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REGIONAL JOURNALISM, GLOBAL PERSPECTIVE.

Oil & Minerals
Mining

Cash-22

Greenland’s Aappaluttoq ruby mine is ready to begin operations once its owner can raise the funding needed to pay its workers
Oil & Minerals
Parked at a ruby red light (Photo: Naalakkersuisut)

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Greenland has been without an active mine since 2013, when the Nalunaq gold mine was shuttered after becoming unprofitable. That was all set to change in April, but a lack of funding has now pushed back the opening date for the Aappaluttoq ruby mine until later this month at the earliest.

Construction of the mine, including roads, employee housing and other facilities wound up earlier this year, and the firm also reports having conducted enough blasting to begin processing once installation of processing equipment is complete.

True North obtained permission to begin operations in May 2014. Since then, it has been building infrastructure on the site and setting up a facility in Nuuk, where rough gemstones will be sent for further processing.  

SEE RELATED: “Not enough” minerals in Greenland to fund independence: report

In order for all that to happen, however, the firm must secure a final $12 million necessary for paying operational costs, including wages for miners.  

Without any gemstones to sell, according Bent Olsvig, the managing director of True North Greenland, the local subsidiary, the firm has been unable to raise cash.

“We need a way to finance our operations here and now. Before that happens, we can’t get started,” he said.

LNS, a Norway-based construction firm hired to build the mine’s infrastructure, is using the delay to make some final upgrades to the site, including ensuring that the on-site processing plant functions properly.

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For LNS, working in the summer provides easier, and thus cheaper, working conditions. Mr Olsvig, on the other hand, admits that the delay means a shorter summer mining season, but notes that in the current economy, obtaining funding can be a difficult prospect.

True North has reportedly been negotiating with an unnamed investor for several months. Should the two not be able to obtain the full amount of funding it needs, it is prepared to go ahead with a scaled-down operation.

This article was originally published in AG, a Greenlandic newspaper that is owned by this website’s parent company.