Mother lode or natural disaster waiting to happen?

Greenland’s economic future lies underground, but environmentalists fear the country’s mineral resources are as much a curse as a blessing

With climate change opening up a new frontier for oil and mineral exploration in the Arctic, Greenland has taken centre stage in an emerging debate over newly exposed land and the environmental consequences of mining.

New data shows that Arctic sea ice is receding dramatically and thinning to new extremes during the summer months. This opens up huge swaths of land that were not able to be prospected until now.

Both at sea – studies by US geologists show that Greenland could be sitting twice as much oil as America’s remaining reserves – and on land Greenland is proving to be a treasure trove of raw materials. Coal, iron ore, lead, zinc, gold, and diamonds are just the tip of the iceberg in what could be lying underneath Greenland’s surface.

Rare earth metals such as cerium, terbium and ytterbium, metals that are used in electronic devices, could give Scandinavia an edge over an industry that is dominated so far by China. Greenland’s rare earth deposits add a geo-political twist to the debate, as countries of the West are looking secure other sources of mineral.

In addition to brining in much needed income for Greenland, a self-governing Danish territory that receives 3 billion kroner annually from Copenhagen, the benefits of the country’s emerging mining industry includes “job training, availability of higher education, involvement of local labourers and local companies,” said Martin Christiansen, a spokesperson for Greenland’s Self-Rule Authority.

But the new land has not only attracted mining and drilling, environmentalists have also expressed worry about what potential projects could do to the Arctic environment.

Jon Burgwald, an Arctic campaigner for Greenpeace, is especially worried about dangerous chemicals being discharged into the environment. These are chemicals that, while not banned, could cause cancer or genetic mutations, and could affect local water supplies and wildlife. According to Burgwald, one year of discharge in Greenland exceeded one year of chemical discharge in Denmark and Norway combined.

Last month, those fears again emerged when it was reported that Danish authorities had criticised Cairn Energy, an oil explorer, for releasing higher-than-expected levels of a chemical used to aid drilling.

But while oil drilling has been the most visible raw material activity in Greenland thus far, Burgwald’s focus has been on a planned aluminium smelter, planned to open within the next two years on Maniitsoq island.

Greenland’s population is less than 60,000, and Burgwald says he’s worried that companies like Alcoa, the world’s largest aluminium producer, and oil companies Shell and ExxonMobil will be far too big and far too savvy for Greenland’s government to deal with on a fair footing.

Burgwald compared the scale of mining projects in Greenland to the construction of 70 bridges from Copenhagen to Malmö – which took a decade to build. These projects, he said, demand more people, which is why the companies behind them may be trying to get by with reduced environmental standards.

“The Bureau of Minerals and Petroleum is not putting forward the control mechanisms and the systems which are needed to control the large companies coming to Greenland,” Burgwald said.

Burgwald may not believe that Greenland is ready for oil drilling or mining, but the country’s government feels differently.

“Activities in Greenland are regulated in accordance with some of the strictest environmental regulations in the world,” Christiansen said, “The authorities conduct comprehensive inspections of the activities to verify they are carried out are in accordance with the best international practice.”

Environmental guidelines have been laid out with the help of the Danish Centre for Environment and Energy (DCE) a research institute at the University of Aarhus. Greenland’s mining activities are also regulated by Denmark’s Mineral Act, which was passed in December of 2009. Environmental protection is stressed by the act, as is protection of health and safety.

Christiansen stressed that any kind of environmental group has the opportunity to the environmental impact assessment. Burgwald indeed has seen a positive reaction from Greenlandic authorities when he makes demands, such as forcing it make public its oil spill response plan, which Greenland released in August of 2011.

With Greenland unlikely to turn away from its only viable source of income, that type of willingness to acknowledge the objections of environmental groups, could prove decisive for bridging the gap between development and conservation.

Correction: We intially wrote that Cairn Energy had "dumped well above the legal limit of a red-listed chemical used to help it drill offshore test wells". This is not the case, as there was no limit set on the amount of the chemical the company was permitted to release. We regret the error.