When the current government in Greenland was formed after the elections this past April, sweeping promises were made by the largest party in the coalition, the centre-left Inuit Ataqatigiit (IA) [in Danish], to improve the country’s environmental policies. By far the most visible, and debated, of these decisions was a promise to cancel [in Danish] the long-planned rare earth elements and uranium mining project at Kuannersuit (Kvanefjeld). Despite moves by the primary firm behind the project, Australia’s Greenland Minerals, to push for a compromise, there is little sign thus far that the plans will go forward in the near term.
IA, under the leadership of Prime Minister Múte B. Egede, has insisted that the coalition government’s issues with the Kuannersuit project were with the threat of local pollution and radioactive by-products, not the mining sector per se. However, as a recent article in The Polar Connection explained, any mining activity produces a certain degree of radioactivity, and so now there is a question of whether a limit may have to be decided on. Another factor is interest in Greenlandic rare earths being unlikely to subside, given recent concerns about their growing strategic value [pdf]. This month, Nuuk agreed to join the European Raw Materials Alliance, reflecting Greenland’s value as an alternative source for strategic metal and mineral resources.
Two mines in Greenland are now in operation, with one extracting anorthosite, and the other rubies. Other similar projects, such as a planned zinc mine at Citronen Fjord [in Danish] in Greenland’s far north, have also not been opposed by the government. This week, another potential mining operation showed signs of moving forward when the Australian firm Conico announced that a sampling survey at its site at Ryberg, in the Kangerlussuaq Basin of eastern Greenland, showed promising signs of both base metal and gold deposits.
This month, it was also reported that the Greenlandic government was introducing legislation which would forbid the mining and export of uranium, de facto reinstating the 1988 ‘zero-tolerance’ policy on uranium extraction which had been overturned in 2013 to allow the Kuannersuit mine to go forward. At that time, that project was seen as a potential vanguard for the expansion of the country’s mining sector which would allow the greater diversification of the economy away from a heavy reliance on the fishing industry and the annual stipend, now representing about one-fifth of the Greenlandic gross national product (GNP), supplied by Denmark.
In a move seen as further burnishing the Greenland government’s environmental credentials, the Egede government made preparations in June this year to suspend indefinitely any future offshore oil exploration, with the argument that the country should instead work towards developing sustainable energy alternatives. This may include hydroelectric power, which has long been viewed as a potentially lucrative clean energy source for the country.
Although there has yet to be any oil drilling in Greenland, plans had been mooted in 2018 by the previous government of PM Kielsen to open up hydrocarbon exploration blocks in the Disko Island / Qeqertarsuaq and Nuussuaq Peninsula regions. At that time, international firms, including PetroChina and the China National Offshore Oil Corp. (CNOOC), were expressing interest [in Chinese] in potential investment. As well, there are four oil surveys in Greenland which remain ongoing, overseen by two companies, Britain’s Greenland Gas & Oil (GGO) and Greenland’s own national firm, NunaOil A/S.
This move by Prime Minister Egede’s administration is a sharp contrast to the oil policies of its immediate predecessors. Kuupik Klelst, who also represented IA, was in office during 2009-13, However, unlike PM Egede, Kleist’s position [pdf] on extraction of oil was far more accepting. His successor, Aleqa Hammond, oversaw a government which was very pro-independence in its leanings, and she viewed raw materials development as key to achieving swifter Greenlandic economic autonomy. For example, at the 2014 Arctic Summit, hosted in London by the Economist, PM Hammond emphasised that ‘we are a frontier mineral and oil nation’ [pdf], and called for more extensive international awareness of natural resource-based sectors of the nation and further foreign investment in this industry.
Although the subsequent government of Kim Kielsen was more cautious on the subject of independence, arguing that the timetable needed to be constructed in order to ensure that Greenland could be economically sustainable as an independent state, he was also upbeat about the role which extractive industries could play in modernising the country’s economy. As he stressed in 2016, ‘As yet we’re not aware of the mineral potential, how extensive it is. We will not find this out until we have turned the last stone,’. In early 2020, his government released a five-year economic strategy which included the aspiration to develop Greenland as a hub for international petroleum firms, despite deflated prices during the previous five years.
These plans appear now to be in full reverse. In a presentation, entitled ‘Greenland in the Arctic: Launch of a new Arctic Circle Mission Council’, in June this year as part of the Arctic Circle Virtual lecture series, Pele Broberg, Minister for Industry, Trade, Foreign Affairs and Climate, detailed [video] his government’s interests in developing an array of environmentally responsible policies, including having Greenland join the Paris climate accords, and to move the country’s energy base from fossil fuels to sustainable alternatives, including hydrogen and hydroelectricity, stressing that economic development and green policies could be pursued simultaneously.
However, there is the question of what the moratorium on oil development will mean for the country’s economy and independence plans, given that they are contingent on the enlargement and diversification of Greenland’s economy to adjust to the end of the annual Danish stipend. Although there are differences between various political parties as to the best timetable for achieving independence, there is nonetheless a consensus within the political actors in Nuuk that it is necessary for the self-ruled territory with the Kingdom of Denmark to expand the sources of its income, in order to gain greater autonomy and ultimately full independence.
Another wild card is whether the ban will be sustainable, especially given the possibility of a rapid recovery of oil prices in the next year, (although such an outcome is now more uncertain, given economic pressures and ongoing coronavirus challenges). During his discussion at the online Arctic Circle Virtual talk, Minister Broberg also outlined the diplomatic and trade achievements of Greenland and the outside world, by noting the opening of Greenland representative offices abroad, including in North America and the European Union, and plans for a similar office to be opened in Beijing in the near future.
However, one question which also remains is given Nuuk’s interests in increasing the number of its economic links, and ongoing interest expressed by major actors including China, the European Union and the United States in potential Greenland investment, will the oil moratorium affect this cooperation?