Greenland's Melting Glaciers Spur MiningPublished by MAC on 2007-07-17
Greenland's Melting Glaciers Spur Mining
17th July 2007
As previously noted, the idea of global warming as a boon rather than a burden has been proffered by those miners who are always searching for the next 'big find'. What the native Innuit make of this is not mentioned in the article below, but it is quite possible that the environmental threats of increased open-pit mining is another reason for them to seek common ground with those island peoples of warmer climes who are suffering the effects of rising sea levels.
Greenland's Melting Glaciers Spur Mining - Warmer Climate Boosts Accessibility For Firms Seeking Ore
By LISA YURIKO THOMAS, Dow Jones
17th July 2007
LONDON -- Soaring commodity prices and the effects of global warming are pushing mining companies to seek out new ore deposits in one of the world's most hostile environments: Greenland.
Greenland, a giant island in the north Atlantic governed by Denmark, is seeing a revival of mineral exploration as the glaciers that cover 80% of its territory recede. As the ice melts, mining companies can now explore in areas that were previously inaccessible, and also work in the area for longer each year than was previously possible, executives say.
"The climate is doing the hard mining for them," says Damian Brett, a minerals analyst at Stockholm-based Raw Materials Group. He notes that smaller mining companies are also being drawn to previously operating mines, where higher global prices and the retreat of the ice cap has opened up new opportunities.
For example, Angus & Ross PLC, a U.K.-based exploration and resource company, is planning to reopen an old zinc-and-lead mine on Greenland's west coast, about 400 kilometers north of the Arctic Circle.
The Black Angel mine was famous for the high quality of its zinc ore but was shut in 1990 because of low world prices and the difficulties of operating so far north, says Jerome Davis, a professor of oil and natural-gas policy at Canada's Dalhousie University. Mr. Davis was a consultant who worked on closing the mine 17 years ago.
With today's milder temperatures, however, miners and engineers can now work in the area for about eight months of the year, up from six months before the mine was closed, says Andrew Zemek, chief executive of Angus & Ross. At the same time, zinc prices more than quadrupled to a record high of $4,580 per ton in November 2006 from their levels in 2000. Yesterday, zinc was trading at about $3,530 a ton.
"The current high price of both zinc and lead make the exploration prospects...very interesting," says Daniel Bordessa, managing director of New York-based fund Cyrus Capital Partners LLP. His company is lending Angus & Ross $30 million for the Black Angel project. Angus & Ross hopes to begin full production of zinc concentrate and lead by 2009 and estimates output will total about four million metric tons.
Other companies are also sensing opportunities. Bjorn Thomassen, a senior geologist at the Geological Survey of Denmark and Greenland, says his office regularly sees visits from smaller mining companies that want to dig his archives for clues about where to explore. Greenland's Bureau of Minerals and Petroleum says the number of exploration licenses it has issued has more than tripled over the last five years, rising to 58 from 17 in 2002.
Morris Beattie, chief executive of International Molybdenum PLC, says warmer weather has aided his company's search for molybdenum -- a key element in high-strength steel -- on the east coast of Greenland. The company was recently acquired by Quadra Mining Ltd.
"Global warming has extended the working and exploring development season by a few weeks, as higher temperatures mean the frozen ice is leaving a couple of weeks earlier," he says. "With the rapid melting of the snow early in June, surface exploration is proceeding a month earlier than would have been possible one or two decades ago."
According to a recent study by the U.S. National Aeronautics and Space Administration, the area of permanent ice cover in the Arctic -- sea ice that survives the summer and remains year round -- is contracting at a rate of roughly 9% per decade.
Melting Arctic ice could also open a more direct passage for shipping from Greenland to metal-hungry Asian countries such as China, says Mr. Zemek, Angus & Ross's CEO, allowing "shorter routes for longer periods."
In the 17 years since the Black Angel mine closed down, a glacier that had been on its edge has retreated about 250 meters, allowing the company to drill and uncover roughly two million tons of high-grade zinc and lead ore accessible for the first time, Mr. Zemek says. He has a team continuing to explore the recently uncovered area. "The best place to look for a new mine is where the old one has been," he says.
Not everyone is benefiting. Teck Cominco Ltd., a Vancouver-based company whose Red Dog zinc operation within the Arctic Circle in Alaska is currently the world's largest producer of zinc concentrate, says it hasn't seen any major variation from its usual 100-day shipping period over the past few years.
Moreover, glaciers are constantly moving as part of their natural processes, geologists working in Greenland say, making it difficult to differentiate between man-made warming and natural cycles.
Still, few doubt that temperatures have increased in recent decades, which could place more unexplored ore deposits within reach.
Greenland-based gold-exploration company NunaMinerals AS is planning an expedition in August along the southeast coast of Greenland by ship, something that wasn't possible 10 to 15 years ago because of solid ice there, says Anders Lie, the company's senior geologist.
And London Mining PLC says its Isua iron-ore project in western Greenland has seen its deposit become more fully exposed along the western flank of the receding inland ice sheet.
Write to Lisa Yuriko Thomas at email@example.com