MAC: Mines and Communities

Greenlanders vote - but for what kind of future?

Published by MAC on 2013-03-19
Source: Reuters, Globe & Mail, AP

Last week Greenlanders voted in a new government. How will it now meet the challenge of  having an apparent wealth of natural mineral resources - yet also one of the most fragile environments on earth?

For earlier article, see: The Coming of a Perfect Arctic Storm

Greenland rolls up the resource welcome mat

Paul Waldie

The Globe and Mail

13 March 2013

The tiny population of Greenland has sent a powerful message to China and a host of global mining companies eager to tap the territory's resources: Not so fast.

Greenland has been getting more attention from resource companies, as global warming opens up sea lanes and makes accessible its vast potential riches of iron ore, gold, uranium and oil. In recent years, the region has been visited by energy and mining companies eager to exploit these resources - including Calgary-based Husky Energy Inc., which holds exploration rights off the island's west coast. China has taken a particular interest: One of the few mining projects under way is a $2.3-billion mine led by Britain's London Mining PLC that would send 15 million metric tons of iron ore to China annually.

But in elections Tuesday, Greenlanders made it clear they have become wary of the foreign invasion. Voters turfed out a coalition government led by Kuupik Kleist, who had been opening the island up to offshore investment. Mr. Kleist had issued roughly 140 exploration licences and introduced legislation to make it easier for foreign workers to come to Greenland. That law was seen by many as clearing the way for up to 2,000 Chinese workers to help build the iron ore mine.

Opposition leader Aleqa Hammond, who heads social democratic party called Siumut, won 42 per cent of the vote and 14 seats in Greenland's 31-seat parliament. Ms. Hammond is expected to form a coalition within a few days, making her the first female Prime Minister of Greenland, which has semi-autonomous status within the kingdom of Denmark.

Her party campaigned on a platform of slowing down resource development. She plans to scrap the foreign worker legislation, hold public consultations on resource development, and introduce a system of royalties on resource companies.

"We are welcoming companies and countries that are interested in investing in Greenland," Ms. Hammond told Reuters after the election results were announced early Wednesday morning. "At the same time, we have to be aware of the consequences as a people. ... Greenland should work with countries that have the same values as we have, on how human rights should be respected. We are not giving up our values for investors' sake."

The election results were a backlash against Mr. Kleist's open door policy, said Marie Ackrén an associate professor of political science at the University of Greenland. "It's a kind of protest against this current policy," she said in an interview from Nuuk. "There is a sense that there has been a little bit fast development right now and the pace of moving into this kind of big industry has been going too far."

Ms. Ackrén added that the change in government will have an impact on existing projects and plans by other companies. "It will be a new situation. It's a little bit uncertain now what will happen with all of these agreements that are already in place," she said.

Although still technically Danish territory, Greenland was given self-rule and control over its resources in 2009. The territory, which has 57,000 inhabitants, still receives about $600-million a year from Denmark, but that amount has been frozen since 2009 and is expected to decrease as Greenland develops its resources. For now, Greenland relies mainly on fishing, with halibut and shrimp the main exports.

"It is a major question for Greenland now, how to handle this increased international attention to Greenland and its resources," said Minik Rosing, a Greenland-born geologist who is based at the University of Copenhagen and has served on several commissions in Greenland. "There has been a very intense debate on what the country's exploitation of these resources should be. ... I think there is a bit of anxiety in Greenland on how this will all end."

Prof. Rosing said Greenlanders understand that their future depends on developing resources, but they have yet to settle on how that should be done. One major issue has been uranium. Greenland is believed to hold some of the largest uranium deposits in the world, but for years the government banned mining the mineral. Those restrictions eased somewhat in 2010 but it is not clear whether Ms. Hammond will go further and permit uranium mining.

One of the new Siumut members tried to play down concerns about whether the new government will restrict development. "We wanted to consult the public about the terms and the conditions under which the large-scale projects should be formed," Vittus Qujaukitsoq said in an interview Wednesday. "It is just a question of focusing the conditions and terms of the working conditions."

Mining proponents win Greenland election

Arctic island elects first female prime minister

The Associated Press

13 March 2013 

Greenland is poised to get its first female prime minister after a centrist party that supports tapping the Arctic island's vast mineral wealth, including uranium, won national elections, a complete vote count showed Wednesday.

With all votes counted, Aleqa Hammond's centrist Siumut party won 42.8 per cent and 14 seats, while incumbent Premier Kuupik Kleist's left-leaning Inuit Ataqatigiit mustered 34.4 per cent.

