Welcome to Over the Circle (OtC), a site dedicated to news, politics and foreign policy in the Arctic region. With the ongoing changes in the circumpolar north due to climate change and ice erosion, the region has become the focus of much greater attention on a global scale, and as a result the politics of the Arctic are also undergoing rapid changes. This site will look at the politics of the ‘Arctic Eight’ (Canada, Denmark [Faroe Islands / Greenland] Finland, Iceland, Norway, Sweden, Russia and the United States), but also of non-Arctic states, including in Western Europe and East Asia, which are also quickly developing their own Arctic diplomacy policies.
Among the major topics in Arctic politics are economic development, environmental concerns, energy (oil and gas), shipping and new Arctic sea routes, and new and existing regional organisations, (like the Arctic Council). While there is much discussion about the opening of the Arctic, this site will examine regional and international news with an eye to examining just what this ‘opening’ really entails.
Although a Chinese firm was unsuccessful in its bid for a contract to expand airports in Greenland, it is unlikely that China will be losing interest in developing economic partnerships with the island at any time soon. Mining joint ventures in Greenland, including at Kvanefjeld, continue to take shape, for example. However, Beijing’s economic diplomacy in Greenland has not only caught the attention of Denmark, but also the United States, which is now seeking to update its diplomatic representation on the island and also potentially contribute to the diversification of the Greenlandic economy.
Is Greenland shaping up to be a new arena for competition between China and the United States? This is the subject of a new article published in The Diplomat this week by OtC writers and editors Marc Lanteigne and Mingming Shi.
This month, another front in the widening ‘trade war’ between China and the United States was threatening to open over the possibility of exports of rare earth elements (REEs) being subject to an embargo by Chinese authorities. The potential effects on many current and emerging high technologies, including environmental (or ‘green’) technology applications, could be profound. As a vast majority of rare earth elements, (稀土金属 xitu jinshu), are extracted from and sold by China, debates about developing alternative sources of REEs are again taking place, with Arctic regions now receiving intense scrutiny.
The term ‘rare earth elements’ is used to describe seventeen chemical elements on the periodic table which have become essential for the creation of cutting-edge technologies including modern batteries, computers, engines, fibre-optics, lasers, magnets, monitors, and phosphors. Some REEs are also necessary for the development of more energy-efficient and environmentally-friendly technologies, such as electric vehicles, wind power turbines and solar panels. REEs also have military applications, such as in guidance systems, jet engines and night vision equipment.
These elements are not ‘rare’ in terms of abundance, (or lack thereof), but rather in regards to the complexities and environmental concerns involved in mining them. One REE, however, promethium, used for research purposes but also atomic batteries and luminous paints, is uncommon since it only exists as a by-product of uranium fission and not in nature. Many REEs are widely distributed, thus often requiring a comparatively high amount of land used for extraction and result in greater risks of long-term damage to the environment as compared with other extractive industries. The potential environmental costs have made the prospect of rare earth mining unpalatable to many governments. For example, there have been protests and political pushback in Malaysia over rare earth mining there, including by the Australian firm Lynas, due to concerns about land and water pollution from radioactive waste products.
REEs are also time- and labour-intensive to mine and then process, especially since different types of rare earths are often found grouped together, necessitating further steps to separate them. Moreover, as they are a finite resource, concerns have been raised over whether supplies can continue to meet demand, especially as calls for ‘green’ alternative energy sources grow louder.
Rare earths have been found, and in some cases mined, in many countries in different parts of the world, including in Australia, Brazil, Canada, India, Myanmar (Burma), South Africa, the United States and Vietnam. However, China currently represents over eighty percent of rare earth exports to global markets, due to its extensive mining operations which have been developed over decades [pdf], both in southern provinces such as Fujian, Guangdong, Guangxi, Jiangxi and Sichuan, and as well as in the northern regions of Nei Mongol (Inner Mongolia), notably the Bayan Obo Mining District (白云鄂博矿区).
As explained in the comprehensive 2018 book China and the Geopolitics of Rare Earths, since the discovery of rare earths at Bayan Obo in 1927, the government of China moved to fully develop those resources at the site and in other parts of the country, with REEs being designated as a strategic (and protected) resource by the then-Deng Xiaoping government in 1990. This led to the industry being placed under stronger central government oversights, and restricted entry of foreign firms into the sector. Once China began to dominate the REE market, the country developed the ability to greatly influence prices and discourage competition, since the 1990s.
