Country Profile: Greenland

The Greenland of opportunity
This issue of IRJ has featured a couple of innovative miners working in Greenland, which has sparked interest for us to look more closely at this emerging resources region. This arctic island is an autonomous country which is part of the Kingdom of Denmark and for this exact reason, this icy paradise warrants further investigation today. The subject of ‘self rule’ in Greenland has created great potential and commercial interest for mining companies, whom, under new political landscaping, are able to achieve mining licenses under Greenlandic award instead of the previous Denmark control. In short, Greenland’s key to self rule lies in its economy and control, and mining offers a huge opportunity in securing just that.

Towards self-rule

To shed a little light on Greenland’s politico-economic position today, 2009 saw 57 per cent of the nation’s government revenues come from Denmark. The global financial crisis has hit home here, as with the majority of the world, bolstering a rise in unemployment and sending analyst predictions for GDP in 2009 into decline. The Greenland Home Rule Government (GHRG) has reacted to this with steps to improve the employment situation which includes raising the age of retirement from 60 to 63 years of age, but its reliance on the fishing industry within its prospects for economic growth remain strong, and as such, dependency on foreign trade and relations are a central aspect. In fact, a foreign trade deficit has been registered since the closure of the country’s final remaining lead and zinc mine in 1989. However simultaneously, development towards self rule and simultaneous economical diversification has been ongoing for decades now.

Revision of the political control Denmark holds over Greenland took place under committee examination back in 1973. Home rule was acquired by the GHRG back in 1979, and in the years that followed there have been a series of notable collaborative efforts between the nation and Denmark to make this work. In 2003, a series of mutual agreements regarding Danish foreign and security policy were agreed. Then in 2005, a Danish-Greenlandic Commission followed which was geared towards the provision of further autonomy for Greenland. In the early part of 2008, a framework for ‘self rule’ was offered up by the Commission, which held the door open to Greenland’s international legal recognition as both a people, and to govern the oil and gas and mineral rights held within the land.

Where does mining fit in?

To consider the general landscape of mining in Greenland, for the most part there is less activity than there is recognition of the wealth of resources within, particularly gold, base metals, REE, PGE. Its geology bears significant resemblance to more mining-exposed areas within Europe and Canada, which in itself shows promise because the transferrable knowledge and experience already exists to economically realise and extract the resources present. This has resulted in mounting exploration activity and it is easy to see how promising the region is. The only potential difficulty is environment. There is not necessarily beneficial existing infrastructure, and only 15 per cent of the country is not covered by some sort of ice. However, given the great potential and great exposure to the geology which some have encountered, this is by no means an economic pivot to the work growing there.

The government of Greenland has outlined its intentions to make mining a primary industry, which not only allows it to further diversify from fishing and improve upon foreign trade, but also allows it greater recognition and character as the autonomous country it is working to become. On Greenland’s Bureau of Mines and Petroleum website, the country states that:

“The Bureau of Minerals and Petroleum (BMP) under the Greenland Home Rule is responsible for the management of mineral resource activities in Greenland. BMP aims at ensuring professional promotion of the mineral potential in Greenland to the international mining industry. “

The country was present at the industry hub that is the Prospectors and Developers Association of Canada (PDAC) in March 2010, which only emphasises its seriousness and inclination towards becoming a mining-embracing country. Its PDAC presentation, which is available online at www.bmp.gl, explains that Greenland has had, “a very positive development of mineral licence interests during the last four years, where the numbers of mineral licences have tripled.”

Appearing at PDAC was a really significant step for Greenland’s approach towards mining, and as the presentation explains, the technical sessions held aimed to show exploration and mining interested parties just how great the opportunities for mineral resources were and to embellish upon licensing and terms and conditions to make clear exactly how lucrative the country is.

“The BMP is a one-stop-shop authority that makes unnecessary for applicants to contact other departments within the Government of Greenland,” the PDAC presentation states, which likely only furthered interests of companies who are used to jumping through hoops and piling up admin in order to gain approvals in other parts of the world.

But what happens next?

It goes without saying that first mover advantage is (or maybe was) on the table here, but what is particularly interesting is not only Greenland’s efforts to diversify and embrace mining, but the productive way the country appears to be going about it. Let’s be honest, the resource potential is well-confirmed, and stability of government is also well-accounted for. The geology is understood, and the mutual benefits for both explorers and the Greenlandic government alike are clearly presented. Perhaps one of the most attractive aspects to this scenario is quite how straight forward the Greenland BMP intends to make and keep mining and exploration licenses. By offering what is somewhat of a blank canvas, no outdated policy or previous stigma attached to a past situation for the industry. For case studies of exactly how operations in Greenland play out, take a look at our relevant featured companies this issue. You will not be disappointed.

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