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Mineral riches at stake in Greenland vote

Monday - 3/11/2013, 8:36am  ET

FILE - In this Dec. 19, 2009 file photo, people inside the gold mine in Nulanaq mountain Greenland. Greenland’s underground wealth is at the forefront of the Arctic island’s parliamentary election on Tuesday, March 12, 2013 amid worries over a potential influx of Chinese labor and the environmental consequences of mining. (AP Photo/Polfoto, Joachim Adrian, File) DENMARK OUT

JAN M. OLSEN
Associated Press

COPENHAGEN (AP) -- Greenland's underground wealth is at the forefront of the Arctic island's parliamentary election on Tuesday amid worries over a potential influx of Chinese labor and the environmental consequences of mining.

Once an isolated outpost of human civilization, ice-capped Greenland has grabbed global attention recently for being at the front line of climate change. Scientists are studying the melting of its massive ice sheet, which covers 80 percent of the island, and its impact on raising global sea levels -- one of the great unknowns of the climate puzzle.

Meanwhile, miners prepare to dig for iron, rare earths and other metals as warming temperatures make them more accessible.

All major parties in the 31-seat Parliament favor exploiting some of the untapped natural resources as a way to reduce Greenland's dependence on former colonial master Denmark and pave the way toward full independence.

But at what cost to the pristine environment and the traditional Inuit way of life?

The opposition Siumut party has accused Premier Kuupik Kleist of moving too fast, saying he rushed through a law in December to allow large mining projects to import labor from abroad, including China.

While a majority of Greenland's 57,000 residents are concentrated in a few small cities on the west coast, others live in remote coastal settlements where life revolves around fishing and hunting of seals and whales. Few have the skills required to work in the mining industry.

"People must be allowed to ask questions: What could the creation of a mine and the arrival of some 3,000 Chinese workers mean to me as an inhabitant of a hamlet? What will it mean to me and my hunting grounds?" Siumut leader Aleqa Hammond told The Associated Press.

Britain-based London Mining is seeking Chinese investments -- which would likely also mean Chinese workers -- for an iron mine 100 miles (160 kilometers) northeast of Nuuk, the capital. The company expects to extract 15 million tons of iron ore annually for at least 15 years.

Outsiders, including the European Union, are concerned that China is eyeing investments in Greenland as a way to gain a toehold in the resource-rich Arctic region.

Kleist, 54, said earlier this year that Greenland, which isn't an EU member, is "open for investments from the whole world," as long as investors follow local laws and regulations. Greenland officials traveled to both China and South Korea last year and Kleist also met with South Korea's president in Greenland.

Australian mining company Greenland Minerals and Energy Ltd. says it's in talks with potential investors from South Korea and elsewhere to develop a rare earths mine near Narsaq, on Greenland's southern tip. Rare earth elements are key ingredients in smartphones, weapons systems and other modern technologies.

The company says it's the biggest rare-earths deposit outside China, which accounts for more than 90 percent of global production, but the deposit can't be exploited unless Greenland lifts its ban on mining for radioactive elements, because the ore also contains uranium.

While other parties are ready to drop the ban, Kleist's governing Inuit Ataqatigiit party, or IA, wants to keep it -- at least until the environmental consequences of uranium mining have been thoroughly assessed.

"No matter how 'well behaved' a mining company is, it cannot take away the fact that the tailings from radioactive materials linger in nature for hundreds of thousands of years and the problem with the leftover materials from the usage of uranium has not been solved," IA lawmaker Naaja Nathanielsen said in an email.

A decision on whether to lift the ban, which would also require a vote in Denmark's Parliament, is expected this year or next.

A poll commissioned by the Sermitsiaq newspaper last week showed the election is too close to call. The poll of 800 people by HS Analyse found Kleist's left-leaning IA remained Greenland's largest party with more than 40 percent support. But its two coalition allies had lost backing, leaving it unclear whether the three parties together can retain a majority in Parliament.

Greenland's autonomy was expanded four years ago, giving the local government control over the island's natural resources. As part of that deal, Denmark will gradually reduce its 3.3 billion kroner ($576 million) annual subsidy once Greenland starts making profits from resource extraction. Right now the subsidy accounts for about two-thirds of Greenland's economy.

Offshore drilling in Greenlandic waters has so far not revealed any commercial quantities of oil and gas, so the self-rule government has placed its hopes on mining in the short term.

John Mair, executive director of Greenland Minerals and Energy, said political support for the company's rare earths plans is growing, but added that "clarity on regulation" is needed to go forward in Greenland. "Otherwise the investment tends to move to jurisdictions where there is a clearer path."

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Karl Ritter reported from Stockholm.


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