Over the past decade, the perception of Beijing’s near-monopoly on REEs has raised economic security concerns even before the current Sino-American trade war began to accelerate last year. This month, hints began to appear by the Xi Jinping government in China that the country may seek to restrict Chinese REE exports as economic relations between Beijing and Washington continue to sour.
Last week, President Xi visited[paywall] an REE firm, JL Mag Rare-Earth, in Jiangxi Province, along with chief Chinese trade negotiator and Vice-Premier Liu He. The visit implied that Beijing was considering using a ‘nuclear option’ of restricting REE trade with the United States, either directly or more subtly by diverting rare earth supplies for use by Chinese domestic industries. It was during his Jiangxi visit that President Xi suggested China needed to prepare for a new ‘Long March’ in the face of ongoing US trade pressures. One editorial in China’s conservative Global Times news services noted that rare earths could be an ‘ace’ for Beijing in the trade dispute, and a prominent professor at Renmin University in Beijing, Jin Canrong, went even further by suggesting that rare earth trade with the United States be banned altogether.
The result of these veiled threats has produced stock market jitters and an uptick in the stock prices of rare earth firms. This was not the first time Beijing’s dominant position in REEs has been used for economic leverage. In 2010, during a period of tensions between China and Japan over the detaining of a Chinese fishing vessel in near the disputed Diaoyu / Senkaku Islands in the East China Sea by the Japanese Coast Guard, shipments of Chinese REEs to Japan were temporarily halted, illustrating the vulnerability of Japanese industries to rare earth supply shocks. Since that incident, Beijing sought to more tightly control and restrict rare earth exports, claiming concerns about the longevity of its current REEs supplies, but in March 2014 Beijing lost a legal case brought against it by the United States to the World Trade Organisation, as Washington successfully argued that such restraints were in violation of WTO rules.
The possibility of REEs being caught up in global trade disputes and rising economic barriers may provide an interesting opportunity for the Arctic, especially Greenland but also potentially for other far northern regions where rare earth supplies have either been found or expected to exist. The prospect of opening up mining in Greenland has become more attractive due to both the plentiful supplies of base and precious metals (including REEs), as well as gemstones, which have become more accessible due to climate change and more specifically due to the erosion of both land and sea ice. According to statistics [pdf] from the Greenland government, REEs are seen as being extractable in several sites along the island’s coast, including at Kap Simpson, Qaqarssuk and Sarfartoq.
However, by far the most visible potential rare earth mining project in Greenland has been at Kvanefjeld (Kuannersuit), near the town of Narsaq in southern Greenland. The site holds stocks of uranium and zinc as well as rare earths, notably [pdf] dysprosium (used for hard drives, lasers and magnets), neodymium (capacitors, electric motors, magnets), praseodymium (lasers, magnets and carbon arc lamps), and terbium (magnets, lasers, phosphors). The project is currently overseen by Subiaco, Australia-based Greenland Minerals, in partnership with Shenghe Resources headquartered in Chengdu, China.
As in other parts of the world, the possibility of expanded mining in Greenland has raised environmental debates there, including in the case of the Kvanefjeld site. It remains unclear when this mine may commence operations, and there is the greater question of whether Greenland will become a cornerstone source of REEs given the still-dominant position of China, as well as potential competition from other parts of the world.
Another area of the Arctic appeared poised to become a prospective source of rare earth this month in the wake of an announcement that an agreement had been reached between Inuit groups in the far-northern Québec region of Nunavik and mining interests, including Commerce Resources of Vancouver, which may open the door to the founding of Canada’s first rare earths mine at Ashram, located about 130 kilometres south of the town of Kuujjuaq. The Ashram site was studied as being a source of numerous types of REEs with cerium (used for catalysts and oxidising agents), lanthanum (specialised glass and hydrogen storage), and neodymium predominating [pdf]. The project, should it come to fruition, may form a major part of the ongoing ‘Plan Nord’ development plans by the Québec provincial government.
Rare earth extraction in Greenland, Canada and other parts of the Arctic will depend significantly not only upon emerging market demands but also the costs and time involved in developing these resources and the successful addressing of questions about environmental risks of such mining in regions which are highly sensitive to pollution and other similar damage. Nonetheless, as REEs continue to increase in global demand, and with the possibility of rare earths being caught up in an increasingly unpredictable great power trade conflict, the far north may be more commonly viewed as an emerging alternative source for what has been called the ‘vitamins’ of the modern socio-economic system.
