Critical Metals

A geographical overview of the rare earth mining potential evident in Greenland.

Rare Earth Mining in Greenland

Boasting an area half the size of Europe, Greenland hosts enough rare earth elements (REEs) to supply an estimated 25 percent of global demand over the next 50 years, according to Dr. Damien Degeorges, an academic who has worked extensively on Greenlandic issues.

History

Greenland was unknown to Europeans until the 10th century, when Eric the Red discovered it and built a community of Icelandic and Norwegian Vikings. Before that, it was inhabited by indigenous Arctic populations. The direct ancestors of the modern Inuit Greenlanders did not arrive from what is now Northern Canada until around 1200. The Norse settlements eventually left the region during the mid-1600s, while the local Inuit remained. Denmark and Norway claimed the territory, but after several centuries of no contact it was feared that the Norse Greenlanders had lapsed back into paganism. As a result, a missionary expedition was sent to reinstate Christianity in 1721; its members settled in what it now Greenland’s capital city, Nuuk.

During the Second World War, Greenland became detached, socially and economically, from Denmark and more connected to the United States and Canada. Following the war, control was returned to Denmark, and in 1953 its colonial status was transformed into that of an overseas county. Although Greenland is still officially part of the Kingdom of Denmark, it has practised home rule since 1979, and in 1985 became the only territory to leave the European Union. In 2009, self-government replaced Greenland’s home-rule government, and today the country has the right to elect its own parliament.

Economic and geopolitical conditions

Greenland has registered a foreign trade deficit since the closure of the Black Angel lead and zinc mine in 1990. The country suffered negative economic growth in the early 1990s; however, the economy has since improved. Fishing, sealing and fur trapping are its principal economic activities. It is a politically-stable democracy and has underlined its willingness to attract foreign investment through mining.

The region presents a wealth of opportunity in that while it has a rich history of mineral exploration, very little has been done to advance projects to the production phase. The Bureau of Minerals and Petroleum is responsible for tasks relating to both minerals and petroleum and has clearly indicated that it wants to progress the country’s mining sector. The bureau is an agency under the Minister for Industry and Mineral Resources.

In a recent interview posted on his blog, Aheadoftheherd.com, Richard Mills underlined his opinion that Greenland will be a future investor favorite and highlighted the pro-mining environment currently being portrayed. He said, “Greenland wants to cement its financial independence from Denmark and sees mineral mining and oil and gas production as good sectors to achieve this. The permitting process takes a very common sense approach.”

The country’s potential was also made clear when the vice president of the European commission, Antonio Tajani, led the European push for minerals by forging an agreement with Greenland to look at joint development of its mineral deposits. The agreement will extend beyond REEs to metals such as gold, iron and possibly oil and gas.

In 2009, the government of Greenland presented a new mineral strategy that focuses on areas and themes that establish the country as an attractive exploration area.

Historical and potential exploration initiatives

Although Greenland has no advanced mineral or metals production, it has shown great potential as a host for a number of minerals, including gold, base metals, REEs and diamonds. The country’s geology is similar to that of Canada and Northern Europe and includes Archaean craton (a layer of earth that is viewed as having high potential for REEs). Despite its geological appeal, Greenland remains relatively unexplored.

Its mineral potential was gradually investigated during the 1900s. From 1953 to 1969, the lead-zinc mine in Mestersvig in East Greenland was operational, while the Black Angel lead-zinc-silver mine in Maarmorilik, West Greenland, operated from 1973 until 1990, when it was closed due to most of the orebody being depleted. The remaining ore reserve is currently being assessed as a basis for reopening the mine.

Possible drawbacks

Challenges lie in that only 15 percent of the country is free of ice; the remaining bulk is permanently frozen under the Inland Ice Cap, which is 3 kilometers thick. Exploration efforts are therefore restricted to the coastal portions of the island.

There are also concerns as to whether mining practices can be carried out without damaging the country’s pristine Arctic environment. Henrik Stendal, head of the geology department at Greenland’s Bureau of Minerals and Petroleum told The Guardian that while the government is determined to ensure that miners adhere to the highest international standards, officials have little experience at regulating extraction.

Jon Burgwald of Greenpeace has also voiced his concerns, saying that some of the REEs are likely to be found in deposits that also contain uranium, which could lead to the dispersal of uranium dust into the environment. Mikkel Myrup of locally-based environmental organization Avataq added that Greenland’s government lacks the ability to ensure the environmental safety of mines. He said, “[w]e do not have the institutions ready, or the competencies, and we are facing a huge invasion from many big multinational companies.”

REE exploration opportunities

Greenland Minerals and Energy (ASX:GGG) is a junior company focused on delivering a production center for specialty metals, including REEs, from its Ilimaussaq complex in South Greenland. Kvanefjeld was one of the company’s first large-scale deposits to be delineated, and is recognized as one of the world’s largest resources of REEs. It is estimated to contain a favorable mix of REEs, including yttrium. In the higher-grade portion of the resource, heavy rare earth oxides and yttrium oxide account for 12 percent of the total rare earth oxide (TREO) inventory.

Hudson Resources (TSXV:HUD) controls the Sarfartoq carbonatite complex in West Greenland. It is one of the world’s largest carbonatite complexes and hosts multiple minerals of interest, including REEs.

According to a company presentation, a number of potential high-value REE samples were overlooked in the late 1990s when exploration work initially began. There were 13 samples that displayed an average TREO of 1.6 percent, and samples indicate very high concentrations of high-value neodymium/praseodymium and europium. The six best samples averaged 3 percent TREO — including 1.46 percent neodymium oxide, 0.03 percent europium oxide and 0.23 percent praseodymium oxide.

Hudson also collected a 5-tonne bulk metallurgical sample that graded 2.5 percent TREO from its main zone, the ST1. The neodymium oxide averaged 20 percent of total REO.

 

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

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