project, which is not associated with uranium, make up the world’s largest deposit of rare earth minerals. Now that the ban has been lifted GME can proceed with obtaining an exploitation licence and permission to process both rare earths and uranium, selling the latter into the many markets where nuclear power stations are being built. Uranium will be a by-product of Kvanefjeld, though an important one.
Greenland’s uranium can now be exploited for its own sake and, with 70 new plants under construction round the world and 183 planned within the next decade, it will be needed. The country is centrally located between North America and Europe, both home to important uranium importers. “We know more about the geology of southern Greenland than about the north-west, in the area around the American air base at Thule for example, where more work needs to be done” said Stendal, “but the largest uranium deposits in the world are in Canada where the geological environment is exactly the same as in the Thule region of Greenland.”
Stendal is emphatic that Greenland has the ability to make a significant mark on the global market for critical minerals. The presence of uranium stood in the way of other minerals than rare earths, he points out. “The Motzfeldt deposit, also in the south, contains significant quantities of niobium and tantalum. Both are critical minerals for world industry, but these deposits do contain uranium so the lifting of the ban will positively help them as well.” And there’s a high grade niobium deposit at Sarfartoq near the international airport at Kangerlussuaq in west Greenland. This deposit, which also contains rare earths, has been stalled since its discovery in the 1980s by the presence of uranium but could now be developed he says.
Conversely, uranium is not the only radioactive element in the periodic table. The south-west Greenland carbonatite intrusions nearly all contain thorium which, though not as highly radioactive as uranium, would have influenced rare earth development within these areas, says Stendal. “When people talk about the ban they always think of uranium but no one takes thorium into account. Yet it is associated with nearly all these deposits.”
The decision to raise the ban did not mean mining could go ahead from that date. Greenland has current regulations for exploitation of minerals within the Minerals Act. The regulatory framework to cover the mining, storage, transportation or exportation of radioactive material needs to be in place before exploitation of radioactive minerals can launch. It will take a couple of years to get it in place. There is plenty of best practice on which to benchmark, notably in Canada and Australia, however the International Atomic Energy Authority (IAEA) in Vienna will have to be given oversight of the new regime. There will be a lot of red tape in the process of establishing a new industry, and if only to reassure its own population Greenland is determined to see that all activities are certified safe.
Finally, the change in legislation regarding uranium and other radioactive elements should be seen in the context of the large-scale mining act, passed in December 2012 and amended earlier in 2013. The act aims to ease the path for large projects the bill set the threshold for a project to qualify as “large-scale” at DKK 5 billion, ($724,000,000), and the project’s need for labour in carrying out the construction activities must exceed the suitable, available and accessible workforce in Greenland.
To the debate on the need to mine nuclear materials in the first place will be added a fear that the country will be flooded by Chinese and other low cost foreign workers. These fears are nowhere near as well grounded as people fear, Henrik Stendal believes. The revision of the bill tightens the regulation of minimum wages considerably. No legal basis for non-fixed minimum hourly wages pursuant to foreign collective bargaining agreements is now to be found in the act. “Before a company is allowed in it has to offer a certain level of Greenlandic jobs, suppliers and subcontractors. They can’t come in if they are not competitive, and able to bring with them the necessary skills.” Naturally, Greenland wants to secure as many jobs for its own people, and establish an indigenous skills base to support its new industries. However with a population a little over 56,000 it will need help, especially if it is to preserve its traditional fishing-based way of life. Its great opportunities are attended by equally great challenges.
The government of Greenland’s objective is to license the opening of three to five mines on an environmentally and socially sustainable basis over the next five years. This is a realistic goal. The first mine to open will be the ruby-sapphire mine on the south-west coast of Greenland, about 160 kilometres south of the capital Nuuk. Permitting has been a good process as the government attempts to balance the economic, environmental and social imperatives.
For many years, there has been broad political agreement in Greenland to grow the mineral sector into a principal industry and diversify the economy. Now with the new government in place and the global mining industry preparing for recovery Greenland will be increasingly seen as a good place to invest in. The commitment of General Nice Group may well prompt the cautious institutional and corporate investors in London, Vancouver and Toronto to look anew at Greenland.