In the past few months, the topic of Arctic security has become more visible in the wake of American debates about increased Russian and Chinese economic and strategic activities in the circumpolar north. After a difficult Ministerial meeting of the Arctic Council this month in Rovaniemi, splits in the organisation over the challenge of climate change and the prospect of the militarisation of the Arctic have been pushed to the forefront of regional discourse. Yet where does the region go from here? What are are the challenges the Arctic will now face not only in terms of geopolitics but also on the level of communities and individuals?
A new podcast, as part of the Opinion Peace series published by the Centre for Peace Studies (CPS) at UiT: The Arctic University of Norway, in Tromsø, examines these questions. The podcast was hosted by Benjamin Schaller (Ph.D. Candidate and Research Fellow at CPS). The discussants were Gunhild Hoogensen Gjørv (Professor, Centre for Peace Studies), Rasmus Gjedssø Bertelsen (Professor and Barents Chair in Politics at the Department of Social Sciences) and Marc Lanteigne (Associate Professor in Political Science, and editor of OtC) who all spoke about different approaches to Arctic security as well the potential for hardening political stances within the Arctic Council.
Last week’s Arctic Council Ministerial meeting in Rovaniemi, Finland, which marked the end of Finland’s tenure as chair of the organisation, will likely be remembered for the words and actions by the US delegation led by Secretary of State Mike Pompeo. In the aftermath of his controversial speech, and his refusal to support language mentioning climate change in the meeting’s documentation, resulting in the Ministerial concluding without a formal declaration for the first time in its history, there is now the question of whether the United States would be pursuing a policy of isolationism within the Council.
As part of his northern European tour, Mr Pompeo was also expected to travel to Nuuk in order to announce new American diplomatic initiatives there, but an eleventh hour announcement indicated the trip was postponed indefinitely, and the secretary instead returned to Washington. It was however announced by Washington that the State Department did intend to re-establish a ‘presence’ in Greenland. The US had opened a consulate in Nuuk (then Godthåb) in May 1940 when Denmark fell under Nazi German occupation. However, the consulate was shuttered in 1953, after Greenland’s status as a Danish colony was removed with the island becoming a constituency within the Kingdom of Denmark along with the Faroe Islands. Greenland opened a representative office in Washington in September 2014 as part of the island’s widening foreign policy interests.
With the closing of the Ministerial, the chair of the Arctic Council has passed to Iceland, which will oversee the organisation under the leadership of Iceland’s Foreign Minister, Guðlaugur Þór Þórðarson, until 2021. At the conclusion of the Rovaniemi meetings, the government of Iceland released its first policy paper outlining its upcoming work with the Council, as well as the main theme of Iceland’s tenure as Council chair, namely regional sustainable development. This concept would be joined by four regional priorities, namely understanding and protecting the marine environment, including in the wake of dangers from plastic pollution, addressing regional climate change and seeking ‘green solutions’, promoting the wellbeing of the four million citizens living in the Arctic, and strengthening cooperation within the Arctic Council.
Related to this plan, Iceland confirmed its support for the closer alignment of the Arctic Council and the Arctic Economic Council (AEC) to promote ‘responsible economic development’. On 6 May, the AEC, created five years ago to facilitate business links with the Arctic, signed a memorandum of understanding with the Arctic Council to further that cooperation.
In his speech at the Ministerial, Mr Þórðarson pointed to the need to continue to develop the Arctic while acknowledging the serious challenges posed by climate change and ice erosion, also noting that while the 2015 Paris climate agreement was a positive step, the deal would not be enough to curtail global warming for many future decades. He also added that the Arctic Council mandate did not include military security, and instead focused on creating a forum for ‘dialogue and peaceful cooperation’ in the region.
This year saw no new non-Arctic governments added to the list of Council observers, after Switzerland was the lone candidate added in 2017, but one intergovernmental organisation, the International Maritime Organisation (IMO), was granted observer status this year. The IMO was created in 1948 as a specialised agency of the United Nations, and is responsible for the regulation of maritime safety and legal affairs. The IMO is also responsible for the development of the Polar Code, regulating safe and responsible civilian maritime traffic in the waters of the Arctic and off Antarctica, which came into effect in January 2017.