The social democratic Siumut gained more than 16 percentage points since the last elections in 2009, while IA saw its support drop 9.3 points.

"I am very, very happy. I am thrilled as party leader," said Hammond, 47. "I am glad that Siumut is back."

Kleist conceded defeat in the battle for control of the 31-seat Parliament.

Hammond's party ruled for three decades and was ousted four years ago when Inuit Ataqatigiit grabbed the power for the first time since 1979, the year Greenland acquired semi-autonomous status from Denmark.

The party now needs to cobble together a coalition that will control at least 16 seats in Inatsisartut, or Parliament. She said she was open-minded about who might join her coalition.

Many Greenlanders want to use the island's mineral resources, including rare earth metals and uranium, as a way to reduce dependency on a subsidy from Denmark which now accounts for about two-thirds of the island's economy.

Developing a mining industry, however, would require inviting thousands of guest workers, a sensitive topic among the population of 57,000.

Kleist has headed efforts to attract international investment, but his Inuit Ataqatigiit party adheres to a zero-tolerance policy that forbids mining and selling of radioactive minerals, including uranium.

Hammond has said her party was ready to accept uranium mining if the ore contains a maximum 0.1 per cent uranium oxide.

So far, the zero-tolerance policy could affect only exploration in southern Greenland, where an Australian company has estimated it could extract up to 40,000 tons of rare earth metals per year, with some uranium as by-product.

Some potential foreign investors believe Greenland could contain the largest rare-earth metals deposit outside China, which currently accounts for more than 90 percent of global production.

Rare earth elements are key ingredients in smartphones, weapons systems and other modern technologies.

An equally contentious issue is immigrant labour, which Greenland, which has a population of 57,000, will need if it is to develop a viable mining industry. Hammond's Siumut party has accused the current government of moving too fast, accusing it of rushing through a law in December that allows large mining projects to import labor from places like China.

Outsiders, including the European Union, are concerned that China is eyeing investments in Greenland as a way to gain a toehold in the resource-rich Arctic region.

Voter turnout was 74.2 percent of the 40,500 eligible voters - an approximate three per cent increase from 2009.

In vote, resource-rich Greenland debates new global role

Alistair Scrutton


11 March 2013


Kuupik Kleist's earliest memories are hunting whales with hand-thrown harpoons. Now, as Greenland's prime minister, he is feted by Chinese and European leaders as he opens up its untapped mineral resources.

A verdict on this country's transformation comes on Tuesday, when this island - a quarter the size of the United States and with only 57,000 mostly Inuit inhabitants - holds a general election.

There is only one polling station in the capital Nuuk, which has just two traffic lights and where hunting is still the most popular pastime. But the vote may pack a global punch.

After four years of Kleist - a quiet-spoken musician known as Greenland's Leonard Cohen for his gravelly voice - the vote is effectively a referendum on how far it embraces international mining companies, energy giants, and foreign workers.

At stake may be Greenland's growing geopolitical role as global warming and the thawing of sea ice open up new sea lanes, minerals and oil fields - drawing the interest of world powers from China to the United States.

"There is a growing nationalist backlash. It's not a nice thing to see," Kleist said, sitting in his ninth floor office overlooking the snow-capped hills surrounding Nuuk Bay.

"The fear of being overrun by foreigners is exaggerated," the 54-year-old said. "We are becoming a global player. We need to avoid ethnicity, nationalistic feelings."

With Greenland having self-rule from Denmark aside from defense and security, the vote has seen a split between Kleist and an opposition linked to traditional Greenlanders like fishermen and hunters who feel he has gone too far in welcoming foreign companies.

There are calls for more taxes on foreign firms, growing suspicions about Chinese mining investments, demands for more environmental safeguards and even anti-colonial rhetoric to limit the use the Danish language being spoken.

"The main issue is that people feel that they are not part of the decision-making process of big scale projects and mining," opposition leader Aleqa Hammond said at her small campaign offices in Nuuk. "Where is the voice of the people?"

Hammond also grew up in a remote village. Her father died when she was young after he fell through ice while hunting. She says her family tried to make her marry a hunter. She refused. Instead, she has a good chance of being next prime minister.

Since Greenland won self-government in 2009, most politicians have aimed for growing autonomy and eventual independence. The more revenues from mining or oil, the more Greenland weans itself of Denmark's annual grant that accounts for more than half the island's budget.

In Kleist's gleaming new offices in Nuuk, many Danish civil servants sip cappuccinos, huddle over computer screens and plot policies from finance to mining regulations. Greenlanders mention the symbolism of an executive and its staff whose offices sit over Nuuk's one shopping mall.

