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Greenland Unable to Cash in on Resources

Could dominate global rare earth elements market

By Barbro Plogander
Epoch Times Staff
Created: December 26, 2012 Last Updated: December 30, 2012
Related articles: World » Europe
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Tourists on the Greenlandic icecap on Sept. 3, 2007. Although 80 percent of Greenland is covered in ice, beneath the ice lies abundant natural resources, such as rare earth elements. (Uriel Sinai/Getty Images)

Tourists on the Greenlandic icecap on Sept. 3, 2007. Although 80 percent of Greenland is covered in ice, beneath the ice lies abundant natural resources, such as rare earth elements. (Uriel Sinai/Getty Images)

Billions of dollars worth of rare earth elements—the largest deposit outside of China—cannot be mined in Greenland because the elements are bound up with restricted radioactive materials. Some lawmakers are calling for eased restrictions to allow exploitation of the valuable resource.

Australia-based company Greenland Minerals and Energy Ltd. has been sitting on a large deposit of rare earth elements (REE) in southern Greenland for years. The elements are abundant in the earth’s crust, but have earned the name “rare” because they are seldom found in deposits concentrated enough to be worth extracting.

China provided 95 percent of the world’s supply, but greatly restricted global access to its REEs in 2010. The United States used to be self-reliant, but became dependent on China as resources waned in the 1990s.

The elements are used in components for cellphones, computer monitors, television screens, fiber-optic cables, even lighter flints, among other abundant uses.

Jorgen T. Hammeken-Holm, department head at Greenland’s Bureau of Mineral and Petroleum explained the problem with extracting Greenland’s REEs: “The earth metals are bound up with uranium. You can’t mine the earth metals without extracting the uranium. With our current zero-tolerance policy [against uranium mining], it means that this deposit cannot be exploited.”

China provided 95 percent of the world’s supply, but greatly restricted global access to its rare earth elements in 2010.

Greenland lacks the necessary infrastructure and bureaucracy to handle radioactive materials, according to the Danish Institute for International Studies.

Greenland Minerals and Energy Ltd. argued that it should be able to extract the uranium, since the main purpose is to get the REEs, not the uranium.

The Greenlandic Parliament is divided on the issue. Legislation relating to the country’s mining industry will likely figure largely in 2013’s parliamentary elections. Lawmakers are also divided on labor laws relating to the mining industry.

Labor Shortage

As the mining industry expands, a labor shortage is poignantly felt in the arctic nation. The Greenlandic workforce totals a mere 36,000, and mining experience is rare. The country has opened its doors to migrant workers.

For example, a planned smelting plant in the small Greenlandic town of Maniitsoq will require 5,000 workers for its startup phase, the majority of whom will arrive from China.

As the mining industry expands, a labor shortage is poignantly felt in the arctic nation.

In December, the Greenlandic Parliament passed an act allowing large-scale extraction projects valued more than $900,000 to use imported labor and contractors during the development phase of the projects.

“When that phase is over, [the migrant workers] must leave the country, and the regular workforce, contractors, or service personnel must take over,” explained Hammeken-Holm.

The law has been controversial, not in the least because it allows international companies operating in Greenland to pay substantially lower wages to these establishment-phase workers. Transparency Greenland, a division of watchdog organization Transparency International, has thus criticized the act as infringing upon human rights.

“Depending on the outcome of the election, we may see some changes,” Hammeken-Holm said.

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