Thursday

5th Aug 2021

Greenland's snap election exposes global mineral demand

  • The proposed mining site is only a few kilometres from Narsaq, a town of 1,350 people in southern Greenland. The project has divided Greenland into two bitterly opposed camps for more than 10 years (Photo: Wikimedia)

A parliamentary election unexpectedly called for in Greenland for 6 April now threatens to impact the access of European industries to minerals that are vital for Europe's green transition.

As the electoral campaign in Greenland picks up speed, still more Greenlandic politicians seem to waver in their support for a proposed mining project in southern Greenland, which holds one of the world's largest deposits of rare earth minerals.

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  • 'Protecting Greenland and the Arctic is not only a local, national and regional, but also a global issue', said Diego Francesco Marin from the European Environmental Bureau (Photo: David Astley)

These minerals are crucial for green technologies like wind turbines, solar panels and electrical cars.

Greenland Minerals Ltd, an Australian-owned company which hopes to extract rare earths from the Kuannersuit mountain in southern Greenland, has joined the European Raw Materials Alliance, a recent initiative by the EU commission.

The future of the mine, however, seems increasingly challenged as more politicians, fearful of losing popular support before the elections, appear sensitive to protests by local environmental groups.

Shifting signals about the mine from Siumut, Greenland's governing party, have caused particular uncertainty. The party had a new chairman in December.

"The party's new leadership tried to get the public hearings about the mine postponed. It looks to me as if Siumut is more divided on this issue than ever," Jensine Berthelsen, political editor of Sermitsiaq, Greenland's main newspaper, told EUobserver.

Greenland's main opposition party, Inuit Ataqatigiit, is vehemently opposed to the mine and scored well in the latest opinion poll.

Public hearings on the environmental impacts of the Kuannersuit mine had just begun when the fresh general election was called.

After the elections, a new government in Nuuk will consider complaints collected during the hearings and decide whether or not to grant Greenland Minerals a licence to mine.

Uranium controversy

The proposed mining site is only a few kilometres from Narsaq, a town of 1,350 people in southern Greenland. The project has divided Greenland into two bitterly opposed camps for more than 10 years.

Critics fear large scale environmental devastation, in particular since the Kuannersuit mountain also contains substantial deposits of uranium that will surface with the rare earths.

The head of the Nuuk office of the World Wildlife Fund, Kaare Winther Hansen expressed his concerns in December. "First of all, Greenland Minerals will not ship its chemical waste out of Greenland. They want to dump it in a lake behind an artificial dam, and there are doubts about these dams: Will they last or will they not? We are not impressed," he said.

"Secondly, they will not establish an underground mine, but an open pit mine on a location with thorium, uranium and fluoride compounds, which are potentially dangerous and likely to spread in the surrounding area. The citizens of Narsaq live only five kilometres from the nearest part of the mine. They use surface water for drinking, so you will also have a dust-problem," he told this reporter.

On 10 February, Greenland's environmental groups were supported by more than 100 environmental groups from around the world. They appealed to the governments in Nuuk and Copenhagen and to the EU, asking for a halt to the Kuanersuit project and to all other large-scale mining in Greenland.

"Protecting Greenland and the Arctic is not only a local, national and regional, but also a global issue", said Diego Francesco Marin from the European Environmental Bureau, a private network of 160 civil society organisations.

"The European Parliament has already expressed support for the idea of an Arctic sanctuary and people all over the world realise that the Arctic environment is particularly vulnerable to pollution, because it recovers very slowly," Marin said.

A halt to large-scale mining in Greenland would also hurt another potential rare earth mine situated at the mountain plateau known as Kringlerne some 25km from Kuannersuit.

The project at Kringlerne holds no uranium and is also in the process of securing official permits for its mining operation.

The production of rare earth minerals is technologically demanding and has been known to cause severe environmental challenges, in particular in China.

It includes chemical extractions of the sought after minerals and subsequent depositing of millions of tons of crushed and partly contaminated ore.

