EDITOR: | October 25th, 2013 | 10 Comments

Greenland opens the door for rare earths (and uranium): now just watch whether China makes its play

| October 25, 2013 | 10 Comments
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rbgreesGreenland has made its decision to open up to rare earth and uranium mining. China is not a disinterested party; quite the contrary, in fact.

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.)

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,”

Oh really?

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.


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Comments

  • Dr. Copper

    Mr. Bromby, that is not fully correct, the media is reporting
    that Uranium wont be extracted if that constitute the main
    mineral from any project, and it is upto the Danish Government to
    outlay the regulatory-, foreign-, defense-, and security policies. It may
    create a few new job positions in Government.

    I think it will take years to get sorted out, and it seem that both
    the Greenland Self Rule and the Danish Government will set up
    council to rule on any disputes.

    So effectively, nothing has actually changed, Greenland still belong
    to the Kingdom of Denmark, always has, always will.

    Denmark seem to have the most strict environmental laws of any country
    on the planet, and no corruption issues.

    London Mining is looking for over USD 2 billion to develop their
    iron ore.

    October 25, 2013 - 5:25 AM

  • Robin Bromby

    Oh, goodness. You miss the point. It was not about the mechanics of what can be extracted (which will become apparent eventually) but about China’s strategy. Look at the forest, not one tree.

    October 25, 2013 - 6:31 AM

    • Dr. Copper

      Maybe you missed your own point, China won’t get any uranium in Greenland without the Danish Government’s
      green stamp. Greenland had their autonomy to vote
      on their zero tolerance since self-rule inception in 2009.

      None Uranium minerals different story.

      Perhaps use your weekend to trim your Canopy ?

      October 25, 2013 - 7:03 AM

  • Nevada George

    I had invested in Greenland Minerals early on and
    pulled the trigger when the Fukushima incident was
    negatively affecting REE Miners.
    Geopolitically US, EU, China and others are all interested in Greenland for various reasons.
    Hu Jintao visited Denmark last June to strengthen Bilateral
    relations.
    Greenland Leadership started loosening the restrictions on Uranium several years ago. However, I expect that there
    could be blow back from the nationalistic populace.
    Due to the Topography of Greenland most of the activity
    takes place in the coastal regions and offshore.
    Greenpeace and other Environmental Groups keep a
    close eye on the Artic Region.
    Some would argue that the Leadership of Greenland is
    trying to build up its’ economic base so as to break off
    from being a Territory of Denmark to an Independent Artic
    State.
    How will Denmark react? No culture remains static.
    Denmark has rapidly changing demographics and along
    with those changes a new culture that has gained
    influence in the Government may not have the same affection for
    Greenland as the present citizens do.
    I have been observing changes in Denmark since 1978.
    I was there last year and will be there again in December.
    I expect that some day I will not be able to sit down and
    have a Tuborg and Polser in Copenhagen as it will violate
    Sharia Law.

    October 25, 2013 - 11:09 AM

    • Dr. Copper

      interesting – yes anything uranium and big brother is watching you, even taping your mobile.

      Greenland is too ‘green’ to independently understand the International regulatory process which is evolving around Uranium and Rare Earths, the losers will be the junior exploration companies because they will be financially strangled by environmental regulations and lack of competent staff in compliance.

      Despite Mr. Bromby’s one tree hill approach he is right
      to address a more unison required mining orientated approach, something not possible before financing is sought from a different angle than present. It will require
      full transparent public-privat partnerships, currently a forbidden zone for short term milking financiers. And
      with good reasoning.

      October 25, 2013 - 2:17 PM

  • Aat Oskam

    Quote: “Jens-Erik Kirkegaard, Greenland’s minister for natural resources, said after Thursday’s vote that several laws now need to be changed before exports of rare earths can start “in a couple of years or more.” The government wants to introduce royalties on the mining industry and revise a law that would allow an influx of foreign labor.”

    So it will take some time before (H)REE’s can be exported, I wonder if GGG or RMR or Tanbreez will be able to raise the money to become a real producer on this basis/ timeline?

    October 25, 2013 - 4:22 PM

  • Aat Oskam

    And I forgot to mention HUD (Hudson Resources) for that matter.

    October 25, 2013 - 4:27 PM

  • The Cisco Kid

    Greenland Minerals and Energy Limited (ASX: GGG) in its ongoing feasibility studies for the Kvanefjeld Project (GGG 100%), has decided to focus on a staged development strategy with an estimated start-up cost of $810 million for an initial mine throughput of 3Mtpa. The original plan was for a 7.2Mtpa project costing $1.53 billion.

    _________________________________________

    How will they rise the money for that?

    October 26, 2013 - 5:08 PM

  • Robin Bromby

    The Financial Times today reports that Greenland’s government sees the lifting of the uranium ban (and of rare earths, too) as a means of the country obtaining full independence from Denmark. So that indicates how seriously the folk in Nuuk see this. And also backing me up in the importance of this to the REE space, the FT makes this point:

    “The end of the ban could have global geopolitical implications, as Greenland could potentially supply as much as a quarter of the world’s rare earths, minerals used in everything from mobile phones and light bulbs to weapon systems.”

    October 30, 2013 - 8:26 PM

  • vacuum

    Please consider writing something on nickel in the future. Pure Nickel had some news recently about several metals on their property and would likely be an easy starting contact, than a much larger nickel producer. Otherwise, the nickel mining sector is vapid. Recall nickel prices were huge just a few years ago. So, it fits with in with the pattern of also REEs whose current prices contend with a few years ago price highs.

    Appurtenant to the potential influx of Greenland supply of resources, here’s an essay by the DallasFed, ca. 2000, on technological change and resource scarcity. Its thesis: “new technology driven by free market forces has overcome the geophysical scarcity of nonrenewable natural resources. Increased reliance on markets during the closing
    decades of the twentieth century is cause for optimism that these trends will continue in the twenty-first.”

    http://www.dallasfed.org/assets/documents/research/efr/2000/efr0001a.pdf

    However, challenges to the article’s thesis are today apparent in the US. Since 2000, there is now less reliance on free market capitalism and more reliance upon the vagaries of the WH and the largess of the Fed. Also, there is increasing geopolitical disconnection as will become evident from the fallout from the tapping communications of foreign dignitaries and heads of state.

    ps. there are some interesting tables illustrating metal commodities prices deflated by supposed CPI, & etc. Among these are tin. Cf. tin price 1980s.

    October 31, 2013 - 3:43 AM

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