EDITOR: | February 5th, 2014 | 4 Comments

Greenland has the potential to supply 30% of the world’s rare earth elements by 2020

| February 05, 2014 | 4 Comments
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The EU Covets Greenland’s Rare Earths“Greenland braces for gold rush“ shouts London’s The Guardian newspaper this week. Not so fast. The Greenland-based The Arctic Journal cautions that European Union bureaucracy is hampering the exploitation of key minerals in the country. As Greenland, according to the latter newspaper (which is underwritten by a foundation run by the Bank of Greenland), has the potential to supply 30% of the world’s rare earth elements by 2020, the development of this resource is critical, if you’ll pardon the expression. Especially as the EU is so concerned about supplies of rare earths and other critical metals — and Greenland has potential to supply niobium, platinum group metals and uranium.

Getting mining under way has long been a problem for Greenland. Most recently there was a ban on mining uranium, now lifted, but which had its implications for exploitation of rare earths. But even before the green movement inspired such bans, progress was slow. There have only ever been five mines of significance in Greenland before the 21st century: the Ivittuut cryolite mine operated between 1854 and 1987; the Josva copper mine worked from 1904 until 1915; copper and silver was mined from the King Frederik mine from 1851 until 1912, and the Kvanefjeld uranium mine was operating between 1958 and 1980. In recent weeks we have seen the Danish and Greenland prime ministers signal that they could have an agreement by the end of 2014 on uranium mining and how it will resume.

There was even graphite mining spurred by the needs of the First World War, the Amitsoq mine being worked from 1915 until 1924 and producing 6,000 tonnes of graphite over that period. The graphite mine was abandoned due to difficulties separating the graphite flakes. The deposit still has a resource of 250,000 tonnes at an average 20% graphite.

The Guardian’s report looks at the melting icecap and how this opens up more areas for mining. Rightly, it reports that the world’s major industrial players are scrambling for the rights to exploit the mineral riches. Certainly, the EU and China see Greenland as a significant prize. The newspaper is concerned about the impact on the environment and the population of just 56,000, with estimates of the number of mine workers needed ranging from 10,000 to 200,000. One company, London Mining, may bring in as many as 3,000 Chinese workers.

But, as The Arctic Journal shows, the mining companies might find that some of those riches remain elusive, and that there has been a great deal of talk in Brussels but not too much action. It points out the European Commission (EC) in 2010 issued its list of critical metals in which Europe faced shortages: antimony, beryllium, cobalt, fluorspar, gallium, indium, germanium, graphite, magnesium, niobium, platinum group metals, rare earths, tantalum and tungsten.

Says the paper: “But the EU’s efforts to implement a long-term successful strategy for securing the supply of key raw materials has become bogged down by bureaucracy”.

In 2011 the European parliament was given a paper showing Greenland is home to the largest deposit of rare-earth elements in the world; this is based on estimates that the deposit beneath the ice and rocks of the Ilimaussaq intrusion on Greenland’s south-western shore could supply as much as 25% of REE world demand for the next 50 years.

In January the EU launched the Eurare project with the aim of identifying REE sources within Europe and building processing plants to supply European industry. The paper says the Eurare project is less than perfect: only four of its 23 partner companies are in the rare earths business. Two of those companies are Australian-controlled: the listed Greenland Minerals and Energy and the unlisted Tanbreez Mining Greenland.

Both companies are soon to apply for mining licences and will be looking for financing. The Journal notes that “in light of the urgent need to secure future supply of critical minerals in Europe, the EC must support these projects via a secured loan facility”.

In June 2012 the vice-president of the EC, Antonio Tajani, visited Greenland and said the EU was prepared to offer “hundreds of millions” of euros in REE development. The one condition was that Greenland would not give China exclusive access to its rare earth production.

So far, though, no sign of that money. Europe aids Greenland through the Fisheries Agreement between the two (€42.8 million a year) and by education funding (€25 million a year).

Most of the focus insofar as Greenland’s rare earths and uranium has been on the political and environmental aspects of exploiting these resources.

However, as the Journal indicates, not too much has happened in terms of financing and clearing the way for the mining companies to get going. So far, there’s been four years of talk among the Brussels bureaucracy. Now it may be time for a few hard decisions — and action.


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Comments

  • J. Best

    Interesting information here. I was unaware of the previous graphite mining in Greenland. The bureaucrats don’t seem as motivated as would be expected in light of economic conditions. It would seem moving forward is in their best interest. Look forward to more on this.

    February 5, 2014 - 9:11 AM

  • Laurent Krull

    Good information and I think South and North Greenland should be considered in two different ways: the North preserved against any mining activities and the south dedicated to limited industrial development integrating the best practice to preserve the environment.
    We will see..

    February 5, 2014 - 12:24 PM

  • Bill Keenes

    Great article Robin, the Kvanefjeld multi‐element project contains one of the world’s largest undeveloped resources of rare earth metals and uranium, and has now been significantly de-risked – so will they be able to raise the $810M in required capital expenditure – that’s the $810M question.

    I note from recent announcements a major shareholder has been selling – that’s not a good look – no doubt they have their reasons which may be completely unrelated to the project economics.

    Speaking of the project economics have you reviewed the feasibility study … they are assuming 60% value recognition in concentrate – my understanding is they will be lucky to achieve half that in the current market.

    February 5, 2014 - 12:26 PM

  • Tracy Weslosky

    Fascinating graphite information Robin! …going to tweet this out.

    February 5, 2014 - 4:16 PM

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