EDITOR: | October 27th, 2013 | 13 Comments

Greenland Minerals seeks to push the start button ― and Australia wants to play uranium catch-up

| October 27, 2013 | 13 Comments
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renluranGreenland is seemingly on the road to uranium-producer status (and rare earths production that could equal that of Mt Weld), while Australians ponder their failure to take full advantage of their uranium riches.

Following our Friday report on the move by Greenland’s parliament to remove the zero-tolerance policy on extraction of rare earths, Greenland Minerals & Energy (ASX:GGG) issued a statement saying the policy change means it can move into acquiring a mining permit.

Its Kvanefjeld project has been a long time in the making. The presence of uranium in that part of Greenland was discovered in the 1950s and through the 1960s, 1970s and 1980s Danish research institutes investigated the mineralisation; back then Denmark was looking to get into development of nuclear power but when that position was abandoned in 1983,work stopped at Kvanefjeld. In 1988 the zero-tolerance policy was introduced. A statement by GGG points out that it was the transition in 2009 of Greenland moving from “home rule” to “self rule” that opened up the prospect of mining; thenceforth, Greenland assumed full authority over its mineral and hydrocarbon rights.

Coincidentally, a day before the news arrived from Greenland of this new policy, Sydney-based brokers Blue Ocean Equities put out a report anticipating the new law passing.

On the rare earths front, Blue Ocean sees Kvanefjeld in production by 2017 at an annual rate of 23,000 tonnes a year of total rare earth oxides; as the report notes, that would put it in the same level as Lynas Corp’s Mt Weld (23,000 tonnes a year) and not too far behind Mountain Pass (37,000 tonnes).

Just to bring readers up to date, the REE distribution is thus: lanthanum 26.42%, cerium 44.11%, praseodymium 4.31%, neodymium 13.18%, samarium 1.4%, europium 0.12%, gadolinium 0.99%, terbium 0.14%, dysprosium 0.99%, holmium 0.16%, erbium 0.46%, thulium 0.04%, ytterbium 0.33%, lutetium 0.03% and yttrium 7.33%.

It is worth noting that the project also contains zinc with plans to sell 5300 tonnes of concentrate a year. Just this week several analysts upgraded their outlook for zinc. The galvanising metal closed Friday at $1955/tonne but analysts are calling for $2400/tonne in 2015 and one says by 2016 zinc will be at $3500/tonne.

Blue Ocean sets out GGG’s task: “The main challenges for GGG will be obtaining a mining licence, funding, generating confidence among investors in the REE and uranium markets”. Each of those is a substantial hurdle in itself.

Kvanefjeld, according to GGG, is the largest known rare earths deposit outside China. It is also the fifth largest uranium deposit in the world. Interestingly, the third largest is Häggån in Sweden, owned by another Australian company Aura Energy (ASX:AEE). The largest, of course, is Olympic Dam in South Australia.

Which leads us into a report from the Australian Uranium Association, Making Australia Number One.

It begins: “Australia has the world’s largest endowment of uranium but has never quite made to be the world’s number one uranium producer. It is time we aimed for that”.

Here are the rankings of what are termed “reasonable assured resources” in terms of world share:

Australia 31%
Kazakhstan 12%
Russia and Canada, 9% each
Niger 8%
Brazil, Namibia, South Africa, 5% each
U.S. 4%
China 3%
Ukraine and Uzbekistan, 2% each,
Mongolia and Jordan, 1% each.
Other 3%

The report notes that Australia in 2008 got to within 600 tonnes of Canada’s production, but since then has been overtaken by Kazakhstan as No. 2. Kazakhstan has now overtaken Canada to take the lead and is increasing production by around 10% a year ― and has declared it wants to produce 30% of the world’s uranium; the central Asian state has formed links with uranium users in Russia, Japan and China, as well as taking a significant stake in Westinghouse and also getting into joint ventures with French and Canadian companies.

Says the report of the way in which Australia has lost ground in this game: it is time that policies were put in place to take advantage of the country’s huge resources.


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Comments

  • Bill Keenes

    Robin,

    it’s one thing to have a resource, and it’s a completely different thing to have a market for that resource

    so who will they sell to?, and how will they raise the development capital of around $800M ?

    Cheers
    Bill

    October 27, 2013 - 4:08 AM

    • Dr. Copper

      The Danish Government with all its green involve will put their chin on
      the EU shoulders and the Chinese will be side tracked.
      Greenland knows Denmark holds their key to the EU.

      Look how Tanbreez is fostering governemnt links with the Danes
      in different technical instances. GMEL is no where to be seen on the
      same scale, they have a clear otherwise agenda a.k.a a pump n’ dump
      scheme.

      That would mean your question cant really be answered before the legistrative is clear, and by then GMEL’s PEA will be history yet again.

      The way to the Greenland mineral riches is via Private-Public Partnerships.

      It will never happen on private merit alone.

