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Oil & Minerals

Optimism before the storm

Greenland has no operational mines at the moment. That is set to change rather quickly
Oil & Minerals
Sitting on a ruby mine (Photo: Naalakkersuisut)

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Múte Bourup Egede, Greenland’s mining minister, is optimistic about the industry’s future. More than just a case of political optimism, he runs down a list of mining projects ready to come on-line in the coming years.

“We’ve got a pair of projects we expect to start this year,” he says, referring to a planned ruby mine and an anorthosite (used in fibreglass) mine. A third project, a zinc and lead mine, need only submit finalised plans for operation and how it will be wound down, before it can start construction, “possibly in 2018”, Mr Egede says.

With several other projects due to seek final approval to begin operation in the coming years, and with strong prices for commodities across the board in 2016, Mr Egede believes this is a sign that investment levels will rise.

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The operation that will put Greenland back in the league of active mining countries is the Aappaluttoq ruby mine, near Nuuk, the capital, It will be operated by the Greenlandic subsidiary of LNS, a Norwegian firm, which overtook the operation last year after the previous owner went bankrupt. LNS now says it only needs to make final adjustments to before the first gemstones can be produced.

Later this year, it should be Hudson Resources’ turn to begin operation. The Canada-based firm is currently building what will become an anorthosite mine at Naajat, on the south-western coast. Though a combination of investments and loans from the European Investment Bank, an EU institution, and Cordiant Capital, a Canadian firm, Hudson has secured the C$40 million ($30 million) it estimates will be necessary to establish, operate and wind down the mine.

Importantly, Hudson has a 10-year purchase agreement with Owens Corning, a US manufacturer. The first deliveries are due later this year, and James Tuer, the Hudson’s managing director, believes the mine will be able to deliver on time.

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

Next in the queue of possible mine openings is a zinc and lead operation on Citronen Fjord, on the northern coast. Under the terms of the approval granted to Ironbark, an Australian firm, in December, operations must begin by 2021. Mr Egede reckons this could happen much sooner; the only part of the application process that has yet to be completed is the submission of plans for production and winding down the operation.

“The project is moving forward,” he says.

Should the mine open, it will become one of the world’s largest zinc mines, and, with good prices for zinc right now, sufficient financing, a feasibility study and a 30-year licence in hand, the firm is up-beat about its prospects.

Ironbark’s outlook for Citronen is one that is shared by everyone in the industry, however. Writing last month for Mining Journal, a website, John Robertson, an Australian investment strategist, suggested the mine had based its projections on out-dated data. Mr Robertson also questioned whether Ironbark would be able to meet the requirements set out by a Chinese bank that will invest in the project, and whether its expectations for zinc prices was reasonable.

SEE RELATED: That which is not named

The next project Mr Egede believes has the potential to begin operation soon is the Moriussaq titanium mine, in the northern part of the country. Although FinnAust, the firm developing the project, holds only a prospecting licence, the project is mature enough that it could quickly be approved for production, Mr Egede says.

Two other firms, Tanbreez and GME, which are both seeking to operate rare-earths mines in the southern part of the country, may also receive decisions this year on their applications to begin operation.

Tanbreez, which last year criticised approval authorities of botching the licencing process, has submitted supplementary information to support its application after being rejected in 2015.

GME, a controversial project because it will also involve mining uranium, to the unease of some residents of a nearby town, is said to be close to submitting its final application, but according to Mr Egede, it has yet to indicate when this will happen.

A version of this article originally ran in the February 24 edition of  Sermitsiaq, a Greenlandic weekly published by this website's parent company.