Meanwhile, the political fallout from the Pompeo speech has led other Arctic actors to treat the situation as metaphorical road damage to be bypassed. Other members of the Council confirmed that they would be pressing on with climate change policies in the Arctic, and Iceland’s opening policy statements further confirm that position. The Inuit Circumpolar Council (ICC), one of the permanent participants in the Arctic Council, strongly criticised the United States for blocking the release of a formal declaration from the ministerial which included the challenges of climate change, accusing the US of a lack of leadership in the region and of ‘moral failure’. However, the US State Department attempted to put a more positive spin on the meeting, with one representative praising a ‘very, very, positive outcome’ at the event despite, to phrase it mildly, contrasting views from the other Arctic Council principals.
As well, Canadian Foreign Minister Chrystia Freeland rejected Mr Pompeo’s assertion that Canadian claims to the Northwest Passage as internal waters were ‘illegitimate’, stating that ‘Canada is very clear about the Northwest Passage being Canadian,’ based on both history and geography. However, the matter appears to be far from resolved, given plans in Washington for the US Navy to conduct a freedom of navigation operation (FONOP) in the Northwest Passage, although it was unclear what vessel could be used for that operation given the few ice-capable vessels the United States currently owns. Should that take place, it would be seen as a direct challenge to Canadian sovereignty and an assertion of a US right of passage.
As an Arctic policy specialist recently argued, for the US to rush into a FONOP in the polar regions would be ‘unwise’, given the still difficult-to-predict ice and weather patterns in the region, coupled with the poor condition of the United States’ few functioning icebreakers, as well as the risk of further irritating US-Canada relations. Ties between Ottawa and Washington have already cooled considerably since US President Donald Trump came to power, including over economic issues such as the recent renegotiation of the North American Free Trade Agreement (NAFTA), and the sometimes-brittle relationship between Trump and Canadian Prime Minister Justin Trudeau.
China, which was singled out in Mr Pompeo’s remarks for challenging the Arctic regional order and seeking to develop a greater role in regional decision-making, was dismissive of US criticism, with a representative of the Chinese foreign ministry pointing to Beijing’s ongoing support of the Paris agreement, (to which the US is no longer adhering), and interest in cooperating with Arctic actors to further research climate change and its effects. US views that China should have a limited presence in the region were further challenged this week with the opening of the Arctic Circle Forum in Shanghai, the first such event to be held in China, and a showcase for the country’s expanding Arctic agenda. Among the topics of the forum were educational cooperation, environmental studies, indigenous communities, tourism and the development of an ‘Ice Silk Road’ (Bingshang Sichouzhilu 冰上丝绸之路).
The Shanghai gathering also provided a useful venue for Arctic governments to confirm their interest in better engaging China in the Arctic and in expressing disagreement with the US policies expressed at the ministerial. Andrew Leslie, a member of the Canadian parliament representing the governing Liberal Party, stated in remarks during the forum that despite a cooling of Sino-Canadian relations since December of last year due to the Meng Wanzhou affair, Ottawa was hopeful the Arctic could open up new paths to bilateral cooperation.
During the meetings, Mr Wang Hong of the Ministry of Natural Resources – State Oceanic Administration section, called for joint scientific expeditions to the North Pole as well as combined efforts to further strengthen [In Chinese] the Ice Silk Road as a ‘blue partnership’ (lanse huoban guanxi 蓝色伙伴关系) with other Arctic states for the benefit of the region as a whole. As well, a director with China Shipping and Sinopec Suppliers Co., Mr Cai Meijian, recommended the creation of an ‘Arctic Integrated Governance Law’ which would further augment Arctic Ocean safety and security. These statements add further weight to the idea of China becoming more comfortable with the project of building adjacent, or potentially even alternative regimes in the Arctic, a point which was alluded to back in 2015 when then-Chinese Vice-Foreign Minister Zhang Ming recommended the creation of a ‘multi-tiered Arctic cooperation framework for win-win results’ in the region.
This past week has been a heady one for Arctic affairs, but one initial conclusion which can be drawn is that there have been significant shifts appearing in the region, both in terms of policy priorities and distribution of power. Despite apparent American attempts to move these processes backward, Arctic politics are changing, whether Washington is ready or not.