Greenland – advanced stage projects
The Isukasia iron ore project is located at Isua approximately 90 miles to the north-east of Nuuk. In 2013 UK-based London Mining was granted a 30-year licence to build and run a giant iron ore mine. At the time the company said the mine was expected to yield 15 million tonnes a year of “very high quality iron ore concentrate to the global steel industry.” The open pit mine will take 3½ years to build with an estimated operation period of 15 years. Apart from the mine itself, the project is expected to include a road approximately 105 kilometres long, a harbour, a residential area, a workshop, fuel and explosives depots and related infrastructure, including possibly an airstrip. In January the Greenland government approved the sale of London Mining Greenland, the owner of the Isukasia project, to General Nice Development, a Hong Kong-based company with its main operational centre in Tianjin City in mainland China.
True North Gems
Likely to be the first producing mine of Greenland’s new mining era, True North Gems’ Aappaluttoq Ruby Project is coming on stream at just the right time for the ruby market, which is worth $2.1 billion annually. The mine is now fully permitted since the local authority approved its Impact Benefit Agreement (IBA) in June 2014. True North was awarded an exclusive 30 year exploitation (mining) licence effective March 10 2014. The mine is currently under construction and in March 2015 President and CEO Nick Houghton announce the filing of a pre-feasibility study which, he said, “... enables our shareholders and future investors to assess the updated information, better understand the project's cost structure, and see the growth potential of the gemstone sector.”
Greenland Minerals & Energy (GMEL)
Focused on delivering a world-class production centre for speciality metals from the Ilimaussaq complex in south Greenland the company is at the stage of setting up a pilot plant and beneficiation circuit. Kvanefjeld is the first of several large-scale deposits to be delineated, and is recognised as one of the world’s largest resources of rare earth elements, as well as containing substantial resources of uranium and zinc. The company has signed MoUs with Chinese industrial conglomerate NFC, whose participation comes through its subsidiary Guangdong Zhujiang Rare Earths Company which was the first group to carry out full separation of fifteen rare earth elements in China, and is recognised globally as a leader in rare earth separation technology.
This private Australian company has spent $5 million developing its kakortokite-hosted REE resource on the southern edge of the Ilimaussaq intrusion, probably the largest rare earth deposit in the world especially of the heavy rare earths such as dysprosium. Separation of eudialite is a simple magnetic process, and the deposit contains no radioactive material. Currently, following completion of a definitive feasibility study (DFS) the construction phase should start as soon as the exclusive exploitation licence is granted. The operational phase will start around 18 months after granting. The mining project consists of: an open mine pit; a processing plant; a port (including a helipad); a mine camp; a tailings deposit; and internally connecting roads. It is estimated to have a production life of several generations.
North American Nickel
The Maniitsoq nickel-copper-PGE property in Greenland hosts numerous high-grade nickel-copper sulphide occurrences and initially was the largest exploration property ever granted in Greenland. It covers 2,954 square kilometres and is larger than the Sudbury Nickel Camp in Canada. An extensive drilling programme has identified very high grade deposits and a large multi-component exploration and drill programme will continue throughout 2015. In April 2015 the company announced an agreement with Minelco AS, a subsidiary of Swedish iron producer LKAB Minerals that will allow it to proceed with the acquisition of the Seqi Port on the southwest coast of Greenland.
Hudson Resources is a Canadian based mining company focused on the Naajat (White Mountain) anorthosite (calcium feldspar) project in Greenland. The White Mountain resource is unique in its size and purity. There is no metallurgical risk to the project – processing is simple and no chemicals are involved, Hudson plans to start construction this year and start producing by the end of 2016, targeting initially the e-glass market (optic fibre) for which anorthosite is a better and more economic option than kaolin. On an adjacent site at Sarfartoq Hudson is developing a REE project.
The Citronen Zinc-Lead Project represents one of the world’s largest undeveloped zinc-lead resources with a resource in excess of 13 billion pounds of contained zinc and lead metal. The project is located in northern Greenland. Ironbark Greenland has a MoU with China’s NFC to provide 70 percent debt funding brokered through Chinese banks. Construction could begin in 2016 with first production two years later. However Citronen fjord is at the northernmost tip of Greenland and deep within the Arctic Circle so shipping access will be seasonal.