ETM appeals to arbitration court in Denmark, citing economic importance.
So far, fishing has been Greenland’s most important economic factor besides the state subsidy from the mother country Denmark. In the future, the country’s vast mineral resources – including rare earths – could become a significant source of revenue. But with the change of government in 2021, strict rules were imposed on the mining industry, which meant the end of planned rare earth mining in Kvanefjeld, in the south of the island.
The new guidelines prohibit the development of deposits containing a certain concentration of the radioactive element uranium. Australian mining company Energy Transition Minerals (ETM) has been exploring the Kvanefjeld deposit for years, but commercial mining is prohibited. The Greenland government announced its final decision in June of this year. But ETM is not satisfied with this and is now turning to an arbitration court in Copenhagen (PDF) to confirm its right to a mining license. For the time being, ETM says it is not seeking damages, but in its statement of claim, the company puts the damage it has suffered so far as a result of the lack of a permit at US$7.5 billion, plus an additional four billion in advance interest under Danish law.
Not only for ETM, but also for Greenland much is at stake, almost 23 billion in revenues would be lost to the country if the project does not go ahead, according to the company’s calculations. In addition, there would be numerous jobs and infrastructure that ETM could create locally.
Greenland has great raw material potential
ETM had already sought arbitration in Copenhagen in March of last year, a move that the Greenlandic government considered an affront to its own people. To promote Kvanefjeld and gain support, a delegation of high-ranking ETM managers visited Greenland earlier this month and met with the relevant minister and other political and business representatives. ETM Managing Director Daniel Mamadou expressed “unwavering confidence” in the cause of his company, which has been investing in resource extraction in Greenland for 14 years now.
So while Kvanefjeld has yet to help make Europe’s rare earth supply chains less dependent on China, work is underway further northwest to develop the Sarfartoq deposit. The neodymium- and praseodymium-rich deposit is being explored by Canadian company Neo Performance Materials and, according to consulting geologist Don Hains, contains no radioactive associated minerals of concern. The material mined there in the future could then be further processed in Estonia, where Neo operates appropriate facilities and is currently also building a factory for magnets made from these materials.