Jobs and growth

Supporters of the mine at Kuannersuit tend to focus on the 700-800 permanent jobs the mine would provide in a region which has long smarted from unemployment and depopulation. Also, supporters talk of potential economic benefits to Greenland and its 57.000 people.

According to Greenland Minerals' estimates, Greenland's treasury is likely to receive more than $200m per year in taxes and other income throughout the 37 years of projected mining. This would have substantial impact on Greenland's future economic challenges.

"We will simply close the holes in Greenland's economy," Jørn Skov, Greenland Mining's executive managing director said in December.

He said that the Kuannersuit mountain is rich especially in four key rare earth minerals — neodymium, praseodymium, terbium and dysprosium.

The deposits were certified by Australia's Joint Ore Reserves Committee, and the company claims it can satisfy one-fifth of the world's demand for these four minerals: "Greenland can deliver 15-20 percent of what is needed to drive the green transition," Skov said.

New EU campaign

Europe's dire need for rare earths like those in Greenland was highlighted last September, when the EU Commission launched a large-scale campaign to secure Europe's future supplies of rare earths and other strategic minerals.

The commission presented an Action Plan on Critical Raw Materials, a 2020 List of Critical Raw Materials and a foresight study.

The authors underscored that China presently controls more than 90 percent of global production of rare earth minerals.

The new initiative was launched by Thierry Breton, commissioner for the internal market: "A number of raw materials are essential for Europe to lead the green and digital transition and remain the world's first industrial continent. We cannot afford to rely entirely on third countries – for some rare earths even on just one country," he said.

Greenland is not part of the EU, but linked to the union as a semi-autonomous part of the Danish kingdom and as an OCT — Overseas Countries and Territories to the EU.

The EU has long provided Greenland with economic support for education and other sectors through the EU-Greenland Partnership Agreement and the EU Commission negotiates fishing rights for European fishing fleets in Greenland's waters.

Fear of Chinese control

Greenland's minerals and the need to prevent Chinese control is high on the agenda.

In 2012, Antonio Tajani, then vice president of the commission, travelled to Nuuk to secure that Greenland would continue to sell its minerals on the free market.

A letter of intent was signed by both parties, but this has not prevented Chinese interest.

In 2016, Chinese mining conglomerate Shenge bought 12.5 percent of Greenland Minerals' shares.

Shenge is still the company's largest shareholder, now with nine percent of the shares, and Greenland Minerals says it relies on Shenge to provide the technology needed for the mine at Kuannersuit, if political permission to extract the minerals is secured.

In 2018, Greenland Minerals signed a non-binding agreement with Shenge, that Shenge might eventually buy the total output of rare earths from Kuannersuit, a total of some 32,000 tonnes of ore.

By December last year, however, this had changed.

Greenland Mining now said it wanted to export all potential outputs of rare earths from Kuannersuit to Europe. Jørn Skov, the executive managing director, spoke highly of the new EU campaign, in particular the European Raw Materials Alliance, which aims to connect European industries with suppliers of strategic minerals.

Trump saw it

In the US, Greenland's rare earths are also in sharp focus.

In July 2019 then US president Donald Trump issued a presidential memoranda asking the US secretary of defense to do more to secure future supplies of rare earths for the US arms industry.

The president called for urgent "purchases" and "purchase commitments" abroad.

Three weeks later, speaking of strategic interest and Greenland's minerals, the president suggested that the US might buy Greenland, the world's largest island, from Denmark.

The suggestion was firmly rejected by Greenland and Denmark, but the US has continued to increase its cooperation with Greenland particularly in the mining sector.

In June 2020, the news portal DefenceNews reported that the Pentagon had asked the US congress to allow the US government to spend up to $1.75bn on rare earth minerals that are used for the production of - among other military items - Javelin missiles and F-35 fighter jets.

Author bio

Martin Breum is a Danish journalist specialising in the Arctic and a regular contributor to the EUobserver.

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