Greenland opens the door for rare earths (and uranium): now just watch whether China makes its play
After years of indecision, Greenland parliament’s has voted to end a decades-long prohibition on mining radioactive materials including uranium and rare earths. Greenland as we know has great REE potential; for example, three Australian companies have promising projects there (of which, more in a moment) — and one of which has remained, astonishingly, below the radar even though it claims to own the largest rare earth deposit in the world.
By astounding coincidence, China this week also made a pronouncement on the management of the whole Arctic zone. For those who savour geopolitical intrigue, this is a story right up their alley.
But, first, I want to draw your attention to two reports that have appeared this year. One, in February the Christian Science Monitor ran a headline reading “What’s China Doing in Greenland?”. It said that Western policy makers were becoming increasingly anxious about China’s foothold in Greenland, “particularly its desire to produce the semi-autonomous island’s rare earth metals”. It said China was making a play for these resources, courting the government with infrastructure projects and other investments that were intended largely to help Chinese companies acquire those mineral deposits.
The Monitor argued that China’s drive to develop Greenland’s rare earths may have been driven more by its economic than geopolitical interests. China not only wants to maintain as much control as possible of the REE supply, but it needs more rare earths for its own industry, especially the heavy rare earth elements. Greenland has about 9% of the world’s known REE reserves.
Then, two months ago, a mining news site reported that China was increasingly concerned about Greenland’s increasing presence in the rare earth field and added that this was given additional currency by the then recent visit to Denmark by Chinese president Hu Jintao. The view was that, because China no longer had the guaranteed rare earth supply it needed, it was eyeing Greenland’s supplies. The speculation is that China is particularly interested in the Kvanefjeld deposit, owned by Australia’s Greenland Minerals & Energy, with its 6.6 million tonnes of rare earth-bearing oxides with significant quantities of heavy rare earths and notably yttrium. (Greenland has gained self-government from Denmark but Copenhagen has certain reserve powers, including control of security and foreign affairs. The suspicion being voiced by some sites is that China’s Hu was seeking Danish help in getting the inside running with the Greenlanders.)
Get our daily investorintel update
In March, Greenlanders elected a pro-mining government, voting in the main opposition group, the centrist Siumut party, which favours tapping the island’s great mineral wealth. But even the previous administration said it would not favour the European Union when it came to rare earths. The former Prime Minister Kuupik Kleist had said it would not be fair “to protect others’ interests more than protecting, for instance, China’s”.
Then there is the Arctic Council, which has tries to have some moral authority when it comes to influencing what happens at the top of the world. The membership is made up of Canada, Denmark, Finland, Norway, Iceland, Russia, Sweden and the U.S. China has been angling for years to gain observer status, which it this year achieved (along with India, Japan, Singapore, Italy and South Korea; the European Union is eager to get similar status).
So this week we see a news report that says “China agreed with the Arctic Council that development in the Arctic region should abide by local regulations and environmental requirements, according to a senior official. China pledged to make a greater contribution through its new official observer role in the council, Jia Guide, deputy director-general with the Department of Treaty and Law under China’s Foreign Ministry, said Tuesday“.
The Xinhua news agency quoted Jia saying “resource development in the Arctic was a possibility, but not a priority for China,”
It was diplomatic of Jia, speaking in Whitehorse, and then his stressing how important environmental protection was to his country.
So we have wait and see. Greenland Minerals & Energy (ASX:GGG) went into a trading halt at the Australian Securities Exchange Friday, saying it was preparing a statement on the Greenland decision as it affected uranium (it did not mention rare earths).
No doubt the news was received with interest at Ram Resources (ASX:RMR) which has the Motzfeldt project in Greenland. The Aries prospect within that project has an inferred mineral resources of 884,000 tonnes of total rare earth oxides, along with zirconium, niobium and tantalum.
But there is also an unlisted, Perth-based company that owns a Greenland REE explorer, Tanbreez Mining Greenland, which says it has 4.3 billion tonnes of eudialyte-bearing ore. This, it claims, “is probably the largest REE deposit in the world”. The average grade is 1.8% zirconium oxide, 0.2% niobium oxide, 0.5% light rare earths and 0.15% heavy rare earths. In terms of REE breakdown, cerium makes up 33% of the rare earths, yttrium 19%, lanthanum 17.8%, neodymium 12%, praseodymium 3.2%, dysprosium 2.9%, gadolinium 2.5%, erbium 2.4%, samarium 2.3%, ytterbium 2%, the balance made up of holmium and other elements.
Tanbreez stresses that there are background only values of thorium and uranium in the eudialyte (similar to background values in ordinary country rock) meaning the final REE contains no radioactive elements. The deposit adjoins a natural, largely ice-free harbour.
InvestorIntel is a trusted source of reliable information at the forefront of emerging markets that brings investment opportunities to discerning investors.