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By Gary Thomas
Topics CoveredWelcome to GreenlandOverview of ResourcesIndustrial Minerals and GemstonesMetalsFossil FuelsInvestmentSources
Welcome to Greenland
Greenland is an island country located at the northern part of the North American continent between the Arctic Ocean and the North Atlantic Ocean. It is the 12th largest country in the world with a total area of 2,166,086 km2, and a small population of 57,695 as of July 2011. Almost 81% of the land is ice capped and hence the country experiences extreme arctic to subarctic climatic conditions.
|The national flag of Greenland. Image Credit: CIA Factbook.|
Greenland was under colonial rule for a long time and the country gained greater control over its internal affairs when the Self-Government Act was made into law in June 2009. However, Denmark continues to have command over Greenland's security, foreign affairs, and financial policy and remains its largest trading partner. The country has many rich deposits of coal, iron ore, lead, zinc, molybdenum, diamonds, gold, platinum, niobium, tantalite and uranium.
The economy of Greenland is partly dependent on the income derived from mineral exploration and extraction. Due to the economic slump in 2009, Greenland's GDP decreased about 1%, but progressed by 2% in 2010 and 3% in 2011. The country’s GDP as of 2011 is $2.133 billion. Increased hydrocarbon and mineral exploration and extraction operations helped the country overcome the economic slump.
Overview of Resources
Greenland has abundant mineral and natural resources including diamond, gold, precious gemstones, hydrocarbon, rare earth metals, lead, and zinc. Studies indicate the possibility of oil and gas fields in northern and northeastern parts of the country. Gold production is carried out in the southern parts of Greenland. Making use of the island’s vast hydropower resource, a US-based aluminum producer has closed a deal with the government to construct a power generation facility and an aluminum smelter.
The coast of Greenland as seen from the air. Image Credit: CIA Factbook
Industrial Minerals and Gemstones
Diamond explorations in Greenland is handled exclusively by companies such as NunaMinerals and The True North Gems Inc. NunaMinerals has spotted new exploration targets for diamond at Kimberlite and Qaamasoq dykes at Tikiusaaq. The True North Gems Inc. has been involved in the Fiskenaesset ruby project on the southwestern coastal regions of the country and has declared an estimated ruby resource of about 296 million carats. From a 30 t sample, single pink sapphire was valued at $460 per carat and single ruby was valued at $3,220 per carat.
Greenland's Red Rock Resources Plc, a mineral exploration company, has been working towards exploration and development of gold, iron ore and other metals. During 2012, the Nalunaq Mine is expected to produce about 710 kg/yr of gold, while Nuukfjord Gold is undertaking regional-scale exploration in Igasoq, Isua, and Qussuk areas.
Angel Mining is set to continue exploration and development initiatives to reopen the Black Angel mine to unearth lead and zinc. Ironbark Zinc reports that its Citronen project has a reserve of 4.5 billion Mt of lead and zinc ore.
Greenland Minerals and Energy Ltd. (GMEL) of Australia has claimed that it has access to what could potentially be the world’s largest rare-earth elements deposit. Kvanefjeld is home to one such deposit. Radiometric and magnetic surveys conducted by mining giant NunaMinerals showed that its Qeqertaasaq and Tikiusaaq license areas are rich in carbonatite dykes rich in rare earths.
Greenland's western coast. Image Credit: CIA Factbook
The Arctic resource base is rich in natural gas and gas liquids. However, drilling and transporting natural gas and petroleum has proved an expensive and risky task. Additional costs incurred due to melting ice flooding the existing land is also a major challenge in these areas.
The government of Greenland has awarded licenses for exploration and exploitation of natural gas and petroleum in Baffin Bay to the following companies:
- A.P. Maersk Oil AP and DON G Energy ASA of Denmark
- NunaOil A/S of Greenland
- Cairn Energy plc. of UK
- GDF Suez S.A. of France
- Royal Dutch Shell plc of the Netherlands
- Statoil ASA of Norway
- and ConocoPhillips Corp. of USA
Recently, Greenland has lifted its decades-old ban on mining of uranium, giving in to the pressure by mining companies. Experts believe that uranium will be a huge income generator for the country’s struggling economy, as it has vast uranium reserves. In 2010, Greenland Minerals and Energy (GME), an Australia- based company, became the first company to be granted permission to include radioactive elements in its exploration phase. This amendment will also allow Ram Resources Ltd. of Australia’s Motzfeldt projects and Greenland Mineral’s Kvanefjeld to proceed with thorium and uranium exploration in the mineralized zone.
Greenland is currently considered as the last frontier for exploration by mining experts. Greenland’s Mineral Resource Act provides a foundation and framework for future control of mineral resources. Within its framework are also activities that affect the development of the mineral resources. These activities must be performed in agreement with advanced international practices and must be authorized by the Government of Greenland.
The stable political scenario and the government’s positive outlook towards the mining sector are likely to further enhance mineral development. Experts feel that this will also favor foreign investments, despite high operating costs and extreme climatic conditions. China has plans to invest 13 billion kroner in an iron mine located in Nuuk, Greenland’s capital city. A South Korean group is also lining up to invest 15 billion kroner in the Kvanefield rare earth mine in southern Greenland. This will be the largest investment in the history of this island country.
Greenland certainly has caught the attention of the global mining industry and is expected to see better economic development in the coming years, thanks to its flourishing mining sector.
Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.