      October 27, 2013 - 7:01 AM

      • Realty

        Dr. Copper,

        GDLNF actually has been fostering its relations with the Danes and many other countries around the world. GDLNF has a much greater opportunity to be funded over Tanbreeze because GDLNF is a public company. Tanbreeze has to take different avenues to attain funding because it is a private company. I have been a follower of both companies for many years now. Please do your homework before you make such derogatory comments about companies that you clearly dont know enough about.

        Realty

        October 27, 2013 - 10:09 AM

        • Dr. Copper

          There is one thing you cannot do and that is to buy your way through the Danish Legistration. That is the basic rule you need to understand. You will get caught
          out due to their seemingly turning every
          stone over. As another poster mentioned,
          the populace in Greenland is up in ice
          on the voting issues, not for scrapping the
          zero-tolerance, but of the way it was
          conducted. Do you know how the Danish
          election debate are/is conducted ? Greenland is on the same cultural path via the Danish Education processes throughout since 1970- and continuing to this day. The keyto the environmental
          processes will be via the Danish green
          fingers.

          I wasnt making any points of preference
          because I am of the opinion that the REE space wont be done without government
          partnerships, be it labor issues in Greenland, alternate production facilitites
          elsewhere, on funding, well the right project always obtain funding, doesnt matter whether you spot a pump and dump or not.

          There is no doubt in my mind that Tanbreez has fostered much closer
          relations with the right Danish instances
          and government agencies. They are just
          not as vocal about it as GMEL.

          October 28, 2013 - 7:56 AM

    • Robin Bromby

      Don’t ask me – I’m just the reporter. But I did address some of your point ….

      Blue Ocean sets out GGG’s task: “The main challenges for GGG will be obtaining a mining licence, funding, generating confidence among investors in the REE and uranium markets”. Each of those is a substantial hurdle in itself.

      But as to market, before the Thursday announcement from Nuuk, I was considering writing a post on the strategic considerations of REE in Greenland. The potential of deposits close to US and Europe is something worth considering. And your general question could be applied to many projects: that is, how will they raise the money, who will buy?

      October 27, 2013 - 3:39 PM

      • bill keenes

        thank you Robin, I was starting to think I was invisible to you

        …. when we stop questioning, we become one of the sheep, one of the followers

        and perhaps my general question (how will they raise the money) “should” be applied to many projects

        .. investors may then be better informed …

        this is after all “investorINTEL”

        October 28, 2013 - 11:56 PM

  • Dr. Copper

    Mining has gone on in Greenland since mid 19th century, here an abstract from Alcan’s files of the lessons learned.

    http://wwwx.dtu.dk/upload/centre/artek/artek%20event%202013/proceedings/proceedingsartekevent2013_final.pdf

    This issues with Greenland is labour and that is Denmarks area.

    Similar to Gina Reinharts Indian workers importation issue.

    I would suggest a read of Peter Hoeg’s ‘Miss Smilla’s feeling for snow’
    if interested in the Greenlantic culture.

    October 27, 2013 - 5:07 AM

  • Veritas Bob

    “Kvanefjeld, according to GGG, is the largest known uranium deposit outside China. It is also the fifth largest uranium deposit in the world. Interestingly, the third largest is Häggån in Sweden, owned by another Australian company Aura Energy (ASX:AEE). The largest, of course, is Olympic Dam in South Australia.”

    Perhaps there are some typos or unclear wording, but the paragraph above doesn’t “add up”.

    October 27, 2013 - 10:38 AM

    • Robin Bromby

      Oops, thanks! It should be largest REE deposit outside China. Will amend immediately. You know, that just slipped past by eye even when re-reading.

      Even Homer nods, as they say.

      October 27, 2013 - 3:42 PM

      • Veritas Bob

        Thanks. That makes sense now.

        October 27, 2013 - 8:51 PM

  • InvestorIntel Week-in-Review: Berkwood (+33.33%), Hastings Rare Metals (+26.83%), Texas Rare Earth (+24.38%), & Canada Rare Earth (+14.29%) | InvestorIntel

    […] InvestorIntel’s Australian head editor, Robin Bromby wrote up a bevy of articles on the REE sector last week, including: ‘Tin as a fuel catalyst? Tin as a fire retardant? Its potential uses keep growing – along with the list of companies exploring for it’, ‘How new REE miners might steal a march on their Chinese competition’; and two pieces on Greenland: ‘Greenland opens the door for rare earths (and uranium) – now just watch whether China make its play’, and ‘Greenland Minerals seeks to push the start button – and Australia wants to play uranium catch-up’. […]

    October 28, 2013 - 11:31 AM

  • Nevada George

    In any project containing Uranium you should factor in
    unforeseen circumstances… politically, environmentally or
    otherwise.
    I thought that European Uranium Resources project
    in Kuriskova, Slovakia was a fairly conservative investment.
    Recent glitches have proven me wrong… again.
    Went quickly from +90% to -50%.
    Still bullish on Uranium… but getting frustrated.

    October 28, 2013 - 1:55 PM

  • Paulina

    Thanks in favor of sharing such a fastidious idea, piece of writing is good, thats why i have read it entirely

    November 12, 2013 - 10:55 PM

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