Mining-friendly Party Doubles Support in Greenland Vote

A centrist political party that championed the mining industry in its campaign made gains in the Greenlandic general election this week.

Demokraatit doubled its voter share and increased its representation in the Greenlandic parliament at the expense of the two largest parties in the previous governing coalition.

According to Reuters, surveys suggest that voters in the country were focused on better infrastructure and boosting the economy, which currently depends on fishing and handouts from Denmark.

Greenland has huge mining potential with vast mineral reserves that are slowly becoming more accessible as climate change bites. For now, mining operations in the isolated country are minimal.

The development of the mining industry is seen as key in the quest for Greenland’s eventual independence.

Foreign investors watched the election closely for signs that mining could get back on track after a fall in commodities prices and more red tape following increased autonomy in 2009.

Various foreign companies have been itching for the opportunity to begin operations in Greenland, including Ironbark Zinc (ASX:IBG), which has three projects in the nation.

Ironbark’s recently published feasibility study for its Citronen zinc project shows that it is projected to produce 200,000 tonnes of zinc per year over a 14-year mine life.

The company reported in March of this year that initial site and mine preparation works are soon to commence at the Citronen site, located on the frozen northern coast of Greenland. Essential equipment and fuel will be transported to the site by ship.

Managing Director Jonathan Downes said in the March press release that the company is preparing for “large scale operations.”

He noted, “Ironbark intends to take in mining equipment to commence breaking ground this year and other site works. This will ensure that when financing of the project is completed,we can hit the ground running towards first zinc production without the delays of waiting for these long lead time items.”

The company is confident that it is well placed to meet growing global demand for zinc, and is working on project financing with China Nonferrous Metal Mining to incorporate Chinese equipment and construction costs into its feasibility study.

Ironbark has a shareholder base that includes Glencore (LSE:GLEN) and Nyrstar (EBR:NYR), the second-largest zinc producer in the world.

Currently Greenland hosts only one operational mine, a ruby mine in Southwest Greenland operated by Greenland LNS. Meanwhile, Canada’s Hudson Resources (TSXV:HUD) has commenced construction on an anorthosite mine due to begin production in late 2018.

Additionally, Australian company Greenland Minerals and Energy (ASX:GGG) is currently developing the Iimaussaq Complex in Southern Greenland, where the company is investigating resources of rare earth elements, uranium and zinc.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.