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Independence drive to springboard Greenland's mining into new phase

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Independence drive to springboard Greenland's mining into new phase

Mining is seen as the best hope for Greenland's slow-burn independence movement which came to a head in September when the ruling coalition lost its majority over the issue. Now Australians, who led the last wave of resources-based foreign investment a decade ago, are leading the charge for the sector which experts say is about to springboard into a new phase.

Greenland Prime Minister Kim Kielsen announced a new minority government on Oct. 2 after pro-independence party Partii Naleraq said on Sept. 9 that it would quit the coalition over a plan for Denmark to part-fund a planned upgrade of three airports of strategic interest to both Beijing and Washington, the latter of which has a military presence in Greenland.

Global risk consultancy Control Risks' Copenhagen-based central and eastern Europe and Nordic region analyst Stina Hartikainen told S&P Global Market Intelligence that while the U.S. alliance could ultimately become an issue impacting independence, Denmark is keen to help Greenland foster its mining industry, given it supports Greenland's economy to the tune of over US$500 million a year.

John Mair, Managing Director of Greenland Minerals Ltd., whose Kvanefjeld project could be the world’s fifth-largest uranium mine and second-biggest rare earths operation, said he keeps in "close dialogue" with Denmark's foreign ministry which oversees Greenland and verified that Denmark, which granted Greenland self-rule centuries after ordaining it as a Danish colony in 1775, was "very supportive" of both Greenland's mining and the ensuing economic independence.

Elements in both Denmark and Greenland are concerned that courting China too much could upset the U.S.; and Mair said Denmark was also interested after it signed a non-binding memorandum of understanding in August with Shenghe Rsrcs Hldg Co. Ltd., which also cornered the A$10.3 million raising which the junior secured in Nov. 2017. The Chinese company confirmed its intent to maintain its 12.5% shareholding in the process.

Mair said all parties going into Greenland's April elections where independence was a key issue were pro-mining, having also noted in an Oct. 11 statement to the ASX that the Democrat party, which won six parliamentary seats in April's elections, had entered into an agreement with the coalition government led by the Siumut party to support mining.

The Oct. 11 statement said the reformed government had acknowledged that it was nearly time to process Kvanefjeld to the next stage of public consultations, and Mair told S&P Global Market Intelligence that Australia, Canada and London-listed companies are developing a "new generation of mines which will be larger scale than the mainly small-scale mining done thus far, with the exception of the likes of the now-closed Ivigtut cryolite mine.

Australians helping bureaucrats

Mair said pro-active Greenland resources bureaucrats have visited Australia to understand the JORC reporting codes and since he led Northern Minerals into the country in 2007 he and other Australian, then Canadian and London miners, have helped them understand what international investors want, and that "the money doesn't differentiate between Greenland and other places."

ASX-listed Ironbark Zinc Ltd. also has the well-advanced big Citronen zinc project in the north, TSX Venture-listed Hudson Resources Inc. is developing the White Mountain anorthosite project, and at an earlier stage, Greenfields Exploration Ltd. is also exploring for nickel in Greenland.

Major Chinese coal and iron ore importer General Nice Development Ltd. also took control of the planned US$2 billion Isua iron ore project in January 2016 from previous owner London Mining Plc, which went bankrupt.

Though Isua was not expected to be developed any time soon, both Mair and Hartikainen said Greenland has increased its competency and understanding in administrating the industry and what's required to secure foreign investment, and the long-term relationships that build confidence.

Hartikainen said that natural resources is the best way to diversify the economy given that other urgent social concerns aside from independence like high unemployment, inequality and related economic issues that "need to be addressed head on ... and with a lot of the regulatory frameworks in place, Greenland is in a better position than ever to accelerate these projects and get them moving."

"There's a surging interest in Greenland every few years, but they are moving towards a place where this will actually start to happen fairly soon," she said, and that independence is "on the cards" in the long-term plans of both Greenland and Denmark.

She has witnessed a "much more positive attitude" from Greenland's recently re-formed government and the previous one which had mining "high on the agenda".

Greenfields Exploration Managing Director Jon Bell also told S&P Market Intelligence that Greenland's parties "recognize that mining is the only real meal ticket to independence."