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What is the first thing that comes to mind when you think of Greenland?

Chances are it’s ice, and lots of it, but for a few passionate prospectors it has the potential to be one of the most prosperous mining locations the world has seen for decades.

What’s more, those looking to mine in the far-flung northern country say ice is as much a part of the conversation as it is in Australia.

The biggest challenge, they say, is the age of its political system.

It is just under 10 years since the autonomous Danish territory achieved self-governence and, as you might expect, it is taking time to sort out the nitty-gritty when it comes to issues like mining policy.

Greenland Minerals Managing Director John Mair said patience was key for miners looking to break ground in the country.

The small-cap miner owns the undeveloped Kvanefjeld rare earths project in southern Greenland, which also boasts a substantial uranium resource.

“While you can develop clear and cooperative working relationships with the administration, there hasn’t necessarily been the depth of experience you would see in Australia or somewhere like that,” Mr Mair said.

“That does bring about challenges, but they are challenges that, through effective communication and listening, can be resolved.”

An area that has been the most difficult to overcome, according to Mr Mair, is getting permits granted.

“It’s a slow and convoluted process that reflects the lack of experience in the system and a lack of familiarity with the expectations of the global investment community,” he said.

This complex process was highlighted by Tanbreez Chief Geologist Greg Barnes as the biggest stumbling block facing the mining scene in Greenland.

The private company is developing its namesake rare earths project relatively close to Greenland Minerals’ Kvanesfjeld project.

“It is a major deterrent because it’s slow and expensive, especially from certain departments like the Department of Labour,” Mr Barnes said.

“I’ve personally put in about $50 million, which can be spent more efficiently as Tanbreez is a private entity. Tanbreez submitted an application to mine in March 2012, only to be held up by bureaucracy. However, in the last year I have seen a sudden willingness to advance projects, which is welcomed.”

Despite the red tape, Mr Barnes said Greenland offered a unique value proposition.

“The beauty of Greenland is you can basically walk in and pick up one of the world’s top 10 deposits virtually unpegged like I did with Tanbreez,” he said.

“The Tanbreez project is sitting on a 4.7 billion tonne orebody which has the potential to become the monopoly for not only rare earths, but for tantalum, zirconium and hafnium too.

“You just cannot pick up those sorts of orebodies anywhere else in the world.”

Greenland’s potential is not just linked to rare earths either, the breadth of commodities bubbling under the surface showcases how big an impact the country could have on the global mining scene if it ever gets off the ground.

In addition to large rare earth mineral deposits, there is said to be excellent opportunities for uranium, gold, nickel, tantalum, zirconium, iron ore, precious metals and zinc mining among others. 

“The geology of the northern belt of Greenland is the same geological unit that hosts some major historical zinc mines in the adjacent north-east of Canada,” Ironbark Zinc Managing Director Jonathan Downes said.

“Greenland represents itself as supportive of mining and is considered a low sovereign-risk nation. This is becoming increasingly important when compared to parts of Africa where taxes and mineral rights can change substantially in a short space of time.”

Ironbark holds three base metals projects in Greenland, including the Citronen zinc-lead deposit.

CHANCE OF A SNOWBALL?

The only snowball most of the mining companies in Greenland are interested in is the one that could potentially happen if the mining scene starts to take off. There is a sense amongst some of those working there that it will just take one or two projects to get off the ground for the industry to gain momentum.

Getting to that point might be difficult, however.

Mr Barnes said the problems with the political system stemmed from an over-emphasis on bureaucracy, with the relatively new mining department wary of the potential impact of badly managed mines.

“They’ve got this image from 150 years ago that mining companies just want to pollute, rip people off and leave,” he said.

Conversely, Mr Barnes said the mining industry would be a major boon to the economics of Greenland and should be welcomed with open arms.

“The potential for base metals is staggering, but it will only happen if they just let the mining companies do what they do best; get in and explore the area properly,” he said.

With the current situation as it is, Greenland is in a bit of a catch 22 situation. It is primed and ready for a large mining organisation to take the industry by the scruff of the neck, but at the moment none of the bigger players seem to be too interested.

Mr Mair is optimistic a positive outcome is in sight, especially given a more pro-mining government was elected earlier this year.

“It’s been quite a long road for us and for a group of other companies, but we sit with advanced assets of global significance in the relevant sectors,” he said.

“We have a top-tier partner that can facilitate project finance and development, it is just a matter of garnering full support from the administration in a timely manner.

“Importantly, there are a couple of globally significant projects approaching the development pipeline.

“What Greenland needs is for a couple of the more significant projects to actually go into construction and ultimately into production as a real proof of concept that Greenland is open for business and moving forward.”

One such project could be Ironbark’s Citronen zinc mine, which Mr Downes said could have an annual production of up to 200,000 tonnes per annum.

“I see Greenland has the potential to be a part of the global mining industry, but this will require a few bigger operations like Ironbark’s Citronen zinc project to pave the way,” he said.

“I am convinced once one large-scale mine is operating effectively it will strongly increase the attractiveness of Greenland to both developers and investors.”

SIMILAR DIFFERENCES

Aside from the obvious driver of perceived mineral value in Greenland, there is another reason a number of Australian companies, especially ones based in Western Australia, are interested in capitalising on the market.

On the face of it there are a number of differences, but when you look below the surface, things look surprisingly similar.

“It’s got the same rocks and it’s roughly the same size as WA,” Mr Barnes said. “It does have a large proportion of ice, but WA has got that big wad of sand in the middle.

“If you look at Greenland, it’s probably got more outcrop than WA, even though there is only about 10 or 20 per cent of the country not covered in ice. The outcrop is 100 per cent, which makes the geological work so much easier than in WA.

“In about 1960 mining activity in Greenland was not much smaller than WA, but now the country is turning over zero from mining.

“The expertise in WA goes very well in this sort of environment because you tend to focus a bit better.”

In an attempt to capitalise on this expertise, the Greenland Government hosted a conference in Perth in October aimed at building interest and attracting mining investment.

The event was attended by various Greenland officials, including Deputy Minister Jørgen T. Hammeken-Holm, who delivered a speech on the opportunities in Greenland.

Various mining organisations including Ironbark Zinc, Tanbreez and Greenland Minerals were in attendance to provide exploration updates and their thoughts on Greenland. 

Image: Ironbark Zinc's Citronen Project.



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