Greenland under pressure from all sides

Australian company threatens to pull out over ban on uranium mines, while South Korean investors plan visit and DF’s new leader questions the Denmark-Greenland relationship

Australian company Greenland Minerals and Energy (GME) is set to deliver an ultimatum to Greenland’s leaders: Drop the ban on uranium mining or lose our planned 15–17 million kroner investment in an uranium mine in southern Greenland.

Berlingske Business reported that the gauntlet was thrown down in a brief prepared by GME prior to meetings scheduled next week between company leaders and Greenland’s prime minister, Kuupik Kleist.

The ultimatum comes after GME has spent some 450 million kroner in the past five years on a successful exploration of the Greenlandic underground near the southern city of Narsaq. The company says it has discovered the largest deposit of rare earth minerals outside of China. The series of minerals are vital to modern devices from cell phones to satellite systems. The company is being funded by South Korean investors who are willing to invest 15-17 billion dollars in the uranium mine, which has the potential to create 600-800 permanent, year-round jobs in an area hard hit by unemployment. The uranium mine would also contribute one billion kroner in annual revenues for Greenland's national treasury.

Pressure on the Greenlandic government will be coming from several quarters in the coming weeks. South Korean president Lee Myung-Bak will make an official visit to Greenland at the beginning of September and the Korean money men are expected to travel to Nuuk and Narsaq a few weeks after the presidential visit to inspect their potential investment.

Funding for the mine is slated to come from a South Korean investor group consisting of four giant conglomerates including automotive and marine manufacturer Hyundai, an unnamed private investor and two state-run companies, including the South Korean counterpart to the Danish energy company DONG Energy.

It is a safe bet that the company will point out during next week's meetings that Greenland has already shown some willingness towards lifting the ban on uranium mining by granting exemptions allowing exploration activities in the uranium-containing areas.

The current Chinese monopoly on rare earths has inspired the start up of a rash of new mining projects around the world that investors can put their cash into if things get too complicated in Greenland.

Kleist has said on several occasions that his government will only consider lifting the uranium mining ban when or if there is a specific application, so the logical step for the mining company would appear to be to submit an application for mining.

Mining applications typically run into thousands of pages and are expensive to produce, so Greenland mining will probably be looking for some assurances during the upcoming meetings that an application will be favourably received.

Meanwhile, Kristian Thulesen Dahl, the incoming leader of  Dansk Folkeparti (DF) says that he wants to hold talks with prime minister Helle Thorning-Schmidt (Socialdemokraterne) concerning Denmark’s relationship with Greenland. The inspiration for Dahl’s request was a recent climate deal between the two countries. Dahl expressed concern that the deal seems to favour Greenland and said that there was not enough discussion before it was signed.