The civil servants stand out in Nuuk, where sushi bars and cozy, heated cafes with sofas and internet contrast with barren, concrete housing estates of fishing industry workers.

Hope or Hype?

Not one mining or oil project has got off the ground yet.

But more than 100 exploration licenses have been awarded. There are large deposits of rare earths, used in products from wind turbines to hybrid-powered cars. China accounts for the majority of world supply. There are hopes for gold and zinc.

Government officials says reserves may be equivalent to as much half of the entire North Sea.

Central to the debate in Greenland is a $2.3 billion project for an iron ore mine by the British-based London Mining Plc near a fiord in Nuuk. It may involve diesel power plants, a road and port and would supply China with iron to fuel its economy.

Some 2,000 Chinese workers - the equivalent of around four percent of Greenland's population - could fly in for its construction, touching nerves where unemployment is rising.

"People feel that I am unemployed but the Chinese are coming in by mass," said Hammond.

Seal Hunting

At Nuuk's windswept port, fishermen drag in fish and seals from a catch. The floor on a small warehouse is awash with blood. There is a gagging stench of dead flesh.

Johannes Heilmann, 64, grew up hunting for whales. He still fishes with a 19-feet long boat encrusted in ice in the harbor, shooting occasional seal with a rifle to sell for meat in Nuuk.

Fishing accounts for 90 percent of Greenland's exports.

Heilmann is the Greenlander that is suspicious of mining. He campaigns against Kleist. He complains about fishing quotas, and how cheaper foreign produce is pushing out local food.

"No matter how much mining comes here, fisheries will be our main industry," Heilmann said. "Politicians should pay more attention to us."

Heilmann worries about London Mining. He fears any spill from the iron ore ships could destroy fishing.

"I don't mind if Chinese come here," he said. "But if there is an accident?"

Others are more nationalistic. One new party, Partii Inuit, has caused controversy by calling for more prominence for Greenlandic language over Danish, still widely used here.

Four hours north of Nuuk by boat lies Maniitsoq, one of many villages dotted on the western coast, relying on state subsidies for heating and communications. Unemployment is high.

U.S. giant Alcoa Inc has considered building an aluminium smelter there, strategically sited between European and North American markets. It could entail the import of thousands of workers, possibly from China.

Many here are desperate for Alcoa after much of fisheries has vanished. The town is huddled on an outcrop of windswept rocks with rusty housing blocks.

"The younger people, they all want Alcoa," said Jens Moller, head of a community training project in Maniitsoq, told Reuters by phone. "The older generation want better fishing. They are the ones likely to vote for the opposition."

In Nuuk, Karsten Peter Jensen is a 27-year-old post graduate student. He enjoys hunting in fiords for grouse or reindeer. But he also enjoys sushi bars and chic shops.

"The last four years have been very positive, we have looked to the outside world," Jensen said. "But for other people, they think change has come too fast. There is a perception Greenlanders have been put aside a bit."

Chinese Ghost?

Worries that China wants an Arctic foothold have risen in a territory that for years was a Cold War ally of the West.

It was little surprise when President Hu Jintao, China's outgoing leader, paid a three-day visit last year to Denmark, home to just six million people. Many assumed Greenland's riches were on his mind despite official denials.

Hammond says she would introduce royalties for mining companies and revise a law passed last year that effectively allowed big mining companies to employ thousands of foreign workers for construction of projects.

"For the greedy ones that want 100 percent of everything, Greenland is not for them," Hammond said.

That has some investors worried. Several mining executives, who asked to remain anonymous as they did not want to talk about politics, said investment decisions were on hold.

Few believe Greenland would turn against mining. The concern is more that politicians could hurt a fragile and emerging industry through demanding too many royalties and taxes.

"We are a small country that is in competition with the rest of the world," said Maliina Abelsen, finance minister. "When you build up expectations, you get people saying that we have so much in the ground, so we are fine."

"But we cannot eat that for breakfast. It is still in the ground."

An annual grant from Denmark has been effectively frozen at around 3.5 billion Danish crowns (about $610 million) and will shrink in real value over time.

Kleist pointed to his view over Nuuk. Icebergs floated by. He worried that if he lost power he would lose the view.

"There's always been a tendency to isolate Greenland from the rest of the world," Kleist said. "It's been my personal ambition to open us up. There is no alternative."

(Additional reporting by Katja Vahl; Editing by Angus MacSwan)

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