Greenland Expects Four New Mining Applications In '12; Seeks To Build On Growth

Debbie Carlson

09 March 2012, 12:00 p.m.
By Debbie Carlson,
Global news editor, Kitco News
http://www.kitco.com/

(Kitco News)--Greenland expects three applications for mining permits in 2012 to be submitted, which will add to the nearly 150 active and applied licenses the country has already granted, officials at Greenland's Bureau of Minerals and Petroleum said.

In addition to those three, one application is already under review. Greenland has seen brisk growth in active and applied license since 2002 when there were 17 mineral licenses, said Ole Fjordgaard Kjaer, deputy head of license department for the BMP.

Those applications will be for rubies, rare earth elements, zinc and iron, said Henrik Stendal, head of geology department at the BMP. There are about 35 mineral companies active in Greenland and about 15-20 oil companies, with several holding multiple permits.

Officials at the BMP spoke to Kitco News on the sidelines of PDAC2012, the Prospectors & Developers Association of Canada's annual convention, which was held this week in Toronto.

The idea of mining in Greenland is starting to change from being a curiosity to a reality, with one gold mine already in operation at the very southern tip of the country, the Nalunaq gold mine, which has an annual production target of 25,000 ounces of gold.

That may be small potatoes to giant mines in Canada, South Africa or China, but it represents the possibility of an entire new industry to Greenland. Currently, about 90% of its domestically generated revenue comes from fishing and exports of that catch, Stendal said.

There are great hopes to build up the mineral industry in Greenland. The first large-scale mine in Greenland will be the Isua iron ore deposit, which is located 155 kilometers south of the Arctic Circle and 150 kilometers northeast of the capital, Nuuk, on the western side of the island.

Three other large scale projects include Malmbjerg, an open-pit molybdenum mine which can produce 50,000 tons of ore daily on the east coast; Citronen Fjord, a lead-zinc mine on the central northern tip; and Kvanefjeld, the rare earth elements mine in the south.

Stendal said the logistics of mining in Greenland are not unlike mining in northern Canada. In the southern part of the Greenland, drilling can be done four to five months of the year and sometimes can start as early as April. In the north, the season is shortened to about two to three months, although the region also receives 24 hours of daylight during that time.

"You just have to remember, there are no roads between cities, so you have to take a helicopter or an airplane," Fjordgaard Kjaer said.

Sea travel is possible on the western side of Greenland, from the southern tip to about the city of Sisimiut, roughly one-third north, tucked just inside the Arctic Circle, as the ocean remains ice-free. This zone is also where most of the population resides.

The Citronen Fjord, which is an advanced exploration project, could be turned in to a mine within three to five years, Stendal said. That project is on the northern tip of Greenland. The plan is for it to be an underground mine and once ready for production it then can be operated 12 months out of the year, he said.

CLIMATE CHANGE EXPOSING MORE EARTH

The story of climate change exposing more land and allowing Greenland to access its mineral wealth has been known for some time. Stendal and Fjordgaard Kjaer pointed out how the Black Angel zinc mine on the west coast of Greenland was reopened to mining by the retreating glacier. They also note the inland glacier has melted so much that a small village north of the town of Ummannaq on the northwest coast has started its annual celebration of the sun returning three days earlier than usual.

As Greenland's mineral sector is in its infancy, the country is taking care to manage the development of the new industry. In an effort to be more business-friendly, the government is trying to streamline the process to apply by making the BMP a "one-stop shopping" for businesses. Firms work exclusively with the BMP and do not need to apply to various government offices, Stendal and Fjordgaard Kjaer said.

A mining school has also opened up to train local residents in the industry, they said, which will allow businesses to begin to draw skilled labor from the community.

While Greenland tries to encourage more mining companies to the country, it is requiring environmental impact assessments that include collecting baseline data regarding the region. Having a plan for the entire lifespan of the mine will help ensure that once a mine is closed, the region's environment is returned to that baseline. Considering the country's dependence on fishing for revenue, environmental safety is of high importance, Stendal said. Social impact assessments must also give preference to local skilled labor, he added.

WHAT TO DO WITH THE BOUNTY

It's rare than a modern country receives the potential of wealth in the way that Greenland might. In addition to mineral wealth, the country hopes to expand its crude oil and natural gas fields. If it all comes to fruition, the future of this fishing nation could change.

Stendal and Fjordgaard Kjaer said Greenland hopes to learn from past mistakes that other countries have made with their resources wealth. Like Norway, Greenland is seeking to put some of its oil revenues into a fund.

There is also some talk that the bounty between minerals and fossil fuels could be enough to allow the country to become independent. Greenland remains an autonomous country within Denmark and the CIA World Factbook said 60% of government revenues come from Denmark, as of 2009 data.

Stendal said independence is a topic of discussion in the country, and views go back and forth. Monies made from mineral wealth alone won't be enough to make the change, it would also require enough revenue from energy production, he said. "In the end, (independence) is up to the politicians," he said.

Editor’s Note: Click Here For More PDAC 2012 Coverage.


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